on the last working day of august, a piece of news came from the market that xiangdixian company held a general meeting and announced that it would suspend operations and lay off all employees. the executives would continue to raise funds and settle with employees when they had money. all the more than 400 employees had their contracts terminated. the market was shaken for a while.

in response to this news, xiangdixian officials said that the news of "all employees disbanding" was untrue. xiangdixian released a "clarification announcement on recent false rumors" through its official wechat public account, saying that the company has not taken any dissolution or liquidation measures at present, but is only optimizing its organizational structure and staffing to reduce costs and increase efficiency. the company is actively looking for financing opportunities.

source: xiangdixian official wechat public account

xiangdi first mainly develops general-purpose cpu/gpu and related special chip products with high performance, low power consumption and completely independent intellectual property rights for desktop, workstation, edge computing and other fields. currently, it has launched two gpus, "tianjun no. 1" and "tianjun no. 2". after multiple rounds of financing, the company's valuation once reached 15 billion yuan.

such a unicorn company started to lay off employees, which triggered numerous speculations. in fact, as early as april this year, it was rumored that xiangdixian laid off all fresh graduates, and then in may, it was reported that all employees had their salaries cut. on the day before the company was announced to be dissolved on august 30, an insider broke the news in advance on a workplace social platform that "all employees of xiangdixian have graduated."

in fact, this is not the first domestic gpu company facing bankruptcy crisis. lisuan technology, a domestic gpu manufacturer that was once exposed to have burned through 300 million yuan in financing and was on the verge of bankruptcy, has just recently resolved its bankruptcy crisis.

01

the origin and development of domestic gpu

due to historical reasons, my country has long been in the position of imitation and introduction in the field of information technology. international giants have occupied a large market share and monopolized the domestic information infrastructure. they have formulated domestic it underlying technology standards and controlled the entire information industry ecosystem.

in 2006, the state council promulgated the "outline of the national medium- and long-term science and technology development plan (2006-2020)", in which "core electronic devices, high-end general-purpose chips and basic software products" (referred to as "core high-end basic major projects") ranked first among the 16 major science and technology projects, also known as the "01 project", and domestically produced gpus were among them.

however, the development of domestic gpus lagged behind that of domestic cpus. it was not until april 2014 that jingjiawei successfully developed the first domestic high-performance, low-power gpu chip, the jm5400. in the development of domestic gpus, the dependence of gpus on cpus and the high difficulty of gpu research and development have hindered the rapid development of the industry.

first, gpu is dependent on cpu. gpu structure has no controller and must be controlled by cpu to work, otherwise gpu cannot work alone. therefore, it is in line with the logic of chip industry development that domestic cpu is one step ahead of domestic gpu.

furthermore, gpu technology is very difficult. moor insights & strategy chief analyst moor haider once said: "compared to cpu, gpu development is more difficult, and there are fewer gpu designers, engineers and driver authors." the domestic talent gap is also one of the important reasons for the slow development of domestic gpus. in the chip industry, generally speaking, it takes at least 10 years to train a mature engineer with rich experience and the ability to modify chip design plans in a timely manner according to market dynamics.

although jingjiawei has developed domestic gpus, it has never made a splash in the civilian market. it has only been deeply involved in the military market. domestic gpus have always been far behind international ones. until 2017, a chinese private equity firm called "kaiqiao" acquired imagination. imagination, a company that has been providing graphics processors for apple phones, and most of its revenue also comes from apple, but apple has always wanted to get rid of it, developed its own gpu architecture, and privately poached many engineers, but later directly refused to use them, causing imagination's stock price to plummet by 70% overnight.

kaiqiao capital's acquisition of imagination at a cost of 550 million pounds is a very cost-effective business acquisition. even without considering it from a business perspective, this acquisition has enabled china to obtain very scarce gpu technology, ending the situation where chinese companies do not have gpus, and has far-reaching strategic significance.

for china, it is too costly to redevelop its own gpu architecture. imagination's gpu architecture is still very powerful. apple even poached a lot of people from imagination to develop its own gpu, and it has been preparing for this for many years. china is now almost starting from scratch in terms of core gpu r&d talents. under such circumstances, it is very appropriate to acquire imagination's gpu architecture. after imagination was acquired by chinese capital, in order to survive, it did one thing, which was to modify the original powervr architecture to make it more suitable for desktops and pcs. one of the reasons is that the chinese market has a strong demand for graphics cards.

after that, a large number of domestic gpu companies were established after 2017, and they basically adopted the relevant architecture, which was one of the reasons for the subsequent explosion of domestic gpu companies. but because of this, domestic gpus have achieved a huge leap.

02

the domestic gpu landscape has changed

although the domestic gpu industry started late, thanks to the support of capital and the market catalysis of domestic substitution in recent years, a large number of companies have entered this field. with the continuous emergence of demand for graphics processing and accelerated computing in the domestic information industry, the domestic gpu market has shown a "hundred flowers blooming" trend, among which there are many outstanding companies and products.

• moore thread:moore threads was established in june 2020, and it took 18 months to launch a series of new products including the new unified system architecture musa and the all-round gpu product "sudi". its founder and ceo zhang jianzhong previously served as nvidia's global vice president and general manager of china. he has been deeply involved in the gpu industry for more than 15 years and led nvidia to develop and establish a complete gpu ecosystem in china.

• jing jiawei:jingjiawei is the first gpu company established in china. its products are mainly divided into graphics and image processing systems, small radar systems, and gpu chips, which are widely used in the military industry. the company's graphics display and control products include graphics display modules and reinforcement products, among which graphics display modules are the core products.

