BYD Invests in Chip Startup Kunlunxin

In 2023, Chinese automaker BYD is focused on expanding into global markets and enhancing its technological capabilities. Kunlunxin, a chip company in China, has announced that BYD had become one of its new shareholders.

Kunlunxin’s registered capital recently rose from 17.6777 million yuan ($2,569,064) to 17.8525 million yuan ($2,594,468), with BYD now owning 0.33% of the company’s shares.

Established in June 2011, Kunlunxin was formerly known as Baidu‘s Smart Chip and Architecture Department. Baidu is still its current largest shareholder with a shareholding ratio of 70.87%. According to its official website, Kunlunxin completed a fundraising round in April 2021 with a valuation of about 13 billion yuan ($1.89 billion).

Kunlunxin produced its first-generation AI chip in 2020 and deployed over 20,000 of them in Baidu‘s search engine, voice assistant, and other operations. It is the only cloud AI chip in China that has undergone extensive testing with large-scale algorithms. In August 2021, Kunlunxin began mass-producing its second-generation AI chip, which boasts a two-to-three fold performance enhancement compared to the first-generation chip.

As electric vehicles become more intelligent, particularly with regards to automated driving capabilities, more significant demands are placed on their computing power. This necessitates not only that car companies acquire more advanced technology, but also that they acquire reliable suppliers. Over the past two years, chip shortages have plagued the Chinese automotive industry. Even now, leading automotive companies are still operating under reduced production volumes due to insufficient chip supply.

In 2021, BYD’s semiconductor subsidiary invested five billion yuan ($726 million) to acquire Energen Semiconductor, a wafer factory. In 2022, BYD invested in two digital signal processor chip manufacturers.

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In addition, BYD has collaborated with Nvidia and Horizon Robotics in the chip domain. According to the plan, BYD vehicles equipped with Horizon Robotics’ Journey 5 chip will launch in mid-2023. Journey 5 is Horizon Robotics’ third generation auto-grade chip, with a single chip having AI computing power of up to 128TOPS. Starting in H1 2023, some new BYD cars will be outfitted with the Nvidia Drive Hyperion platform for intelligent driving and parking capabilities.

In 2022, BYD sold 1,863,500 vehicles, representing a significant accomplishment resulting from the company’s advantages in production efficiency and cost management. However, BYD has yet to excel in intelligent technologies, even with its top-selling models. The company is presently focused on rapidly closing the gap in this area.