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HIGHLIGHT
Liu’s confident tone throughout his speech is being seen as a sign that the company seems to have passed its dark days in the grip of US sanctions due to its “seizing of the strategic opportunity of large language models.”
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TechNode Stories
iFlytek chair delivers confident speech to employees despite projected net profit fall of over 70% for 2023
Chair of iFlytek Liu Qingfeng told employees that the Chinese voice-recognition company has “resisted the extreme pressure from the US” and is entering “a new period of strategic opportunity,” at his firm’s annual general meeting. Speaking on Tuesday, Liu again benchmarked iFlytek’s upgraded Spark against GPT-4 Turbo, saying it expects to be as powerful as OpenAI’s most advanced model in the first half of 2024.
Why it matters: Liu’s confident tone throughout his speech is being seen as a sign that the company seems to have passed its dark days in the grip of US sanctions due to its “seizing of the strategic opportunity of large language models.”
NIO Capital raises new RMB 3 billion fund despite cooling VC climate
NIO Capital, a venture capital firm founded by Willliam Li, chief executive of the namesake electric vehicle maker, has raised a new China-focused fund of more than RMB 3 billion ($416.8 million), despite a global market lull and domestic economic challenges.
Why it matters: The fundraising milestone will allow NIO Capital to further explore the “transformative potential of innovative technologies in the automotive and energy sectors,” said Ian Zhu, a managing partner at NIO Capital, in a Monday announcement.
Nvidia’s tailored-for-China H20 AI chip now available for pre-orders, set for competition with Huawei: report
Nvidia is making a strategic return to the Chinese market by introducing its China-specific H20 AI chip, a move that comes after US policies affected the company’s sales in China. Nvidia has begun taking pre-orders from distributors for its H20 AI chips, priced almost on par with Huawei’s Ascend 910B, according to Reuters.
Why it matters: To address challenges posed by the US’s bans on the sale of certain GPUs (Graphics Processing Units) to China, Nvidia has launched cut-down variants compliant with American export policies. Amid concerns about potential limitations on accessing Nvidia’s products, Huawei’s chip is widely acknowledged as the leading alternative AI offering in China.
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News Feed
Sunday, February 4
▪️Chinese automakers saw their share of the global electric vehicle market rise to 68.2% over the last three months of 2023, compared with 57.4% as of March, as European car companies’ market share declined to the lowest level since 2019 on the back of shrinking subsidies and weak sentiment. The numbers were published by Cui Dongshu, secretary general of the China Passenger Car Association (CPCA), on his WeChat account on Saturday. Specifically, sales of China’s green energy passenger vehicles, including pure EVs and plug-in hybrids, increased by 37% to nearly 8.9 million units last year, outperforming a 16% rise and a volume of 2.9 million units from European firms, according to CPCA figures. The industry group expects China’s new energy vehicle sales to surpass 11 million units in 2024, up 22% from last year and representing a penetration rate of 40%. [Cui Dongshu, China Passenger Car Association, in Chinese]
▫️Meituan CEO Wang Xing is taking direct control of the food delivery giant’s overseas businesses and drone delivery in its largest overhaul in recent years, according to Wang’s employee-faced memo on Friday, as Meituan sets to step up bets on international markets amid more serious challenges inside China. As part of the reorganization, the company integrates its in-store and food delivery services that previously operated independently, with the consolidated division reporting to Meituan Senior Vice President Wang Puzhong. “The current situation for Meituan is full of challenges, both internally and externally, but it is an opportunity for the company to grow further at the same time,” Wang said in the email. The integration of Meituan’s most vital businesses within its core local segment comes at a time when the main delivery operation has slowed in recent months while Douyin poses aggressive threats to its in-store services through highly subsidized strategies. [21jingji, in Chinese]▪️China’s e-commerce giant Alibaba is reportedly set to sell the grocery supermarket chain Freshippo and offline retailer RT-Mart, according to a Friday report by Reuters. This marks the latest news on the company’s potential sale of its non-core and loss-making businesses. However, the report added that these selling discussions are at an early stage, and Alibaba may not proceed further. Founded in 2015, Freshippo signifies the Taobao owner’s ambitious entry into offline supermarkets and has diversified into various business forms, including the membership-only X store and the budget brand Freshippo Outlets, boasting over 300 stores nationwide. The Hangzhou-based company’s loss-making units have frequently been rumored to be up for sale since new management came on board in September, as it aims to focus more on its core business of domestic e-commerce. Alibaba did not immediately reply to a TechNode comment request. [Reuters]
