Edge SoC Industry Research Report: The Inflection Point, Pricing Power, and Value Traps of On-Device AI

Report Date: 2026-08-17 ｜ Research Prototype: Technology Hardware ｜ Stance: Cautiously Bullish (cautious_bull) ｜ Time Horizon: 12-24 months

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I1 Industry Definition and Boundaries

Research Subject: Edge SoC (System-on-Chip), i.e., the main control system-level chip for edge terminal devices. This report focuses on the value chain under the consumer on-device AI theme: upstream wafer foundry (TSMC/SMIC/Hua Hong/UMC) + IP (Arm/VeriSilicon), midstream Fabless design companies (Qualcomm/MediaTek + domestic Bestechnic/Espressif/Rockchip/Amlogic/Bluetrum/Actions Technology/Allwinner/SigmaStar, etc.), downstream terminal brands (Apple/Xiaomi/Samsung/ByteDance/Meta).

Coverage Segments (by terminal application): TWS/OWS earphones, AI glasses, AI toys/education hardware, smart speakers/smart screens, smart home (smart locks/control panels/gateways), service robots/embodied intelligence, IPC security, intelligent cockpits, set-top boxes/TVs — nine major tracks. Among these, intelligent cockpit SoC is currently the largest segment (~$7.69 billion in 2024, accounting for ~54% of the total), while consumer edge (excluding cockpits) is ~$6.46 billion.

Key Definitional Notes: Edge SoC is a Fabless design industry with no futures market; price discovery follows a dual-track of "product ASP (contract price/tender price) + wafer foundry pricing (cost side)." This report does not apply commodity supply-demand balance sheets or term structure templates.

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I2 Demand: Structural Inflection Point Quantified, but Some Value Propositions Overstated

2.1 Total Market: ~$14.15 billion in 2024 → ~$19.8 billion by 2028E (CAGR ~8.8%)

Based on bottom-up estimates across the nine tracks (shipments × SoC content per unit × ASP), the total edge SoC market is ~$14.15 billion in 2024 and ~$19.8 billion by 2028E, CAGR ~8.8% (revised down from 9.1% after red-team review). Consumer edge (excluding cockpits) grows from $6.46 billion to ~$9.06 billion (CAGR ~8.8%), while intelligent cockpits grow from $7.69 billion to ~$10.74 billion (CAGR ~8.7%, BusinessResearchInsights).

Important Note (Source Classification): The above totals are bottom-up aggregations, where sub-segments such as AI toys (QYResearch), IPC (GlobalInfoResearch), and intelligent cockpits (BusinessResearchInsights) are anchored to aggregator-site figures, for directional reference only; independently verifiable primary anchors include — TWS (Canalys Q1'25: ~78 million units globally, +18%), AI glasses finished devices (EssilorLuxottica disclosed Meta sold 7 million units in 2025), smart speakers/smart home (IDC), cockpits (Gasgoo/Zozi Research on Qualcomm share).

2.2 Demand Bridge (2024→2028E, Net Increase +$5.66 billion)

Bottom-up incremental drivers (in $100 million), with sub-items reconciling to the net increase (verified):

Item-by-Item Analysis (Key Segments):

• Intelligent Cockpit +$3.05 billion (largest increment): Software-defined vehicles + large displays + cockpit-driving integration push ASPs higher (Qualcomm 8295 at the $100 level, the highest ASP point in the industry). In 2025, Qualcomm cockpit-driving domain control chips were installed in ~7.18 million vehicles in China, accounting for 72.7% (Gasgoo); domestic localization rate is ~18% and rapidly rising. This is the largest stable base with both volume and price stability.
• AI Toys +$1.095 billion: Upgrading from connectivity MCUs to AI-WiFi SoCs (integrated NPU/on-device small models), ASP rises from ~$1.0 to ~$2.2. Global AI toy WiFi MCU SoC 2024 production reached 922 million units with a market of $1.585 billion (QYResearch, aggregator site pending verification). JD.com AI toy sales grew +200% YoY in H1 2025.
• TWS/OWS +$790 million: Each pair of TWS contains 2 Bluetooth audio SoCs (one per earbud), ASP ~$1.8; AI upgrades (Bestechnic BES2800/Bluetooth 5.4/LE Audio/on-device ANC) push ASP toward $2.3+; OWS is a structural increment (3Q25 quarterly volume exceeded 10 million pairs, +69%; Omdia forecasts 40 million pairs by 2026, ~10% of TWS).
• AI Glasses +$150 million (after red-team downward revision): This is the largest correction in this report. The original estimate of $420 million for AI glasses SoC in 2028 implied a blended ASP of ~$28/unit; the red team noted — in 2026, audio-only models are expected to account for ~91% of AI glasses (SAG); audio models use Bestechnic BES2700 (~$7) or low-cost Allwinner SoCs, while the flagship Qualcomm AR1 (~$55) has its share locked; combined with Xiaomi AI glasses return rates of ~40% and industry averages of 40-50%, "shipments" far from represent retained users. Accordingly, the 2028 AI glasses SoC market is revised down to ~$240 million (15 million units × blended ASP ~$16/unit), with the increment revised from +$331 million to +$150 million. AI glasses remain the fastest-growing track (Counterpoint forecasts CAGR >60% for 2024-29), but SoC value is systematically diluted by "rising audio-model share + domestic price pressure" — an early-stage theme where "the inflection point direction holds, but value is revised down."
• Robotics +$18 million (after revision): The original estimate relied on 275,000 units in 2028 (SAG including quadruped, 73% CAGR), but this is a supply-side production target rather than demand-side validation — IDC data shows global humanoid robot shipments of only ~18,000 units in 2025; UBTech delivered only 1,079 units in 2025, with 2026 guidance of 2,000-3,000 units. Moreover, robot main compute is largely handled by independent chips such as NVIDIA Thor, with edge SoCs representing a minimal share of robot BOM value. Revised down to ~50,000 units in 2028, increment +$18 million, not treated as quantitative evidence of a structural inflection point.
• Set-Top Boxes -$84 million (negative item): Structural decline (pay TV migrating to smart TVs/OTT); ABI Research forecasts STB volumes stabilizing at 194 million units flat for 2025-2028; S&P forecasts streaming media devices declining annually. Amlogic holds the #1 global STB SoC share at 31.5%, offsetting volume declines through premiumization (6nm unit price RMB 35-40).

