New Stock Analysis | Ingenic Semiconductor (300223.SZ): Niche memory sector on the rise, A+H dual listing empowers expansion of a multi-category chip platform.

The increasing penetration rate of smart vehicles and the proliferation of edge AI devices are reshaping the global semiconductor supply and demand landscape. The current industry is exhibiting structural differentiation characteristics: overseas major players are focusing advanced process capacities on high-end cloud computing and storage products, while the resources available for the mature process tracks relied upon by automotive and industrial control are continuously shrinking. The new production capacity for mature wafers is lagging behind, coupled with stable demand from automotive and industrial control sectors, leading to a tightening supply of automotive-grade low-power niche chips. The change in the supply-demand landscape presents domestic manufacturers capable of self-research and mass production with opportunities for domestic substitution in the process of automotive intelligence and edge AI implementation. The continuous iteration of high-reliability chips, the establishment of a global client system, and the hedging of supply chain risks all require companies to possess the capability for long-term, sustained capital investment. Against this industrial backdrop, Ingenic Semiconductor Integrated Circuit Co., Ltd. (abbreviated as: Ingenic Semiconductor (300223.SZ)) successfully passed the Hong Kong Stock Exchange main board hearing on August 9th. The company plans to use the funds raised through its listing mainly for the technological upgrading of three core product lines; strategic investments and mergers in the industrial chain; the construction of a global sales network; working capital and other general corporate purposes. Storage + Computing + Analog Chip Provider According to the prospectus, Ingenic Semiconductor is a Storage + Computing + Analog chip provider, and the company's products are widely used in automotive electronics, industrial medical applications, as well as AIoT and smart security devices. The company has developed storage chips primarily used in automotive electronics and industrial medical applications (including DRAM, SRAM, NOR Flash, and NAND Flash), computing chips used in AIoT and security, and analog chips (including LED driver chips and Combo chips) for automotive electronics, industry, and household appliances. The products meet automotive-grade and industrial-grade standards, characterized by high quality, high reliability, low energy consumption, and long product lifespan. In the first quarter of 2026, storage chips, computing chips, and analog chips accounted for 65.3%, 25.8%, and 8.5% of the company's revenue, respectively. According to Frost & Sullivan data, Ingenic Semiconductor ranks among the global leaders in several niche chip segments. By revenue, the company ranks seventh in the global niche DRAM market in 2025, with a market share of 2.1%; second in the global SRAM market, with a market share of 23.9%; seventh in the global NOR Flash market, with a market share of 5%; and second in the global IP Cam SoC market, with a market share of 17.6%. Ingenic Semiconductor's ability to achieve leading positions across multiple chip tracks comes from the synergy of several core competitive capabilities. The prospectus summarizes the company's competitive advantages in its trinity product layout, independent core technology, supply chain and quality control, global sales network, and international talent team. R&D is at the core of the company's business strategy, with R&D expenditures planned for 2023-2025 at 708 million yuan, 681 million yuan, and 712 million yuan, respectively, with an R&D expense ratio exceeding 15%; in the first quarter of 2026, R&D investment was 172 million yuan, with an expense ratio of 11%. Taking storage chips as an example, continuous R&D investment focuses on the high performance and high reliability requirements of automotive electronics and industrial medical applications. The automotive and industrial scenarios impose explicit constraints on chips, necessitating automotive-grade production and control processes to achieve wide temperature and humidity operating capabilities, long-term supply, and full-lifecycle support, while also imposing tougher thresholds for data retention durability and defect rates. To adapt to such complex working conditions, the company has implemented multiple self-developed technologies within its storage products: DRAM products are equipped with on-chip error detection and correction technology that can identify two-bit errors and correct one-bit errors, meeting ISO 26262 functional safety standards, and implementing low-cost, easy-to-deploy, and highly integrated solutions compared to mainstream external architectural schemes in the industry; while NOR Flash relies on unique process optimizations to achieve high bandwidth and low power performance, outperforming mainstream industry standards in the read/write and erase performance of its 128Mb NOR Flash, coupled with a built-in error detection and correction mechanism, resulting in data retention capabilities that exceed industry standards. The aforementioned high-reliability R&D approach is also replicated in other product lines. The company's computing chips leverage self-developed RISC-V architecture and lightweight NPU units, iteratively adapting AI-MCUs and vision processors for edge large model inference, covering end devices such as home cameras and industrial Siasun Robot & Automation; the analog chips focus