BYD Invests in Two Digital Signal Processor Makers

BYD, China Fortune-Tech Capital and other entities have recently invested in Advancechip, a digital signal processor (DSP) maker, according to Chinese business data platform Tianyancha. Advancechip is the second DSP maker BYD has invested in so far this year, following its participation in round-A financing for Haawking in July.

According to statistics by China Star Market, BYD has invested nearly 20 times since this year, the most in recent years. Among BYD’s external funding decisions this year, chip projects have accounted for the majority with eight, followed by high-end manufacturing, batteries and energy storage technology, with three each.

Advancechip was founded in October 2012, but did not begin to carry out financing until 2016. In 2018, the company accelerated its financing strategies. Up to now, it has completed eight rounds of financing, with investors including Rowth Capital, Shenzhen Capital Group, Galaxy Group, and China Capital Management. At present, the DSPs developed by the company are mainly used in CNC machine tools, industrial robots, treadmills, and high speed blenders. It has become a partner of Huawei, Midea, Gree and other enterprises.

Founded in January 2019, Haawking is mainly based on RISC-V instruction set architecture, focusing on the research and development of DSPs. At present, the team size of Haawking is more than 70 people, and R&D personnel account for nearly 70%. The DSP market is still the focus of Haawking, while the company is exploring new energy vehicles, energy storage and photovoltaics, home appliances, digital power supply and other areas.

In addition to cars, BYD has strong performance in terms of batteries, contract manufacturing and semiconductors. In 2002, BYD set up an integrated circuit design department to conduct in-depth research on power semiconductors and IGBT. Investing in chip makers is also a bid to semiconductors.

According to data by China IRN, the global DSP market size reached 21.6 billion yuan ($3.04 billion) in 2020, and is expected to reach 34.9 billion yuan in 2026, exhibiting a compound annual growth rate (CAGR) of 6.8%.

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Investors who focus on the chip sector told the China Star Market that the DSP sector is mainly occupied by overseas giants, with Texas Instruments, Analog Devices and Motorola taking more than 80% of the market share. “At present, the DSP manufacturers in China are rising rapidly, but the chip research and development cycle is long and the investment is huge. It is not easy to achieve the goal of producing chips with high quality and strong versatility.”