There is another cutting-edge semiconductor company in Zhangjiang that has refreshed the industry's perception of speed: Xianji Semiconductor, which has just been established for four years, has completed 5 rounds of financing and listed 6 products, one of which is the first high-performance MCU with embedded ESC in China, and has accumulated thousands of customers in the three major fields of industry, new energy and automotive electronics.
In the field of MCU (Microcontroller Unit), which is the focus of Pioneer Semiconductor, the market continues to grow, and on the other hand, the competition is becoming more and more intense. According to HIS data, the size of China's MCU market will grow steadily from 2023 to 2026, with a compound annual growth rate of about 7%. According to industry estimates, from 2018 to 2024, the number of domestic companies focusing on MCUs will increase from a few to dozens, and products with prices to a few cents abound.
Founded in 2020 by Zeng Jintao, Pioneer Semiconductor focuses on high-performance embedded solutions, covering microcontrollers, microprocessors and peripheral chips, as well as supporting development tools and ecosystems. Zeng Jintao has worked in an internationally renowned MCU company for more than 20 years, and his core management team has rich experience in R&D and management of more than 20 SoC projects for more than 15 years. In 2022, Xianji Semiconductor will become an enterprise in the automotive electronics special session of Zhangjiang Hi-Tech 895 Entrepreneurship Camp (Season 11).
"We are the first MCU company in the world to make high-performance RISC-V cores, and after four years of rapid running, we have created a high-speed growth path that can PK international giants in emerging segments." Zeng Jintao, founder and CEO of Xianji Semiconductor, said that behind their daring to innovate, they benefited from a team that has been fighting at the forefront of the industry for a long time.
Zeng Jintao, chairman and CEO of Xianji Semiconductor
01
New markets, new technologies, new opportunities
In fact, MCU is a mature and fully competitive market, and the mainstream market has been occupied by foreign brands such as ST, NXP, TI, and Renesas, which have more than 90% of the market share. But on the other hand, even the No.1 in the market accounts for less than 20% of the share, and the share of the remaining companies is even smaller.
Although the market is fragmented, everyone at the head is alive and well. The core reason is that there are tens of thousands of applications for MCUs, and there is enough room for development for each market segment.
On the eve of the establishment of Xianji Semiconductor, the MCU market is experiencing a new round of great changes.
First, there is a huge emerging application market in China. New developments in industries such as smart manufacturing, Internet of Things, and autonomous driving have brought new demands, requiring MCUs to develop in the direction of lower power consumption, higher performance, higher integration, and more intelligence.
Second, the demand for domestic chips has increased sharply, especially in the high-end chip market. After 2018, the sales growth of related high-performance MCUs in the Chinese market is the fastest. Due to changes in the international trade situation, domestic manufacturers have begun to seek domestic MCUs as an alternative to imported products.
Third, the underlying technology is also changing dramatically. In the field of processors, the previous mainstream architectures were only x86 and ARM. RISC-V, the third architecture, has developed rapidly since its inception in 2010, and its open-source design has attracted many excellent developers, making it more cost-effective to use, more suitable for modern computing devices, and more performant and power-efficient in scenarios such as warehouse-scale cloud computers, high-end mobile phones, and tiny embedded systems.
When markets and technologies change dramatically at the same time, it often means that new opportunities will emerge. In the middle, Zeng Jintao saw a huge new market gap: before 2020, no MCU company in the world developed high-performance products based on the RISC-V architecture. At the same time, most of the domestic MCU companies focus on low-end markets such as home appliances and consumer products, and their performance and indicators cannot be benchmarked against international brands. "As soon as the RISC-V architecture came out, I felt that it represented the direction of the future; In addition, China's industrial production and intelligent manufacturing are definitely the world's leading, and related products will inevitably go global, which requires the empowerment and support of high-performance MCU chips. Local MCU companies have natural advantages, they are closer to the market, the corresponding speed is faster, and the cost performance can be extreme. ”
Based on these two judgments, he started a business in Zhangjiang with his team in 2020. "We don't want to follow in anyone's footsteps, we just want to address the urgent needs that are coming to the market."
Pictured: Exterior view of Semiconductor's new office in Zhangjiang
02
4 years, 6 series products, nearly 1,000 customers
There is an iron law in the chip industry: no matter how good an individual is, it is difficult to succeed, and there must be a team that can fight a tough battle.
At the beginning of its establishment, Xianji Semiconductor worked in a business incubator in Zhangjiang, and a team of more than a dozen senior technicians in the MCU field worked day and night.
The early employees of Pioneer Semiconductor still miss those hard times to this day. Due to the small number of people, in order to save time, the company unified the order for everyone, even if there is no budget for the fruit after the meal, but everyone has endless energy. "Walking into the company, that kind of hot scene is coming."
