Nio confirmed on Tuesday that it is working with partners to license its proprietary autonomous driving chip to external customers from the automotive industry but also in the robotics field.
The deal marks the Chinese EV maker’s first commercialization of semiconductor technology it has spent billions of yuan developing since 2021.
The company developed two in-house chips since launching its semiconductor unit in 2021: the Yangjian chip for LiDAR control and the Shenji NX9031 for autonomous driving computation, which was unveiled in late 2023.
Chief Executive Officer William Li disclosed the licensing arrangement during Tuesday’s third-quarter earnings call, confirming a report last week by Chinese media outlet LatePost that Nio had secured an automotive semiconductor company as its inaugural chip customer.
The EV maker established earlier this month a chip-focused joint venture with OmniVision and Axera with a registered capital of 100 million yuan.
“Some media has covered the establishment of this chip joint venture. And also we are leveraging our partners of this joint venture to sell our chip and also our IC design capabilities to other clients and also potential users,” Li said on the call.
The CEO said the partnership extends beyond automotive applications.
“We have announced a partnership where we are going to share our chip solution and technologies to more industry players, both from the automotive industry as well as from the non-automotive industry,” Li said.
“We do see a good potential of applying this high computing power chip on different types of devices. For example, on robots,” he added.
Non-Exclusive Partnership
Li emphasized Nio maintains flexibility in its commercialization strategy despite the joint venture arrangement.
“This is not an exclusive partnership,” he said. “We still have the possibility and also the opportunities to sell our chip solution and product to other partners and companies from our side.”
The CEO outlined two distribution channels: direct sales from Nio and sales through partners acting as tier-one suppliers.
“We can also leverage our partners resources to provide our solution to other car companies or other clients. And they will be acting as a tier one, providing such solution,” Li said.
Multi-Billion Yuan Investment
Nio‘s chip development represents an investment equivalent to building 1,000 battery swap stations, Li said earlier this year, putting total spending at several billion yuan based on per-station costs of 1.5 million to 3 million yuan ($210,000 to $420,000).
The CEO said the chip delivers approximately 10,000 yuan ($1,420) in cost optimization per vehicle for Nio’s own operations.
“We also see how this in-house developed chip is contributing to both performance improvement as well as the cost structure optimization,” he said. “So for the long term, we will continue our investments and also efforts in the chip related technologies.”
Technical Leadership
The CEO highlighted the chip’s technological advantages during the earnings call.
“Our NX9031 is the first smart driving chip made of five nanometer process and its tapeout mass production, application on the car, and also full stack operations were all earlier than the competitors of the similar performance in the industry,” Li said.
The Shenji NX9031 uses 5-nanometer automotive-grade process technology with computing power approximately four times that of Nvidia’s Orin-X chip, according to Zhang Danyu, Nio’s chip division head.
The chip currently powers Nio’s ET9 sedan and updated versions of the ES6 and EC6 SUVs and the ET5/ET5 Touring sedans. The brand’s upcoming flagship ES9 SUV is also expected to feature the technology.
Commercialization Structure
Nio established Anhui Shenji Technology as a separate subsidiary in June to house chip operations that previously functioned as an internal business unit.
Last week, Anhui Shenji formed a joint venture with AXera Semiconductor and OmniVision Technologies with registered capital of 100 million yuan.
AXera holds a 36.4% stake as the largest shareholder.
Li said the joint venture partners bring complementary capabilities.
“For our partners, they do have mature experience and also skills in the industry, in the chip design industry,” he said. “They also have their own client and also network connections. And also they have some chip products that can be compliment to our chip across different scenarios.”
“So overall speaking, we believe that this is a win-win partnership,” the CEO concluded.
