On April 15th, according to information disclosed by the National Enterprise Bankruptcy Reorganization Case Information Network, the Beijing First Intermediate People's Court issued (2024) Jing 01 Bankruptcy Application No. 97 Civil Ruling, ruling to accept the application for bankruptcy liquidation of Huaxia Chip (Beijing) General Processor Technology Co., Ltd. ("Huaxia Chip") by Xi'an Jiubufang Enterprise Management Partnership (Limited Partnership).
Through a random draw by the Beijing Higher People's Court, Zhongwen Law Firm in Beijing was appointed as the administrator for Huaxia Chip.
According to available information, Huaxia Semiconductor was established on December 22, 2014, with a registered capital of 180.125 million CNY. It is touted as an innovative provider of heterogeneous processor IP and chip solutions, with its headquarters in Beijing and research and sales centers in Shanghai and other locations.
Huaxia Semiconductor claims to possess CPU, DSP, GPU, and AI processor IP with fully independent intellectual property rights. It offers customized chip products across various series targeting IoT, edge computing, and cloud computing applications, boasting high performance and energy efficiency.
Their AI chip solutions cover applications such as assisted driving, smart security, smart homes, robotics, smart cities, industrial IoT, and smart manufacturing. Huaxia Semiconductor has also won awards like the 2020 China IC Design Achievement Award for Top Five Innovative IC Design Companies and the 2020 Hardcore China Chip Most Promising IC Design Enterprise Award.
According to data from Qichacha, Huaxia Semiconductor has multiple instances of enforcement actions, with a total amount exceeding 54.0763 million CNY.
Furthermore, several shareholders of Huaxia Semiconductor, including Unisoc (holding 30.5344%), Gezhi Industrial Development (Shenzhen) Co., Ltd. (21.3740%), Li Keyi (16.8314%), Gezhi No.1 Investment Consulting (Shenzhen) Partnership Enterprise (Limited Partnership) (10.6260%), Luo Chengyuan (4.99659%), Wuxi An'erfeng Enterprise Management Partnership Enterprise (Limited Partnership) (2.1442%), and Zhenjiang Caiyi Enterprise Management Consulting Center (Limited Partnership) (0.1000%), have been listed as dishonest executors or subject to restrictions on high consumption and equity freezing.
National Technology was once the largest shareholder of Huaxia Chip.
It's worth noting that in June 2018, National Technology, valuing Huaxia Chip at 500 million CNY pre-investment, increased its stake in Huaxia Chip by 140 million CNY through National Investment, holding 21.37% of the shares, using 130 million CNY of over-raised funds and 8 million CNY of self-owned funds.
However, since the main valuation of Huaxia Chip relies on its subsidiary, Optimum Semiconductor Technologies (OST), several media outlets subsequently questioned OST's ownership and R&D capabilities.
According to the asset appraisal report issued by Zhongjing Minxin (Beijing) Asset Appraisal Co., Ltd. on March 13, 2018, as of December 31, 2017 (the appraisal date), the assessed value of all equity of Huaxia Chip (including OST) was 647.918 million CNY; the net asset book value of Huaxia Chip (excluding OST) was -11.9873 million CNY.
At that time, National Technology stated that the move was to optimize the business layout of the listed company, quickly gain competitiveness in the field of secure artificial intelligence new technologies and products, and enhance profit growth.
Subsequently, in 2020, National Technology demanded a performance compensation of 69.6474 million CNY from Li Keyi, the actual controller of Huaxia Chip, for the unfulfilled performance commitments of Huaxia Chip in 2019, and also repurchased Huaxia Chip's shares held by National Technology for 169.2137 million CNY.
In January 2021, National Technology announced that the performance compensation for the year 2019 and the agreed share transfer payment had been settled by the counterparty, and the company would cooperate to handle the corresponding share change registration procedures according to the agreement.
By then, National Technology had realized an investment income of 100 million CNY through Huaxia Chip.
The competition in the chip design industry is accelerating
Since the "ZTE Incident" erupted in 2018 and the Sino-US trade war broke out in 2019, driven by the demand for independent and controllable technologies and various incentives and subsidies from the government for semiconductors, a wave of self-developed chip frenzy has swept through China, with various chip design startups emerging like mushrooms, and even many companies crossing into the field of chip design.
According to statistics released by Professor Wei Shaojun, chairman of the China Semiconductor Industry Association's Integrated Circuit Design Branch, at the "ICCAD 2023" conference, as of November 2023, the number of integrated circuit design companies in China reached 3,451, an increase of 208 from 3,243 in 2022.
By contrast, in 2019, there were only 1,780 chip design companies in China, an increase of only 82 from 1,698 in 2018. From the end of 2019 to the end of 2023, in just four years, the number of chip design companies in China doubled, indicating rapid growth.
However, the report shows that among the 3,451 chip design companies currently retained in China, 1,910 companies have sales revenue of less than 10 million CNY, accounting for as high as 55.35%!
It can be said that although the overall number of chip design companies is large, most of them are not strong, and there is a phenomenon of low-level redundant design and "internal competition."
Especially since the second half of 2022, as the semiconductor market entered a downward cycle, coupled with the continued tightening of restrictions by the United States and the decline of investment enthusiasm for the chip design industry in China, the "survival of the fittest" in the chip design industry has begun to accelerate.
Data shows that in 2023, 10,900 chip-related companies in China were deregistered or revoked, an increase of 69.8% compared to 5,746 in 2022; while during the same period, 65,700 chip-related companies were newly registered, an increase of only 9.5% year-on-year.
In 2023, several chip design companies that received attention closed down.
For example, in June 2023, OPPO closed its chip design subsidiary, Zhike Technology;
In August 2023, Meizu was reported to have disbanded its AR chip development team;
In August 2023, according to the public information of the National Enterprise Bankruptcy and Reorganization Case Information Network, storage IDM manufacturer Jiangsu Times Memory Semiconductor Co., Ltd. officially entered the bankruptcy liquidation process;
In November 2023, "Moxing Semiconductor," a chip design subsidiary of TCL Technology Group, was reported to have been "dissolved."