A backbone who has been working in Xianji for three years shared that the initiative of the team is mobilized mainly by two points: first, the company is willing to share and develop the backbone into a venture partner; Second, it is believed that domestic MCUs will eventually occupy the world's largest market share, and Pioneer Semiconductor is very likely to become a representative enterprise of high-performance MCUs.
If you want to share the high-performance market monopolized by international giants, how can Xianji Semiconductor make sense?
Yin Zhiyao, chairman of the board of directors of China Micro Corporation, who has been on the road to the localization of semiconductor equipment, mentioned when talking about the way of China Micro Corporation to break through that if you want to achieve transcendence in the field of chips, you cannot repeat the path of others.
Zeng Jintao thought so and did so.
In terms of underlying technology, it took the lead in adopting the RISC-V architecture to make domestic high-performance MCUs, and built a new ecosystem for this purpose. "Xianji was the first company in the world to do this, and the suppliers didn't quite understand why we were doing it."
Since its establishment, Xianji Semiconductor has given high priority to ecological construction, continuously adapted and improved its RISC-V ecology in the industrial field, provided a complete tool chain, and provided familiar development environments and software tools taking into account the usage habits of engineers.
For example, in the early days of its business, Xianji Semiconductor became the first MCU company in China to buy out the right to use the commercial IDE of the German company Segger. One of the benefits of IDE, similar to tools such as "pliers and wrenches" when engineers work, is that its customers can also use Segger's commercial IDE for development for free, which not only helps customers save development costs, but also improves development efficiency.
Last year, Pioneer Semiconductor entered into a strategic cooperation agreement with IAR to provide comprehensive development tool support for its innovative products, including code editing, compilation, debugging and other functions, to help developers fully exploit the potential of Pioneer Semiconductor's high-performance RISC-V MC.
In addition, Pioneer Semiconductor supports 6 RTOS operating systems, including RT-Thread, open-source HarmonyOS, etc., to meet real-time control requirements. In addition, the bottom layer of RISC-V has the characteristics of consistency and compatibility, even if the chip IP is upgraded and switched in the future, it will not affect the user's upper layer use at all.
Zeng Jintao said that many people are familiar with ARM's MCU ecosystem, but more precisely, they are familiar with the ecology built by ST (STMicroelectronics), and what Xianji Semiconductor wants to do is to build a RISC-V ecosystem that engineers are familiar with.
In terms of product strategy, the company implemented the "MCU+" strategy and embarked on the development path of cross-border MCU. When the boundary between MCU and MPU is becoming more and more unclear, cross-border MCUs have emerged, which require products to maintain the high real-time and easy-to-use characteristics of traditional MCUs, while further improving computing power, image processing, communication speed, and control capabilities to meet the market's demand for MCU performance growth.
In order to take into account the improvement of MCU integration and the deep integration with applications, Xianji Semiconductor has launched high-performance dedicated MCU+/SoC chips suitable for various vertical markets one step ahead of others to achieve product differentiation and innovation. In the past four years, Xianji Semiconductor has launched a total of 6 series of products, all of which are high-performance MCUs with super computing capabilities, excellent communication capabilities, precise control capabilities, and excellent multimedia capabilities.
For example, the recently launched Pioneer HPM6E00 series is a crossover MCU for industrial Ethernet and motor control, which integrates the EtherCAT Slave Controller (ESC) officially licensed by Beckhoff Germany, a high-performance RISC-V core CPU, and a wide range of peripherals and motion control functions.
Figure: Pioneer Semiconductor's new HPM6E00 series MCUs (Source: Pioneer Semiconductor)
HPM6E00 attracted attention from the outside world as soon as it was listed. Zeng Jintao said that Xianji MCU is a product that is defined, designed, made in and served by China. HPM6E00 genuine EtherCAT ESC IP with built-in Beckhoff license, the risk of IP is completely eliminated for our customers. "This product fills the gap in the domestic MCU market, and also marks that the mainland industrial MCU has reached the international advanced level."
In addition to catching up with international brands in terms of technical performance, domestic MCUs also have another advantage in serving the domestic market: they are closer to the "sound of guns" on the front line. Today, as the CEO of the company, Zeng Jintao spends 50% of his time communicating with customers. "For startups, only with the market can they survive, and only by being trusted by the market can they have development opportunities, and if we want to define products in a new field, we must think further than customers and deeply understand the application."
In addition, as a domestic MCU company, Xianji Semiconductor can more fully adapt to market demand, such as Xianji FAE (on-site technical support engineer) team 24 hours online to respond to customer questions, software is highly adapted to the Hongmeng system, etc., which foreign brands cannot do.
Therefore, in some applications, Xianji semiconductor has become the best choice in the market.
Today, it is gratifying to see that its development community has gathered tens of thousands of engineers in the ecosystem, who are communicating with each other on various development issues and actively exchanging development experiences every day.