2.3 Structural vs. Cyclical: Real Inflection Points Coexist with Inventory Illusions

True structural inflection points (~80% of total increment): AI glasses, AI toys, OWS/AI earphones, robotics, intelligent cockpit NPU upgrades, AI cameras — driven by "on-device AI small model deployment + new form-factor terminal proliferation," in the early stages of the S-curve (AI glasses ~0.15%→1.5%, OWS at 10% of TWS in 2026, AI toys at ~25% of China's toy market).

Inventory cycle illusions (~20%): ① Semiconductor inventory cycle — 2022-23 destocking → 2024-25 restocking; part of the 2025 "on-device AI boom" was actually channel replenishment; ② China subsidies + tariff front-running — Bestechnic saw strong H1 2025 but weak H2 due to "subsidy phase-out + memory price increases," representing policy-driven pulled-forward consumption. The biggest risk for 2026 is destocking backlash in consumer segments (TWS/AI speakers) (see I4).

Inflection Point Language Discipline: For AI glasses/robotics, the "structural inflection point" has gaps in the quantitative chain (audio-model share, return rates, supply-side forecasts); the text has downgraded these from "quantified inflection points" to "inflection direction holds, value revised down"; the quantitative chains for TWS/AI toys/cockpits are relatively complete and can maintain "structural volume growth" language.

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I3 Supply: Delivery Capability — Process Node Migration and Capacity Access

3.1 Process Node Generational Migration (the "Delivery" Main Line for Fabless)

Edge SoCs are undergoing 28/22nm → 12nm → 6nm generational migration; domestic leaders have entered 6nm-class nodes, on par with Qualcomm's previous generation (but not the same performance tier):

• Bestechnic: BES2700 (12nm FinFET, 2023) → BES2800 (6nm, NPU compute 4x previous generation, mass production 2024) → BES6000 (H1 2026 sampling);
• Amlogic: S905X5 (6nm, NPU 32 TOPS, mass production H2 2024); 6nm shipments of nearly 9 million units in 2025, 2026 target exceeding 30 million;
• Rockchip: RK3568 (22nm/1 TOPS) → RK3576 (8nm/6 TOPS) → RK3588 (8nm/6 TOPS) → RK3688 (8nm/32 TOPS, mass production 2026);
• Qualcomm: AR1 Gen1 (2023) → Snapdragon X (4nm/45 TOPS) → X2 Elite (3nm/80 TOPS, 2026).

Key Assessment: Domestic leaders (Bestechnic/Amlogic/Rockchip) have caught up to Qualcomm's previous generation at 6nm-class nodes, but Qualcomm's X2 has opened a one-generation gap with 3nm/80 TOPS; domestic 7nm-class is constrained by export controls, relying solely on SMIC N+1/N+2 (equivalent 7nm, yield only breaking 40% in 2026) — the primary bottleneck in generational catch-up.

3.2 Wafer Foundry Capacity and Utilization (Cost Side)

Mature nodes (22/28/12nm) are the mainstream for edge SoCs, with utilization rising across the board in 2026:

• Global top-10 foundry 8-inch utilization ~90% (vs. ~80% in 2025); Hua Hong above 100% fully loaded, SMIC 93.5%+ (12-inch near full), UMC 85%;
• 2026 enters a price increase cycle: UMC 8-inch +10-15%, 12-inch +5-10%; Nexchip all-series +10%; SMIC/Hua Hong selective increases of ~10%;
• However, capacity remains ample (mainland China's 28nm capacity will account for 36% of global capacity in 2026, with new mature capacity accounting for 77% of global additions); price increases reflect "capacity tightness + cost pass-through" rather than genuine shortage (TrendForce forecasts mature-node ASP continuing to rise 5-10% through 2026, moderating after H1 2027).

