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One-fifth of the world

Text｜"Chinese Entrepreneurs" reporter Tao Tao

Editor: Li Wei

Image source: Interviewee

"Children always have to leave home when they grow up. Just like when you are used to being a sailor on a ship, you will definitely have the urge to build a ship yourself," said Gao Feng.

Gao Feng is the co-founder and CEO of Shenzhen Ouye Semiconductor Co., Ltd. (hereinafter referred to as "Ouye"). Before the establishment of Ouye, Gao Feng worked at Huawei for 17 years. He was stuck in the bottleneck of "mid-life crisis" and wanted to explore a wider world.

"We have been looking for opportunities," Gao Feng recalled.The automotive intelligent chip track is heading towards the singularity.Such changes came into the view of several core members.

According to Market.Us data, the global chip market size will be approximately US$500 billion in 2023, and this figure will increase to nearly US$1 trillion in 2032.The global automotive electronic chip market is expected to exceed US$110 billion (RMB 798.7 billion), accounting for 15% of the entire chip market.

"When starting a business, the track you choose should have a trend of explosive growth in the next 10 to 20 years, so that a relatively successful company can be born," said Gao Feng.

The breakthrough in neural network technology in 2012 gave rise to the AI ​​1.0 era, and star companies such as the AI ​​Four Little Dragons were born, but these companies encountered difficulties in the commercialization of AI.

There is still a huge gap between a company’s successful R&D and bringing social value. “Automobile intelligence has entered a transformation era, and overseas chips have lost their stock advantage in the field of intelligent chips, so Chinese companies have huge opportunities,” Gao Feng said.Discovering the window of opportunity to bridge the gap allowed Ouye to anchor the automotive chip track.

At present, Ouyeel has completed the A4 round of financing, and the participating investors include three types of institutions: industrial investors include Xingyu Shares, Joyson Electronics, SAIC Venture Capital, ArcSoft, Baolong Technology, AAC Technologies, etc.; large state-owned institutions include China Merchants Investment, China Merchants Zhiyuan Capital, Kunpeng Capital, Sugao New Venture Capital, Nanshan Zhanxin Investment, etc.; financial investors include Zhongke Chuangxing, Linxin Investment, Guangyuan Capital and other first-line market-oriented institutions. In addition to funds, shareholders also provide support for the ecological construction of the entire industrial chain of Ouyeel.

Gao Feng has his own predictions about the market structure of the automotive chip track in the next 10 to 15 years: "There will be many brands of consumer-grade products, but due to the technical barriers of the underlying chips, a highly concentrated market will eventually be formed.There are probably 4 to 5 in the world and 1 to 2 in China.”

Gao Feng has deep feelings for his "Huangpu Military Academy" Huawei. In 10 to 15 years, Ouye wants to fight for one of the five parts of the world, just like Huawei's Kirin chips in the mobile Internet era.

Build your own boat

Establishing Ouyeel was Gao Feng’s first entrepreneurial venture. Before starting his own business, he worked at Huawei for many years, involved in investment management, strategic transformation, corporate governance system construction, financial management, etc. The founding team of Ouyeel also basically came from Huawei.

During the 17 years he worked at Huawei, Gao Feng felt like he was attending a university.I have been deeply involved in some key strategic adjustments and changes at Huawei, which has deepened my understanding of the industry and helped me understand how to better adapt the company's strategy, organization, and business.

But after being taught and answered questions for a long time, Gao Feng felt that it was time for him to "graduate".

Peter Drucker, the father of modern management, has witnessed many changes in companies, but he still feels regretful because he has not been able to become the helmsman of the company and personally control the direction. Gao Feng does not want to regret this for the rest of his life, so he plans to "build the ship" himself and get involved.

Unlike some conservative entrepreneurs who fear the unknown, Gao Feng likes the uncertainty of the social system itself. He has a special liking for the story of "The Battle of Antarctica" in "When the Stars Shine": Explorer Robert Scott traveled across the ocean to explore the South Pole, but after going through hardships and hardships, he found that he was the second place when he arrived.