on automotive lighting and industrial power supply scenarios, promoting the iteration of multi-channel integrated Combo chips to meet the electronic upgrading needs of complete vehicles. High Boom Cycle for Storage Chips, Accelerated Revenue Growth In terms of performance, Ingenic Semiconductor achieved revenues of 4.531 billion yuan, 4.213 billion yuan, 4.741 billion yuan, and 1.56 billion yuan for the fiscal years 2023, 2024, 2025, and the first quarter of 2026, respectively; during the same period, the comprehensive gross profit margins were 35.5%, 35%, 32.8%, and 42.6%, respectively; the net profits attributable to the parent company were 516 million yuan, 364 million yuan, 375 million yuan, and 320 million yuan. It is understood that inventory destocking is ongoing in the downstream channel in 2024, with weak terminal demand exerting pressure on revenue and profits; by 2025, industry inventory is gradually cleared, leading to a market recovery; and by 2026, market conditions are expected to further improve, with a significant recovery in profitability driven by an increase in both volume and price of products. Specifically, in the first quarter of 2026, the companys revenue from storage chips, computing chips, and analog chips reached 1.018 billion yuan, 403 million yuan, and 132 million yuan, respectively, with year-on-year growth rates of 53.6%, 49.1%, and 11.1%, with storage chips contributing the largest increment. Looking at the global storage chip market, the Frost & Sullivan report notes that the resonance of multi-scenario demand is driving expansion in the storage industry: AI large models are giving rise to PB-level high-capacity, low-latency storage needs, stimulating the volume of HBM and 3D DRAM; the electrification and intelligence upgrades of vehicles are creating new demands for high-capacity, high-reliability storage from lidar and autonomous driving domain controllers; industrial machine vision and edge computing are broadening the market for industrial-grade storage; and the ongoing demand for high-capacity, low-power storage is driven by folding AI phones and smart wearables. At the same time, against the backdrop of global supply chain restructuring, countries are accelerating the self-controllability of the storage industry chain, with domestic manufacturers rapidly iterating 3D DRAM and 3D NAND technologies, gradually achieving bulk domestic substitution for automotive and industrial storage; overseas storage giants are adjusting capacities and deepening technological collaborations, indicating that the industry is gradually weakening purely price wars and evolving towards value competition. From 2021 to 2025, the global niche storage market is expected to grow at a compound annual growth rate (CAGR) of 6.8%, with projections showing that the CAGR will rise to 11.8% from 2026 to 2030, with a market size reaching 29.5 billion USD by 2030. Benefiting from the industry cycle recovery, the average selling price of the companys products is also rising. In the first quarter of 2026, Ingenic Semiconductor's average selling price for storage chips was 5.3 yuan, up 10.4% year-on-year; the average price for computing chips was 15.1 yuan, up 32.5% year-on-year, with both volume and price increases driving a year-on-year increase in the gross profit margin of 7.6 percentage points to 42.6%. In the medium to long term, the realization of Ingenic Semiconductor's two core growth lines remains to be validated over time. First, the intelligence of vehicles is driving up the storage usage per vehicle; currently, the automotive-grade storage market is still dominated by overseas manufacturers. Due to concerns about supply chain security, automotive manufacturers are increasingly willing to introduce secondary and multiple suppliers. The company has a solid foundation for the mass production of automotive-grade storage and global customer certifications, securing its entrance for domestic substitution, but the cycle for automotive certification is long, and the pace of actual implementation has uncertainties. Second, under the trending wave of edge AI, the companys self-developed RISC-V architecture and AI-MCU products are in the early stages of scaling up, and whether the computing business can break out of its original foundation in security to open up new market space remains to be observed. Overall, relying on its comprehensive product matrix of "Storage + Computing + Analog" and continuous R&D investment, Ingenic Semiconductor stands at a phase of industrial dividend window created by the adjustments of capacity strategies from major manufacturers. The listing on the Hong Kong Stock Exchange to supplement capital is expected to aid in technological iterations and overseas market expansion, consolidating its current position in the niche chip field. However, it is also essential to objectively recognize that this round of industry dividend largely stems from the cyclical changes in the allocation of capacity by overseas manufacturers, making it challenging to directly permanent competitive barriers. Once overseas original manufacturers increase their investments in mature processes again, or if domestic related capacity releases exceed expectations, the current tight balance of supply and demand may be disrupted. Coupled with the slow introduction of automotive projects and uncertainties in the commercialization of new businesses, the future growth realization of the company still needs to be continuously observed alongside the evolution of the industry landscape and the progress of its own business implementation.