Accelerated growth of market scale: industry and capital compete for the third main chip

With the successive disclosure of the third quarterly reports of listed companies, the performance of the Xinchuang industry in the secondary market has ushered in a collective explosion. Due to a series of core issues related to my country’s digital transformation and the independence of the technology industry, the Xinchuang industry has also received extensive attention from capital. Among them, the main chip has also become a hot spot for industry and capital to pursue.

DPU (Data Processing Unit, Data Processing Unit) as a data processing unit, its main goal is to optimize and improve data center performance. From a functional point of view, in recent years, with the increase in the amount of network data and the diversification of application scenarios, the demand for computing power has increased significantly. According to IDC statistics, the global computing power demand doubles every 3.5 months on average. Currently, the growth rate of CPU performance has lagged far behind the growth rate of bandwidth.

Therefore, DPU will hopefully serve as the core supporting component of the next-generation computing power network and become an important part of the computing power infrastructure. At present, due to the excellent performance of DPU in computing, network, storage, security and other functions, it has shown certain advantages in the fields of finance, data center, operators and cloud computing. The scene also has a lot of room for imagination.

Li Rui, chief investment officer of CCB Equity, pointed out: “The data center market has become an important growth point for the global semiconductor industry. The implementation of large-scale projects such as Eastern Digital and Western Computing has further increased the demand for data center core chips such as DPU.”

Market Scale Accelerates Growth Three Types of Players Deploy DPU

In 2019, NVIDIA acquired Mellanox, an Israeli chip manufacturing company. In 2020, NVIDIA announced that the future DPU will become the “third main chip” after CPU and GPU. Since then, it has also opened the curtain of the vigorous development of the DPU industry.

According to data from the Huajing Industry Research Institute, the global DPU market size will be 3.05 billion US dollars in 2020, and will reach 5.07 billion US dollars in 2021. It is expected that in 2025, the global DPU market size will continue to accelerate to 24.53 billion US dollars, with a five-year compound growth rate of 51.73%.

At present, there are mainly three types of enterprises in the market in the field of DPU. In addition to traditional chip manufacturers such as NVIDIA and AMD, cloud computing platforms such as Amazon, Alibaba, and Tencent have also begun to develop their own chips. In addition, with the accumulation of capital in the chip field, a number of domestic companies such as Chipqiyuan and Zhongke Yushu have also begun to develop their own chips. Professional DPU chip innovation companies are also gradually growing.

Although it has grown rapidly, the market size of DPU has not yet been opened, and there are not many domestic start-ups focusing on this. According to CVSource’s investment data, since this year, only five startups including Yunbao Intelligent, Dayu Xinzhi, Zhongke Yushu, Yisixin, and Nebula Zhilian have received a new round of financing in the capital market.

Recently, the domestic DPU chip leader Zhongke Yushu has just completed the B round of financing, with a financing scale of hundreds of millions of yuan. This round of financing was led by Financial Street Capital, followed by CCB Equity and New Fund, and old shareholders Lingjun Investment, Halo Capital, and Quanzong Capital for three consecutive rounds. This is also the fifth round of financing completed by Zhongke Yushu since its establishment in 2018.

Yan Guihai, the founder and CEO of Zhongke Yushu, announced the latest progress of product research and development in an interview with a reporter from the 21st Century Business Herald. At present, the third-generation DPU chip development iteration of Zhongke Yushu is coming to an end, and the second-generation DPU chip K2 will be released this year. This is the first DPU chip with the most complete function definition in China.

Yan Guihai believes that although DPU has great application prospects, each DPU manufacturer has different definitions of products. Therefore, it will take a long time for the entire industry to complete the standardization work and better adapt to the current computing system. .

In order to seize the right to speak in the market and promote their own technical routes and solutions, domestic chip manufacturers have released industry white papers one after another while the DPU technology system and ecology are not perfect, in order to lay a foundation for the formulation of industry standards.

