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Chips&Media Intensifies Sales of AI Semiconductor “NPU” IP for the Specific Video Applications This Year

Seoul, South Korea - Feb 3, 2024

Projects with large companies raise expectations of license and royalty revenue growth.

Chips & Media, a video IP provider, has completed “CMNP”, an AI semiconductor “NPU” IP for specific video applications, and is promoting it to both domestic and overseas customers. Following the completion of CMNP development in September of last year, sales are expected to ramp up starting this year.

NPU, an AI semiconductor optimized for the ultra-large AI era, is hailed as the next-generation core semiconductor, boasting computation speeds ten times faster and power consumption five times lower than NVIDIA GPU. With the proliferation of On-Device AI, the significance of NPU has surged in Korea, drawing market attention to Chips&Media’s NPU IP. While numerous companies worldwide are pursuing NPU development, Chips&Media stands out as the sole entity to have autonomously completed the development of NPU dedicated to video processing.

On the 29th, a Chips&Media official stated, "Numerous companies have shown keen interest in our NPU IP. We are engaged in many projects with major corporations, so the likelihood of royalties following licenses is increasing."

The NPU IP developed by Chips&Media integrates image processing algorithms, including Super Resolution (SR) for high-definition images, Noise Reduction (NR) for removing noise in videos, and Object Detection (OD) for identifying objects.

Lee Sangheon, a Hi Investment & Securities researcher said, "Chips&Media is poised to experience substantial growth through license sales of CMNP this year. Competition for US-China technology supremacy will also underpin revenue growth in sectors such as US data centers and Japanese automobiles, thereby accelerating its financial performance improvement."

Chips&Media, listed on KOSDAQ in 2015, is dedicated to developing and selling system semiconductor design assets (IP). Its video IP is licensed to semiconductor chip manufacturers, who then utilize Chips&Media’s technology to design, develop, manufacture, and deliver semiconductor chips for smartphones or digital TVs. Drawing on extensive, long-standing expertise in the video IP field, Chips&Media is driving royalty after licensing with the companies for GPU of servers in the data center, NPU for edge devices, and semiconductor industry licenses for autonomous vehicles.

“The probability of royalties from licensing is typically over 50%. Most significant projects with major companies have resulted in royalties in recent years. Upon entering mass production, the average royalty price per chip is around 5 cents. With over 200 million chips produced annually, this generates royalties exceeding 10 billion won.” said the Chips&Media official.

Since its listing on KOSDAQ, Chips&Media has also experienced a steady rise in stock prices. In 2020, the price surpassed 20,000 won per share, affected by factors related to the shortage of automotive semiconductors. Furthermore, the stock has seen gains since last year due to its involvement in AI semiconductor-related sectors. In July last year, it peaked at 45,400 won per share.

According to FnGuide, a financial information company, Chips&Media has demonstrated sales growth each year. Sales figures show an increase from KRW 15.4 billion in 2020 to KRW 20 billion in 2021, KRW 24.1 billion in 2022, and KRW 27.8 billion in 2023 (provisional), marking an annual growth rate of approximately 20%.

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