Introduction: A “battle to break the deadlock” in a chip war

In 2025, a "war" triggered by the US's restrictions on chip exports to China is reshaping the global automotive industry chain. Behind the urgent visit to China by Nvidia founder Huang Renxun in a suit and tie is the collective awakening of Chinese automakers to "Nvidia dependence" - from smart driving chips to automotive -grade sensors, a domestic substitution "core" revolution is erupting. Data shows that China's new energy vehicle sales accounted for 70% of the world in 2024, but the automotive - grade chip supply chain has long been controlled by others. Today, automakers, suppliers and chip manufacturers are accelerating their breakthrough at the "China speed", and domestic chips are ushering in a historic opportunity.

1. The US "chip stranglehold" forces domestic substitution: car companies collectively "change chips"

In April 2025, the US chip tariff on China was upgraded to 125%, and China's countermeasures were implemented simultaneously. This "chip war" directly impacted the supply chain of Chinese automakers:

Soaring costs: Huaqiangbei chip market rose by 20% in a single day, and the prices of some memory chips

doubled;

Delivery risk: Automakers that rely on U.S. chips are facing a "no chips available" crisis.

For example , due to tariff issues, suppliers such as Magna and Sunny Optical are urgently looking for alternatives for ON Semiconductor's CIS chips.

Technological bottleneck: Nvidia's Orin-X chip once accounted for 40% of the global intelligent driving chip

market, but the US ban has caused its installed capacity in China to face a cliff-like decline.

The "urgent task" of car companies :

BYD : Announced to develop its own automotive - grade silicon carbide chips and plans to reduce Nvidia chip purchases to less than 10% by 2025 ;

Xpeng and NIO: The self- developed computing chips "Turing" and "Shenji" are about to be mass-produced, with computing power close to Nvidia's Thor chip, and the cost is reduced by more than 10,000 yuan;

Supplier shift: Magna and Sunny Optical have turned to non-US manufacturers such as Sony and OmniVision Technologies, and the number of inquiries for domestic chips has increased by 3 times.

2. Domestic chip "competition": from OmniVision to Sony, who is the winner?

In the "chip replacement trend" of auto companies, domestic and Japanese chip manufacturers have become the biggest beneficiaries:

OmniVision Technologies (under Welltech): With its CIS chip technology advantages, its revenue will increase by 23.5% and its net profit will soar by 498% in 2024 ; it will cooperate deeply with BYD , NIO and other car companies, becoming the "preferred target" to replace ON Semiconductor.

Sony (Japanese "dark horse") : As a global CIS chip giant, it has become a "safe card" for car companies due to its non-American identity; insiders revealed that shipments will surge by 50%-90% in 2025, and Tesla and BYD are both on the list of potential customers.

Yachuang Electronics (representative of domestic breakthrough) : By acquiring South Korea's Tamul power management chip business, it accelerated the process of independent research and development ; customer acceptance increased significantly , and major automakers went from "rejection" to "active testing", and the order volume doubled.

Competitive Strategy:

Price war: some domestic manufacturers have introduced a policy of "cost price for orders of 500,000 pieces or more", and even tried to seize the market at a loss;

Technology war: The rise of self- developed chips by automakers , BYD, Huawei Ascend and others breaking Nvidia's monopoly, Horizon Robotics and Black Sesame's orders surge;

Talent war: Chip manufacturers are frantically "poaching" rival teams, offering salaries 30%-50% higher than the market price.

3. The “pain” and future of domestic chips: from “usable” to “easy to use”

Although domestic chips have ushered in an explosion, the challenges remain severe:

Long testing cycle: It takes 3-6 months to verify the chip before it can be installed in a car, and car companies need to consume inventory during the transition;

Technology gap: high-end computing chips still rely on imports, such as Nvidia Thor's 700TOPS computing

power, and domestic chips still need to catch up;

Production capacity pressure: Leading manufacturers such as Sony and OmniVision are facing an oversupply of orders, while small and medium-sized manufacturers "dare not accept orders."

Breakthrough direction :

Policy + capital support: The country's "14th Five-Year Plan" clearly supports the localization of automotive

-grade chips, and special funds have been established in many places;

development by car companies has become the mainstream: BYD, NIO and others have reduced supply chain risks through vertical integration;

Ecosystem collaboration: Chip manufacturers and car companies jointly build laboratories to shorten the adaptation cycle.

Conclusion: The "golden age" of domestic chips has arrived

From "lack of core and soul" to "independent control", the "chip replacement" of Chinese auto companies is not only a forced response, but also a proactive breakthrough. This crisis caused by geopolitics has instead given rise to the "golden age" of domestic chips - companies such as Howe, Horizon, and Ascend have risen rapidly, and BYD and Xiaopeng's self- developed chips are pointing to the ceiling of the industry. In the future, when domestic chips truly achieve "from being usable to being easy to use", the global competitiveness of China's new energy vehicles may usher in a qualitative leap.

At this moment, the battle for China's chips has just begun.