In 2021, Zhongke Yushu took the lead in publishing the DPU technical white paper. In August 2022, it co-edited with the Institute of Computing Technology, Chinese Academy of Sciences, and released the technical white paper “Dedicated Data Processor (DPU) Performance Benchmark Evaluation Method and Implementation”. At the same time, China Mobile also released the “DPU Technical White Paper”, which elaborated the standardization path of DPU from three directions.

Cross-platform adaptation and ecological improvement are indispensable

DPUs are essentially special-purpose chips, and there have always been concerns about their standardization in the market. If DPUs are not compatible with the existing ecosystem and need to be customized to implement functions, their economy and performance will be greatly reduced. In this regard, Yan Guihai emphasized, “Half of our work now is to solve the application problem of DPU, and the first one is the cross-platform adaptation. Because it needs to be embedded into the existing IT system after all, this especially tests the team behind the team. Technical strength.”

Although the DPU industry is in full swing, it still faces many common or individual problems. Compared with the CPU, the requirements of the DPU are relatively fragmented. It is especially worth noting that the software ecology of DPU is not mature enough.

Without a DPU-specific operating system, the entire function and performance of the DPU cannot be fully released, and eventually problems will arise when it is compatible with various upper-layer systems, and those systems are even more fragmented than applications. At the same time, if there is an open source platform with standard interfaces, it will be easier for users to realize the adaptability of business, which will greatly improve the general capabilities.

In order to solve this problem, Zhongke Yushu, like NVIDIA, chose the development path of full-stack self-development of software and hardware. In addition to the chip itself, it also developed the HADOS system, which directly matched the DOCA of NVIDIA DPU. The challenge of developing a software system is no less than the chip itself.

Yan Guihai said, “Yushu has been working on HADOS for two years. We call it a heterogeneous and agile development and operation platform. Eventually, we will make HADOS an open platform, so that more upstream and downstream manufacturers’ systems can be embedded in the Among them, it will attract more terminal developer customers to the HADOS platform and make full use of the advantages that DPU brings to them.”

Under the general trend of digital transformation in my country, computing power infrastructure has become an important dimension of new infrastructure. East and West computing, operators’ computing power network technology planning, etc., also provide opportunities for the application and development of DPU. From the DPU’s four core functions of computing, network, storage, and security, its application scenarios are also very wide, including financial computing, data centers, network security, artificial intelligence, edge computing, cloud native, etc.

Various DPU chip manufacturers are also accelerating product iterations in order to cut into different application fields faster. For example, in the financial securities industry, there is an extreme demand for ultra-low latency. This field has also been monopolized by chip manufacturers for a long time. Among them, AMD occupies more than 90% of the market share, and the rest is almost occupied by NVIDIA. With the development of technology and the help of capital, domestic players have also begun to emerge in global competition.

Yan Guihai told reporters, “For the financial industry, ultra-low latency is just a necessity. After four years of polishing, our Siwei SWIF low-latency DPU network card has been shipped in batches, becoming the only domestic company to enter this segment of applications. At the same time, we have also received orders from various financial customers such as exchanges, securities companies, private equity, and system service providers, and the revenue per product has reached tens of millions of yuan.”

In addition, the upcoming K2 DPU has also been greatly improved and improved in function and performance, and it is expected to be applied to high-performance computing, data center, cloud native, 5G edge computing, autonomous driving and other industries.

In addition to a clear understanding of industry development trends and product routes, Zhongke Yushu is also very mature in grasping the rhythm of financing. Yan Guihai said, “In the early stage, customers know our products and technologies best, and our cooperation is natural. While the company receives financial support, it also helps product iteration. Now our layout is the next generation of computing power infrastructure. , so in the B round, we have introduced partners with strategic layout in this area, hoping to further magnify the value of our product system through the synergy of strategic resources. In the future, when we face large-scale application of products, we may choose to cooperate with Industrial capital cooperation.”