Text/Di Lin Review/Zi Yang Proofreader/Zhi Qiu
On January 1, 2021, observers reported that at the end of 2021, a good news came from Loongson Zhongke.
Domestic CPU giant Loongson
According to the relevant process in the official website of the Shanghai Stock Exchange, the IPO of the science and technology innovation board of the domestic CPU design company Loongson Zhongke has been officially submitted for registration after half a year of review.
If it goes well, Loongson Zhongke will become the first domestic CPU company in A-shares before the Spring Festival in 2022.
For Loongson Zhongke, there are not many people who originally know, and most ordinary consumers may have heard of it. However, thanks to Intel's provocation of the Chinese market on Xinjiang-related issues, more and more Chinese people have begun to pay attention to the domestic CPU field.
China's CPU market has been monopolized by American giants such as Intel and AMD for a long time, so many Chinese people are eager to understand the recent situation of domestic CPUs.
As a leader in the domestic CPU industry, Loongson Zhongke has naturally received great attention from inside and outside the industry.
On the one hand, it is the influence of the external environment, on the other hand, because Loongson Zhongke is a pioneer in breaking overseas monopolies with a "national team" background in the domestic CPU field.
Core technology 100% self-developed
According to public information, Loongson Zhongke is jointly funded by the Chinese Academy of Sciences and the Beijing government, and in 2008 it was the establishment of an enterprise focusing on computer core technology.
The predecessor of Loongson Zhongke is the Loongson Research Group of the Institute of Computing of the Chinese Academy of Sciences, which successfully developed China's first general CPU Loongson No. 1 as early as 2002.
Thanks to the resources of the Chinese Academy of Sciences and the strong support of the Beijing government, Loongson Zhongke has been upgrading and iterating on domestic CPU chips since 2002.
At the same time, Loongson Zhongke has also successfully overcome key technologies such as instruction sets and kernels. Different from other domestic CPUs, Loongson Zhongke's CPU localization is quite thorough, and the instruction set system and IP core of its chips are independently developed.
This largely fills the gap in the core and instruction set of the domestic CPU, and realizes the independent controllability of the CPU.
It is no exaggeration to say that Loongson Zhongke is the representative of pure domestic CPU, so when will this representative catch up with the arrogant Intel and realize the domestic replacement of CPU chips?
In my opinion, this is by no means a goal that can be achieved in the short term.
It should be known that Loongson Zhongke has only been established for twenty years, and Intel's research on CPU chips and instruction sets, architecture, etc., is at least thirty years ahead of Loongson Zhongke.
There are many difficult problems in wanting to chase Intel
In addition to the gap brought by the time, Loongson Zhongke also faces many problems in terms of development.
First of all, although Loongson Zhongke is backed by the Chinese Academy of Sciences and the Beijing government, its financing channels are actually very limited. The IPO on the Science and Technology Innovation Board is to expand financing channels, raise more funds to supplement corporate liquidity, and continue to deepen the independent research and development of core technologies.
According to the content of Loongson Zhongke's prospectus, the company intends to raise 3.5 billion yuan in the IPO, equivalent to twice the company's total assets.
However, this funding is not enough for Intel's cost expenditure for half a month, which shows that the two sides are not in an echelon at all.
Secondly, the market competition faced by Loongson Zhongke is too fierce. In addition to fighting international giants such as Intel and AMD, the company also needs to compete with domestic companies such as Huawei Kunpeng, Shenwei Technology, and Shanghai Zhaoxin.
Therefore, in order to compete for the market Loongson Zhongke continues to reduce product prices, resulting in a continuous decline in gross profit margin in recent years.
Prospectus data shows that from 2018 to June 2021, loongson Zhongke's comprehensive gross profit margin fell by about 20%, which led to the company's profitability is very difficult.
It is true that since 2018, Loongson Zhongke has not suffered losses, but this is mainly because the amount of government subsidies has contributed a lot.
For example, in 2018, the amount of government subsidies for Loongson Zhongke accounted for more than 85% of the total profit of the current period.
Even in the first half of 2021, this figure reached 46.85%. In addition, the assets and liabilities of Loongson Zhongke are not optimistic.
According to the officially released icons, compared with Beijing Junzheng, Jingjiawei, Gigabit Innovation and other peers, loongson Zhongke's asset-liability ratio can be described as "one horse first", more than twice the average.
Finally, Loongson Zhongke chose the most difficult route in China at present, that is, the instruction set system and IP core are all self-developed.
This road can help domestic CPUs master independent intellectual property rights in technology, but at the same time, it also needs to build a mature enough ecology in China.
The ecology of the CPU refers to the software system, corresponding to a wealth of applications, but compared with the research technology, the construction of the ecology is more difficult.
In the words of Hu Weiwu, president of Loongson Zhongke, the CPU of Loongson Zhongke can be the world's first in performance. But without ecology, users will not use you, and no one will use it and no one will develop software for hardware.
This is a vicious circle, and it is also a serious challenge commonly faced on the road of independent research and development in many fields in China.
Write at the end
It can be seen that Loongson Zhongke is indeed a leading domestic CPU company, but it will take decades to catch up with Intel.