HONG KONG -- Chinese startup Horizon Robotics raised $600 million on Wednesday for its chipmaking business, as venture capitalists tap into the country's growing appetite for the made-in-China chips.
Horizon Robotics, one of China's leading unicorns, is valued at $3 billion after the closing of the series B-round fundraising, led by SK China, South Korean semiconductor SK Hynix, and several undisclosed Chinese automakers.
The 3-year-old startup, established by former Baidu executive Yu Kai, specializes in the design of artificial intelligence chips. The company does not have a factory but has outsourced its manufacturing to Taiwan's Taiwan Semiconductor Manufacturing Co. Its $100 million A-round fundraising in 2017 was led by U.S. chip giant, Intel.
Since it started mass production in April, Horizon Robotics has already "shipped hundreds of thousands of chipsets" to clients, including self-driving car producers and smart device manufacturers, according to the company's spokeswoman.
"We expect to scale up our chip production this year, with estimated sales of several million units," she said, adding that the Beijing-based company is scheduled to roll out its second-generation AI chips starting from mid-2019.
The fresh investment into Horizon Robotics served as the latest reminder that China is accelerating its drive to create a domestic chipmaking industry to fend off the risk of a U.S. crackdown on supply as Washington attempts to curb the country's ambition to dominate high-tech industries. In January, Huawei Technologies, the world's biggest telecom equipment maker, introduced a new core processor chipset as an alternative to Intel's products. China's e-commerce titan Alibaba Group Holding, for its part, will kick off mass production of its first self-developed AI chip in the second half of this year.
At January's CES, an electronics trade show in Las Vegas, an executive from Horizon Robotics jokingly thanked U.S. President Donald Trump for helping boost market demand.
"In the past, Chinese companies did not care about where their chips came from. But now, if there are chips from both Chinese suppliers and American ones, they would intentionally choose the Chinese," the executive said, citing concerns over potential restrictions on U.S. exports.
Last year, a U.S. ban on doing business with ZTE almost drove the Shenzhen-based telecom equipment maker into bankruptcy. Days after Washington prohibited ZTE from using US-made chips, Alibaba, whose business also includes cloud computing, acquired Hangzhou-based chipmaker C-SKY Microsystems.
The Horizon Robotics executive, who described U.S. sanctions against ZTE as "good news for domestic chipmakers," told the Nikkei Asian Review that soaring demand has translated into rapid expansion for his company. When he joined Horizon Robotics in early 2018, the startup had around 300 employees; Today, there are more than 1,000. The executive asked to not be named as he is not authorized to speak with the media.
Horizon Robotics said the new funding will be used to finance its research and development efforts, as well as exploring how to commercialize AI solutions built upon its chips. Hong Kong-listed Xiaomi, for one, recently unveiled a smart speaker powered by Horizon Robotics's voice recognition technology. The startup also said it has teamed up with automakers including Audi, Bosch, and China's SAIC Motor Corp. to codevelop autonomous vehicles.