Monday, February 5
▪️Chinese car manufacturer Chery Auto has formed a standalone business unit for its Luxeed electric vehicle brand, a move that could increase the speed of decision-making and enhance its partnership with Huawei, sources told the auto services portal Yiche on Sunday. The news comes after reports that the partnership might be in trouble, leading to a senior executive from Chery recently quitting his job and many customers waiting for up to a few months for the delivery of their first joint model, the Luxeed S7 sedan. The two companies, in late 2020, forged their alliance with plans to jointly launch at least five new EV models featuring Huawei’s in-car technology, such as automated driving systems. The first model, the S7, went on sale on Nov. 28 with a starting price of RMB 249,800 ($34,921). [Yiche, in Chinese]
▫️On Sunday, tech blogger Smart Pikachu revealed on China’s Twitter-like platform Weibo that the Xiaomi 15 smartphone will debut with the Snapdragon 8 Gen 4 and is expected to be released around October this year. The Xiaomi 15 series is expected to enter into mass production in September, with testing so far ahead of schedule, another account called Digital Chat Station added. Qualcomm may accelerate its efforts to release the upcoming flagship Snapdragon 8 Gen 4, aiming for mass production as early as September, according to US tech media Wccftech. Alongside its powerful hardware, the Xiaomi 15 Pro is reportedly set to feature advanced satellite communication capabilities, following in the footsteps of Huawei’s satellite-enabled devices. [IThome, in Chinese]▪️Alibaba’s enterprise communication tool DingTalk launched an official version built for the Apple Vision Pro on Feb. 4, two days after the hardware’s release in the US. The software features a range of workplace functions, including chats and meetings in a virtual environment. Based on the new visionOS features, DingTalk has created a “complete 3D environment” for the native app on the iPhone maker’s revolutionary spatial computer, boasting a number of “unique features,” the platform said in an official WeChat post. These unique features include enabling parallel processing of multi-tasks and “persona,” which shows users’ real-time facial and hand movements. Apple’s Vision Pro has not yet officially landed in China, but CEO Tim Cook said a launch in the country is coming “soon”. [DingTalk, in Chinese]▫️Chinese telecoms giant Huawei reclaimed the top spot in Chinese smartphone sales during the first two weeks of 2024, according to market research firm Counterpoint’s China Smartphone Weekly Model Sales Tracker Report. The performance marks a strong comeback for Huawei, as the company has experienced a consistent decline in market share since US sanctions were introduced in 2019. The report attributes this achievement primarily to Huawei’s new flagship Mate 60 series, featuring the self developed Kirin 9000S chip. Additionally, renewed brand loyalty and the launch of the HarmonyOS operating system have both played key roles in the company’s resurgence in the market, the report noted. [Counterpoint Research, in Chinese]
Tuesday, February 6
▪️Huawei has recently been preparing for the mass production of a new triple-folding smartphone, with an expected launch as early as the second quarter of this year. As the hinge is a key component in foldable phones, reports suggest that Huawei has expanded its hinge orders from the Taiwanese manufacturers Jarllytec and Fositek. The Chinese panel maker BOE is expected to supply the screen for the triple-folding phone, which may adopt a Z-shaped design with a folded screen size of approximately 6.4 inches. Differing from current foldables using a 16:9 or 18:9 design, Huawei’s upcoming triple-folding smartphone might feature a 28:9 or 18:9 design, providing users with an innovative transformation from phone to tablet. [Icsmart, in Chinese]