• when jingjiawei was founded, the graphics display and control systems of my country's military aircraft were upgrading from using dsp and fpga graphics accelerators to using gpu graphics processors. the company accurately grasped the opportunity and invested a lot of resources in the research of aircraft graphics display and control. for this reason, jingjiawei started out by making military products.

• xindong technology:after the large-scale adjustment of the powervr architecture, wuhan xindong technology was the first to use the architecture ip and launched the "fenghua" series of graphics cards around 2021. the launch of fenghua no. 1 filled the two major gaps in domestic 4k-class desktop graphics cards and server-level graphics cards, supporting domestic new infrastructure 5g data centers, trusted desktops, metaverse, cloud games, cloud desktops, graphics workstations, etc.

• granfith:originated from shanghai zhaoxin's gpu team, it is inherited from the original s3 graphics r&d team in shanghai, china. the team is the earliest established and most complete graphics processor design and r&d team in china, with a history of desktop discrete graphics. the latest arise 1 series discrete graphics supports dx11 and is shipped in small quantities on the xinchuang host. the main products released by the gpu team include: discrete graphics chip, x86-soc and arm-soc display chip, covering the discrete graphics, embedded and mobile markets to meet the diverse needs of customers.

• emperor xiang first:xiangdixian entered the gpu field in 2020 and received support from chongqing. it is a key chip technology company introduced and incubated by chongqing. in september 2022, it successfully launched the "tianjun no. 1", claiming that its performance reached the level of nvidia gtx1660. coupled with the chip investment boom at the time, xiangdixian's valuation also rose. according to people familiar with the matter, although xiangdixian had no revenue in 2022, its valuation was as high as 15 billion yuan.

• lisuan technology:lisuan technology is a chip design company dedicated to the research and development of multi-level (scalable) graphics rendering, which can meet the needs of chips and computing power in various scenarios such as digital content creation and design, game animation and film and television production, ar/vr, digital twin cities and factories, cloud desktops, smart cockpits, artificial intelligence and large model applications. lisuan technology insists on self-developed architecture, and its products can realize mainstream graphics rendering and ai acceleration on the end, cloud and edge, benchmarking the mainstream gpu architecture, and seamlessly compatible with the external ecosystem, striving to solve the key problem of independent control of the domestic mainstream complete gpu architecture.

however, the seemingly prosperous domestic gpu market is fraught with crisis. on august 30, xiangdixian computing technology (chongqing) co., ltd., a gpu company that raised 2.5 billion yuan and was once valued at 15 billion yuan, held a full-staff meeting and announced the company's official dissolution and the termination of all employees' labor contracts.

previously, it was revealed that the domestic gpu manufacturer lisuan technology, which had burned through 300 million yuan in financing and was on the verge of bankruptcy, has just been relieved of its bankruptcy crisis. at present, lisuan technology has not yet received financing and has owed employees 6 months of wages.

03

has the wild growth period of domestic gpus passed?

since 2019, a large number of domestic gpu start-ups have emerged, and a number of established chip design companies have also entered the gpu field.

according to incomplete statistics, as of now, there are about thirty or forty companies engaged in gpu design in china.

in october 2023, the united states included moore threads and biren technology, two leading domestic gpu startups, on the "entity list". for a time, the domestic investment boom in the gpu field quickly cooled down. coupled with the semiconductor market entering a "downward cycle" in 2023, the decline of the a-share market and the tightening of ipo review, the investment and financing of the entire semiconductor market also dropped to a freezing point.

previously, the valuations of many semiconductor startups that were favored by capital have been falling again and again. especially for those semiconductor startups that do not have sufficient self-generating capabilities and survive only by burning financing, it is even more difficult to continue. these gpu companies are forcing differentiated technology without ecological preparation; they make chips for ipo without the awareness of survival. without a supply chain path, sanctions mean death. they are also facing internal friction from top to bottom.

there is no doubt that the "wild growth" period of domestic semiconductor startups has passed, and the next step will inevitably accelerate the "reshuffle". the top companies that have emerged will gather more resources, the valuable ones in the middle will be integrated/merged, and the rest may face bankruptcy. after all, for the top companies, it is more cost-effective to wait for some small and medium-sized competitors to go bankrupt and directly "recruit" them.

domestic gpu manufacturers have now entered the elimination round, and a large number of companies that are unable to generate their own blood may not be able to escape the fate of lack of money.

04

how far are domestic gpus from replacing nvidia?

there is a significant gap between domestic gpus and nvidia in terms of technology, performance, and ecosystem construction, but domestic gpus have made breakthroughs in some areas. for example, moore threads announced a new breakthrough in gpu performance, which is comparable to international standards.

at present, the main gpu products in china are based on the information and innovation market or the ai ​​market, and there are few products targeting the civilian market. however, moore threads officially launched its first gaming graphics card, the mtt s80, in november 2022. it is understood that this is a graphics card with a "theoretical performance of 3060".

last year, moore's threads exposed the s90 graphics card. after the polishing of the first generation of products, moore's threads has accumulated certain experience in product design and ecological construction, and the compatibility and performance of gaming graphics cards have been continuously improved. it now supports dx11 and opengl 3.3, and will support dx12 in the future.

although it is still far from the most advanced international gpus and lacks driver compatibility, it is one of the few products in china that is aimed at the consumer market. overall, domestic gpus still have a long way to go before they can replace nvidia, but there is hope.