"When you set out, you don't know whether you will succeed or fail. I find this spirit of exploring the unknown particularly attractive," Gao Feng said.

At the age of 40, Gao Feng felt that if he continued to stay in a large company, the unknown would become smaller and smaller. "If I stay where I am, I can only slowly reconcile with the passion in my heart." Therefore,Being adventurous at heart, he plans to find an opportunity to step out of his comfort zone.

In addition to the personal circumstances of the founding team, the birth of Ouyeel was also due to the timely industrial environment.

Starting from 2020, under the requirements of the "dual carbon" goal, the production capacity of domestic electric vehicles has been further improved. In 2021, the production and sales of new energy vehicles will reach 3.545 million and 3.521 million respectively, both up 1.6 times year-on-year, and the market share will reach 13.4%, up 8% year-on-year.

At the same time, in terms of intelligent application innovation, China has a huge market, manufacturers have a strong desire for innovation, and consumers are highly receptive to innovation.Gao Feng predicts that the second half of the transformation of automobile electrification will be the intelligentization of automobiles.This will bring broad prospects for the implementation of AI computing.

Gao Feng compared the AI ​​car market since 2020 to the development period of the communications market from 2000 to 2015: "It is similar to the gradual development from wired telephones to mobile communications, and the gradual iteration of technology from 2G, 3G, and 4G.The consumer market will grow exponentially during the innovation period. Automotive intelligence is currently in this period.”

Therefore, Ouye chose to enter the automotive chip market.

Hit the moving target

After anchoring a track, the most difficult thing is to predict the specific situation.

Unlike some basic manufacturing industries where the product production cycle takes several months, semiconductor chips need to go through a long cycle of 2 to 3 years from project initiation to mass production.

“When deciding what kind of chip to make, we need to think about the development trend of the industry in the next few years.It's like hitting a moving target years later.Gao Feng said metaphorically.

Ouyeel's approach is to rely on the 20 years of industry experience of the main creative team and take the vision of "making car manufacturing simpler and car use more pleasant" to understand the industry. At present, Ouyeel mainly focuses on the third-generation automotive E/E architecture system-level SoC chips and solutions based on this vision.

SoC chips are system-on-chips, which means all contents including complete systems and embedded software. Specifically for Ouye, its Longquan series chips cover the needs of smart car terminal intelligent components (such as smart lights, electronic exterior mirrors, etc.), intelligent regional processors and central computing units for driving and parking.

Gao Feng compared it to others, and said that making SoC is a bit like building a house, which is a 1+3 framework.——1 is product definition, which is a bit like market positioning, what price range and functions the target group needs for a house; 3 is the three technical capabilities that support product definition, namely key algorithms, chip architecture, and software and solutions.

"The key algorithm is the component of the chip. We need to make each module such as the living room, bedroom, and bathroom very competitive. The chip architecture combines these modules to form a reasonable apartment type, such as reasonable traffic lines and proportions of doors and windows. Software and solutions are similar to decoration. Chips must be matched with software to generate user value." Gao Feng emphasized.

He further explained that the layered solution is equivalent to the real estate developer being able to deliver both unfinished houses and hard and soft furnishings in layers, and also providing reference design plans while delivering unfinished houses.

“This can meet the needs of different suppliers.They no longer need to look for a 'decoration company',"It makes car manufacturing easier. This is the successful experience we have accumulated over the past 10 years, just like CUDA to NVIDIA. This is why we developed the Qixing software platform based on the Longquan platform more than two years ago." Gao Feng said.

In order to further meet the needs of tier 1 (first-tier suppliers), Ouyeel has also changed the clear-cut cooperation mode between traditional automotive suppliers.Conducting research and development together with downstream manufacturers before delivery reduces the trial and error costs during the testing period.