"One of the most direct ways to judge whether a To B startup is reliable or not is to see how many customers are willing to pay for their products. In only 4 years, Xianji has accumulated nearly 1,000 enterprise users, which shows that their products are competitive in the market. An early-stage investor commented that this is the core reason why he believes that Xianji Semiconductor has safely passed from 0 to 1.
03
Domestic MCUs have made a comprehensive breakthrough and reshaped the MCU market pattern
After going through the stage from 0 to 1, the follow-up development speed of Xianji Semiconductor will only be faster.
In the eyes of the company's management, the speed of the semiconductor start-up is particularly important, and they have even incorporated this concept into the company's name: "Hundreds of Battles, Strive First."
They cherish this rare opportunity: in the high-performance MCU track with a very high threshold, this is the first time that a local Chinese company has stood on the same starting line with overseas chip giants. Roll speed and cost performance have always been the advantages of domestic companies. On top of this, Xianji Semiconductor also needs to roll performance.
On the one hand, domestic MCU companies have made a comprehensive breakthrough, and on the other hand, the development of overseas MCU companies has slowed down.
Recently, Infineon, an international MCU company, released its financial report for the third quarter of 2024, with net profit falling 52% year-on-year, and revenue fell short of expectations, so it announced plans to lay off 1,400 people worldwide, and intends to relocate another 1,400 positions to countries with lower labor costs to cut costs.
In fact, Infineon is not alone. According to data disclosed by ST (STMicroelectronics), the revenue in the second quarter of this year was US$3.232 billion, down 25.3% from the same period last year, and the net income was US$353 million, down 64% from the same period last year; Texas Instruments' revenue in the second quarter of this year also fell 16% from a year earlier, due to lower demand from the industrial and automotive industries......
Some analysts have pointed out that the main reason for the slowdown in the growth rate of international MCU companies is that they have faced challenges such as continued sluggish market demand, inventory levels exceeding terminal demand due to weak economy, and delayed recovery of the electric vehicle market in recent years.
From the perspective of industry competition factors, in the traditional low-end MCU market, China's local MCU companies have fought the price war to the point of almost tragedy; At the same time, the breakthrough of local Chinese MCU players such as Xianji Semiconductor and Xinwang Micro in the field of high performance has also intensified the competition of the new generation of MCUs.
All kinds of signs have shown that the MCU market is ushering in an inflection point, and a new market pattern is being formed.
In recent years, the development of local MCU companies has been very fast, and in the face of intensified competition at home and abroad, the pioneer team is still emphasizing the courage to innovate and break through, not only in product technology innovation, but also in various market applications.
Relevant report data has shown that whether it is industrial control, new energy, or intelligent vehicles, AI robots, the largest market for these emerging industries is in China. MCU startups such as Xianji Semiconductor, as long as they gain a firm foothold in one field, will have a chance to survive and develop in the future.
In fact, when the market and technology are superimposed and change in favor of Chinese enterprises, not only in the MCU field, but also in other fields, a number of local companies going international have also emerged. For example, in the field of smart electric vehicles, not only has it given birth to giants like CATL, but also a number of specialized, special and new small giant companies have emerged in more subdivided links, such as Zhangjiang's automotive OTA company Alabi, which has three rounds of financing in one year at its peak, and its local market share has rapidly surpassed that of international giant companies.
Zeng Jintao also believes that Chinese MCU companies are bound to rise and go international in the future. "In another one or two decades, Chinese MCU companies will occupy an important place in the world."
Although the substitution rate of domestic MCUs in many fields has been very high, the remaining parts with high technology concentration and difficult to replace are the development direction of Xianji Semiconductor.
Taking industrial control as an example, the control of robot arms and even finger movements is becoming more and more accurate, which requires high-speed industrial real-time communication and precise control of motors between robot joints, in which MCU plays an important role. Focusing on the motion control of robots, Xianji chips have the advantages of high computing power, strong scalability and compatibility, special peripherals for motor control, flexible packaging, and high-precision ADC and SDM, which have been widely recognized by customers.
In the case of a cold environment, Xianji Semiconductor will still increase investment in research and development. Two months ago, Pioneer Semiconductor received a B round of financing of about 100 million yuan, announcing that the financing is mainly used to enrich the product line of Pioneer Semiconductor's high-performance microcontrollers, and expand and expand its market development in the three major fields of industrial automation, new energy and automotive electronics, especially to accelerate the development of intelligent driving, robots, edge-side AI chips and other fields.
Financing history of Xianji Semiconductor (source: Qichacha)
Zeng Jintao, who is accustomed to doing more and talking less, although he did not talk about the company's grand vision, he believes from the bottom of his heart that Xianji Semiconductor has the advantages of time, place, and people. "There's no reason why we can't do it, we want to have a share of about 50% in the target market."
First, the future can be expected.