BEIJING, April 24 (Reuters) - NIO is betting that in-house chip development will sharpen its technological edge and improve profitability, Chief Executive William Li said on Friday, as the Chinese
NIO Invests in In-House Chip Technology to Cut Nvidia Dependence and Raise Profits
NIO's Strategic Shift Towards In-House Chip Development
Reducing Reliance on External Suppliers
BEIJING, April 24 (Reuters) - NIO is betting that in-house chip development will sharpen its technological edge and improve profitability, Chief Executive William Li said on Friday, as the Chinese premium EV brand pushes to reduce reliance on suppliers such as Nvidia.
Custom Silicon for Enhanced AI Capabilities
Li said NIO developed its own silicon so its chips could better match the company's algorithms and sensor layout, particularly for AI functions such as advanced driver-assistance.
Profitability and Cost Considerations
He told Reuters in an interview that Nvidia's automotive chips have "very high gross margin," and that by making its own chips NIO could eventually lift its overall profit, despite higher upfront research-and-development costs.
Expansion and Market Competitiveness
Spinning Off Shenji as an Independent Chip Unit
Nio has spun off its chip unit, Shenji, into an independent company, which Li said is open to supplying chips to external customers.
Long-Term Global Competitiveness
Li said NIO's nanometer-scale automotive-grade chips and whole-vehicle operating system would be central to its long-term global competitiveness.
Opportunities in the High-End EV Market
The rise of China's electric vehicle makers presents a "significant opportunity" to redefine the high-end and luxury car market, Li added, opening doors for NIO to become a global premium marque.
(Reporting by Ju-min Park, Zhang Yan and Qiaoyi Li; Editing by David Dolan, Kirsten Donovan)