▫️Chinese e-commerce giant JD said on Monday that it has raised the salary for its over 20,000 customer service staff from Feb. 1, with more than a 30% increase in the annual average wage. This commitment comes a month after the Beijing-based company promised to offer an average growth of 20% for its retail unit, while procurement and sales employees would see their salary nearly double in 2024. The online retailer has increasingly poured investment both internally and externally, as it also prepares to send 100 million gifts during China’s most-watched Spring Festival Gala, set to air on Feb. 9, as part of its “exclusive interactive partner” role with this year’s event. Gifts include one year’s access to a single-family mansion, Voyah cars for one-year driving, as well as rose bouquets, the company said on Tuesday. [JD, in Chinese]▪️In 2023, tablet PC shipments witnessed a notable decrease of 10% year-on-year, reaching 1.353 billion units, according to the latest data from market analyst firm Canalys. Chinese tech giant Lenovo took the third place with a market share of 6.9%, while Huawei secured the fifth spot with 6.1%. Amazon experienced the largest decline in market share among the top five companies this year, dropping from 9.1% in 2022 to 5.8%. Notably, Huawei was the only brand among the top five to maintain yearly growth of 1.9%. The report revealed that China and India played key roles in driving tablet sales and served as essential markets to offset the prevailing stagnation observed in other regions across the globe. [Canalys]▫️Alibaba’s domestic marketplace, Taobao, is on the way to giving away red packets worth a total of RMB 1 billion ($140 million) that could be used for shopping on both Taobao and Tmall platforms within the specified period, the company said on Monday. Beginning on Feb. 5, the bonus-accumulating campaign lasts for 12 days, with users earning more cash rewards of up to RMB 1,888 by sharing links with friends. Taobao and JD, Chinese top e-commerce players, are increasingly giving real money subsidies to lure shoppers, while a low-price strategy remains their main operational focus due to rival Pinduoduo showing no sign of stagnation in high revenue growth rates. [Taobao, in Chinese]
Wednesday, February 7
▪️Tencent is adapting the action role-playing console game Elden Ring into a mobile game to revitalize its aging game portfolio. In 2022, Tencent secured licensing rights from Japanese game developer FromSoftware and formed a team to develop a prototype. The same year, Tencent acquired a 16% stake in FromSoftware, but progress on the adaptation has been slow. Tencent aims to offer the mobile version of Elden Ring as a free-to-play game with in-app purchases, similar to miHoYo’s popular game Genshin Impact. Elden Ring, released in 2022 for $60, sold around 20 million copies in its first year, ranking as the world’s second best-selling game in 2022. Additionally, Elden Ring received the Game of the Year award at the Game Awards 2022, a prestigious ceremony recognizing the best video games of the year. [Reuters]
▫️Finnish telecoms firm Nokia announced on Monday that it has signed a multi-year patent license agreement with the Chinese phone brand Vivo. Nokia had previously accused Vivo of patent infringement and won a case against the Chinese firm in a German court last year. Under the new agreement, which resolves all pending patent litigation between the parties in all jurisdictions, Vivo will make royalty payments to Nokia, as well as back payments to cover the dispute period. Jenni Lukander, President of Nokia Technologies, stated that the Vivo deal means that Nokia has now concluded patent license agreements with six major smartphone brands in the last 13 months. [Nokia]▪️NIO is gearing up for the test production of its initial electric vehicle model for the mainstream market, set to commence in July, with a planned launch as early as October. The Chinese premium EV manufacturer aims to enhance sales amidst escalating competition in its home market. The company has set an ambitious target to deliver "several tens of thousands" of the upcoming sedan this year and is eyeing a sales goal of 230,000 NIO-branded EVs, according to sources cited by 36Kr on Monday. Last June, Chief Executive William Li informed investors about NIO's plan to unveil the first model under the new brand in the second half of 2024. This brand, codenamed Alps, is priced between RMB 200,000 and RMB 300,000 ($27,820-$41,730). Additionally, another small car brand, codenamed Firefly and priced even lower, is slated for a debut later this year. [36Kr, in Chinese]▫️US chipmaker onsemi reported a record revenue of $4.3 billion for the automotive business for the fiscal year ending Dec. 31, reflecting a 29% year-on-year growth driven by robust demand for high-resolution image sensors for advanced driver assistance systems. Specifically, the company’s 8-megapixel image sensors for advanced safety features nearly doubled in revenue year-over-year, as highlighted by Chief Executive Hassane El-Khoury during an earnings call. The revenue surge is also attributed to the increasing demand for its silicon carbide chips, with business revenue witnessing “the highest growth in the industry,” reaching over $800 million, approximately four times higher than a year ago, El-Khoury added. Silicon carbide (SiC) power modules, featured in the company’s chips, can operate at much higher voltages than traditional silicon-based ones, enabling faster recharging and longer driving ranges for electric vehicles. Parts suppliers like Bosch and Infineon have been expanding their capacities to meet the surging demand. [onsemi release]
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