VeriSilicon announced on December 23, 2023, that it plans to raise no more than 1,808 million yuan in capital, mainly for: 1) Chiplet Solution Platform R&D projects in the AIGC and smart mobility fields; 2) next-generation IP R&D and industrialization projects for AIGC, graphics processing and other scenarios.
Key points of investment
Plan to raise additional capital for Chiplet R&D projects and next-generation IP projects to create the second pole of profit growth
The company's Chiplet R&D project revolves around the AIGC Chiplet Solution Platform and the Smart Mobility Chiplet Solution Platform. The main R&D results are applied to SoCs in the field of AIGC and autonomous driving, and a complete set of software platforms and solutions for related fields have been developed. By developing Chiplet technology, the company can not only continue to engage in the semiconductor IP licensing business, but also upgrade to a Chiplet supplier to improve the company's IP reuse, enhance inter-business collaboration and increase the added value of design services, and effectively reduce the design costs and risks of chip customers. In the future, it is expected to further expand the company's market coverage in new segments such as artificial intelligence and autonomous driving, and drive the company's profit growth.
The company's next-generation IP project develops high-performance graphics processor (GPU) IP, AI IP, and image signal processor AI-ISP for AIGC and data center applications. In line with the rapid rise of AIGC applications, it will be widely used in downstream fields such as artificial intelligence, intelligent driving, and image processing. At the same time, it is committed to building a complete application software ecosystem, further enhancing product competitiveness in market applications, enriching the technology matrix, and creating new profit growth points.
The successful implementation of the core technology accumulation guarantee project is expected to enhance China's chip self-sufficiency
The company has accumulated core technologies such as chip customization technology and semiconductor IP technology, and has formed a series of advanced platform-based solutions and IP subsystems/platforms for specific application fields. In terms of one-stop chip customization services, the company has design capabilities from advanced 5nm FinFET and 22nm FD-SOI to traditional 250nm CMOS processes, and has successful streaming experience with 14nm/10nm/7nm/5nm FinFET and 28nm/22nm FDSOI process node chips. In terms of semiconductor IP technology, the company already has six types of processor IPs: GPU IP, NPU IP, VPU IP, DSP IP, ISP IP, and display processor IP for integrated circuit design, as well as more than 1,500 digital-analog hybrid IPs and RF IPs. Various types of IP have been widely used in artificial intelligence, automotive electronics, cloud services, etc. The company has deep core technology accumulation, rich R&D experience and solid R&D strength to provide a solid technical guarantee for the smooth implementation of the project
The current development of China's semiconductor industry in the fields of advanced computing, supercomputing, semiconductor equipment, etc. is limited by overseas supply, making it difficult to meet the downstream market's demand for chip design, manufacturing, and process technology. According to IBS data, China's semiconductor self-sufficiency rate in 2022 was 25.6%. Chiplet technology is currently in its infancy. The company's development of Chiplet technology through this project will help solve the “stuck neck” problem in China's semiconductor industry, narrow the gap between Chinese chip companies and leading overseas manufacturers in developing high-performance chip products, and strengthen China's chip self-sufficiency rate.
Profit forecasting
Based on prudential considerations, without considering the impact of additional issuance on the company's performance and share capital, it is predicted that the company's revenue for 2023-2025 will be 25.64, 32.31 billion yuan, and 3,966 billion yuan, respectively, and EPS will be -0.09, 0.06, and 0.16 yuan respectively. We are optimistic about the company's business layout, covered for the first time, and give it an “increase in holdings” rating.
Risk warning
Risk of iterative technology upgrade, risk of R&D failure, risk of technology licensing, risk of trade friction, risk of growth falling short of expectations, etc.