Recently, a significant announcement from Chiplink Integrated (Stock Code: 688469.SH) has set the stage for its performance outlook in 2024, sharing insights that could reshape the semiconductor landscape in the coming yearsIn its annual earnings forecast, Chiplink revealed expected revenue of approximately 6.509 billion yuan, reflecting a year-on-year increase of about 22.26%. This robust growth illustrates not only resilience in challenging market conditions but also a strategic shift towards emerging technologies.

Moreover, the company demonstrated a noteworthy adjustment in its financial health, with its net profit improving remarkably, predicting a loss of about 969 million yuanThis marks a reduction in losses by around 9.89 billion yuan compared to the previous year, improving the overall loss margin by an impressive 50.5%. The company also reported an EBITDA of roughly 2.119 billion yuan, indicating a staggering year-on-year growth of about 129.08%. In an impressive breakthrough, Chiplink achieved a positive annual gross margin for the first time, reaching approximately 1.1%.

At the recent online conference held on February 17, focusing on the operational outlook for 2025, the company’s Chairman and General Manager, Zhao Qi, provided insights into the prospective capital expenditure plansHe indicated that a decrease in depreciation pressure may emerge in tandem with a slight increase in capital allocationFollowing the successful transition to positive gross margins in 2024, Chiplink anticipates that the momentum driven by AI-grade products will propel the company into a new phase of rapid growth, signaling an approaching profit turning point.

Central to Chiplink’s strategy is a comprehensive engagement with the semiconductor sector, focusing on automotive applications, AI integration, consumer technologies, and industrial controlsThese domains are critical as the company aims to harness the potential of new energy and artificial intelligence

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The semiconductor industry is increasingly intertwined with AI, and at the conference, it was evident that conversations around AI technology framed much of the anticipation for future growth.

Zhao Qi emphasized the transformative role AI is expected to play within the semiconductor industry, projecting that global semiconductor market size could surpass one trillion dollars by 2030, with AI and electric vehicle technologies serving as the vital growth enginesHe also noted that as the cost of AI computational power declines, there should be a subsequent explosion in application demands, shifting semiconductor requirements from traditional computing and storage sectors towards sensors and power devicesAI applications are rapidly proliferating across diverse sectors, including servers, automobiles, consumer electronics, and robotics.

Chiplink has been proactive in positioning itself within the AI sector, having made considerable strides over the past two years, particularly in power chips, analog chips, and microcontroller units (MCUs). Its contributions significantly bolster the growing demand for innovative power solutions, particularly in the realm of AI serversThe company showcases a comprehensive layout of power chip solutions, spanning initial through tertiary power needs within AI server applications.

Currently, Chiplink’s efforts are focused on two key lines within the AI segment: high-frequency power chips predominantly composed of Gallium Nitride (GaN) and Silicon Carbide (SiC), along with fused analog power IC chips, marked by its DrMOS technologyThe former aims for extensive mass production across an entire series of chips, while the latter has already achieved significant breakthroughs in individual applications.

Furthermore, Zhao highlighted the rapid progress of DeepSeek, a development anticipated to accelerate the industrialization of AI within ChinaBy providing domestically sourced AI server power solutions, Chiplink is poised to cover over 50% of the total value associated with AI server power needs.

On a parallel front, Chiplink’s focus on automotive chip technology stands as another essential sector for the company's growth

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In 2024, the revenue derived from automotive applications is projected to grow significantly, with an expected annual increase of roughly 41%. In the automotive landscape, Chiplink is offering approximately 70% of the platform supply across over 1000 types of chips utilized in seven core vehicle domainsWith domestic production levels having reached about 35% among power semiconductors, there lies a vast opportunity for growth in other areas that currently exhibit lower localization ratiosChiplink is well-positioned to provide various components including control chips, analog ICs, sensors, communication chips, and security chips.

Zhao elaborated on the increasing demand for high precision analog chips, particularly in smart driving systems, where sensor fusion becomes criticalThe proliferation of laser radar in autonomous driving systems underscores the company’s commitment to developing vital driver chips based on technologies like VCSEL and MEMS mirrors, maintaining significant attention within specialized markets.

Power chips also experience heightened expectations given the energy consumption management requirements of smart driving systemsThis can lead to a stark increase in chip usage while raising demands for technical integrationArmed with a strategic advantage in power chip technologies, Chiplink is anticipating a substantial enhancement of its market share.

Additonally, there’s an evident shift toward centralized electronic and electrical architectures within smart driving systems, creating new demands for MCUsA strong trend exists towards the integration of high reliability control units along with peripheral analog chips for facilities such as vehicle motors and lightsChiplink's advanced high-voltage analog technology platforms are poised to capture this dynamic market opportunity, representing a significant growth avenue for the company.

Looking ahead to future goals, Zhao concluded by reflecting on the company's ambitious vision: “Between 2018 and the first five-year plan in 2023, we achieved our goal of reaching 5 billion yuan in annual revenue

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