In addition, when building the SoC architecture, Ouyeel also follows three "dos and don'ts":

First, in terms of technology selection, we focus on intelligence as the main line, AI computing and communication as the concentric circle expansion, focus on products that enhance user experience, and avoid homogeneous chips that only compete on cost;

Second, in terms of market selection, since domestic models below RMB 300,000 account for 90% of shipments, Ouyeel does not blindly pursue high computing power and covers a large number of models;

Third, the definition of the SoC series chips must conform to the trend of automotive intelligence evolution in the next 10 to 20 years and be aimed at a long-term and growing market.

The ultimate driving force of Ouyeel's products and solutions comes from end customers.

Gao Feng predicts that in the field of assisted driving and autonomous driving, the mainstream commercialization in the next 3 to 5 years will still focus on L2~L2+, rather than L3 and L4. According to the degree of intelligence, autonomous driving is divided into five levels, and the degree of autonomous driving increases with the number: L1 refers to assisted driving, L5 refers to fully autonomous driving. L2 means semi-autonomous driving, and the main driving responsibility is still on the person.

"Japan is the first country to start research and development of assisted driving. As Japan's aging population continues, the increase in the average age of drivers is a natural trend. The fundamental purpose of Japan's investment in autonomous driving is not to replace people, but to reduce the requirements for drivers and make driving safer," said Gao Feng.

In his opinion, with the deep integration of ICT technology and the automotive industry, there is a broad space for automotive intelligence. Ouyeel's current products and solutions include all-weather clear and bright CMS (electronic exterior rearview mirror), magic carpet chassis based on visual technology, and cabin-mooring integrated solutions.

Fight for one fifth of the world

There is a calligraphy on the wall of Gao Feng's office: "Don't be anxious".When Ouye was established, he moved it from his home.

Before starting his own business, Gao Feng was impatient, so he wanted to use these three words to encourage himself. After starting his own business, he experienced more ups and downs, and he thought his temper was milder than before: "I am no longer easily anxious."

But for a startup that has grown up in a severe external environment, the company has always faced challenges: investment and financing, customer development, employee management...

"Every day is like playing whack-a-mole. You never know where an unexpected event will pop up. Sometimes it's a surprise, but most of the time it's a shock," he joked.

Challenges also come from the commercialization of products.

At present, Ouyeel's SoC products and solutions are still in the Design in stage (Note: Design in means obtaining a new product development plan and a ticket to product development, and Design win means winning customer orders). More than 20 Design in customers have signed technical cooperation agreements, and 8 of them have been converted into vehicle model designated projects. After the A, B, and C samples are tested, SOP (start of production) can be carried out later.

This year is the first year for Ouyeel to expand its market.At present, the funds provided by investors are sufficient to support Ouyeel's R&D and daily operations. Therefore, Gao Feng's expectations for commercialization in the next two years are relatively relaxed: "Our goal is to achieve project-level profitability in 2026 and company-level profitability in 2027." The biggest challenge is undoubtedly to formulate long-term strategies and establish hierarchical goals.

Based on the basic understanding of high-tech, Gao Feng believes that there will still be many brands of automotive consumer products in the future, but in the field of underlying chips, the industry concentration will gradually increase with the development of the industry, and will eventually settle at 3 to 5 companies in the world. "For example, Intel and AMD in the PC era, Apple, Qualcomm, Samsung, HiSilicon and MediaTek in the mobile Internet era."

"If we want this industry to survive, we must become that one-fifth," Gao Feng said.

In order to realize this grand plan, Ouye has divided this long-term strategy into three steps over nine years, from point breakthroughs to local outbreaks to global victory, occupying a favorable competitive landscape in the industry in nine years; conforming to the iterative cycle of the automotive intelligent industry, achieving the goal of being among the top five in global market share in 10 to 15 years.

According to Gao Feng, Ouyeel has formulatedThe strategy of "fighting to support the war and laying eggs along the way": The revenue from products produced in the short and medium term is reinvested in research and development, all of which are used to support the strategy of "one-fifth of the world".