Advanced nodes (7/6nm and below) are the true bottleneck: Under US BIS export controls (January 2025 whitelist rules), TSMC has suspended shipments of 16/14nm and below to Chinese design companies not on the whitelist; SMIC N+1/N+2 monthly capacity is only ~70,000 wafers, with yield only breaking 40% in 2026 — limiting supply elasticity for high-end edge SoCs.

3.3 Supply Constraints and Delivery Cadence

• Not a bottleneck: Advanced packaging (CoWoS/2.5D) — edge SoCs predominantly use monolithic FCCSP/FCBGA packaging, unaffected by CoWoS tightness;
• A bottleneck: Advanced process access (export controls) — determines the performance ceiling for domestic high-end edge AI SoCs;
• Delivery cadence: Fabless new products typically take 18-36 months from tape-out to mass production (Bestechnic BES2800 taped out 2023, mass production 2024), meaning products ramping in 2026-27 were already finalized in 2024-25, giving high supply delivery certainty.

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I4 Supply-Demand Tightness and Price Cycle (Supporting Chapter)

4.1 Mature Nodes: 2026 Tight Balance → 2027 Loosening

In 2026, mature-node utilization rises to ~90%, entering a price increase cycle (cost-side pressure, but reflecting strong demand); in 2027, mainland China's new mature capacity comes online in concentration (77% of global additions), with capacity growth outpacing demand growth (8.8%), potentially pulling utilization down slightly to 85% and moderating price increases. This is the most important supply-loosening risk for H2 2026-2027.

4.2 Inventory Cycle: Mid-to-Late Restocking → Divergent Destocking

Current semiconductor inventory cycle position: 2022-23 active destocking → 2024-25 restocking → H1 2026 entering "mid-to-late restocking → divergent destocking." Evidence:

• Bestechnic (consumer wearables bellwether): 2026Q1 revenue -32.7% (high base + subsidy phase-out + memory price increases); inventory of RMB 892 million (+29% vs. RMB 691 million in 2025Q1); inventory turnover days passively extended from ~63 days to ~122 days — consumer segment has entered destocking;
• Amlogic: 2026Q1 revenue +23.9% hitting a record high, but inventory of RMB 2.973 billion (+17.6%) and operating cash flow turning negative at -RMB 481 million — active memory stockpiling (front-running inventory ahead of price increases), representing "active restocking under supply tightness"; cash flow deterioration is a risk signal;
• Rockchip (+36.2%)/Allwinner (+47%)/SigmaStar (+49%): AIoT/security still growing strongly with healthy inventory.

Conclusion: Edge SoCs are at the starting point of divergent destocking, with "active restocking in AIoT/AI new form factors + passive inventory accumulation in consumer wearables" coexisting; the biggest risk for H2 2026-2027 is consumer destocking backlash spreading to AIoT/security.

4.3 Valuation Cycle Position (Benchmark Anchor)

SW Semiconductor Index (L2, 801081.SI) as of 2026-08-14: PE(TTM) 123.96 (92nd percentile), PB 9.51 (97th percentile since 2014). The industry is in an historically extremely expensive zone, with pricing already fully reflecting on-device AI/domestic substitution expectations — this is the most important benchmark constraint for the I8 conclusions.

4.4 Baseline ASP Path (12 months)

Pricing Framework = four forces combined: demand CAGR 8.8% structural volume growth (ASP up) + domestic substitution price pressure (ASP down) + foundry price increase pass-through (cost up) + inventory cycle position (consumer destocking/AIoT restocking); overall ASP rises moderately but diverges by track.

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I5 Competitive Landscape and Pricing Power (Headline Chapter)

5.1 Concentration by Track

TWS Bluetooth Audio SoC (domestic players dominant, CR5 ≈ 100%):

• AI Glasses SoC: Qualcomm AR1 de facto monopoly (Ray-Ban Meta accounted for 95.7% of global AI glasses sales in 2024, all using AR1); domestic players enter via Bestechnic co-processors (BES2700 ~$7)/Allwinner/SigmaStar at the low end; single-chip solutions (Bestechnic BES6100/SigmaStar second-gen) only reach volume production in 2026-27;
• Intelligent Cockpit SoC: Qualcomm 74.4% (2025 Zozi Research; 59.2% in 2023 → 70% in 2024 → 74.4% in 2025, share rising rather than falling); domestic localization ~18%, breaking through in mid-to-low price segments (Rockchip RK3588M +533% YoY; HiSilicon at 17.8% in the RMB 350K+ price band);
• WiFi MCU: Espressif ranked #1 globally in shipments for 6 consecutive years (TSR), leading the 2019 CR3 ≈ 68%;
• IPC Security SoC: SigmaStar + Fullhan combined >60% in domestic professional security; SigmaStar #1 globally in vision AI SoC with 26.7% share.

5.2 Barriers and Profit Pools: Where Profits Reside Now, Where They Migrate Next

Profits currently reside at both ends: ① SoC design companies with high-end positioning + ecosystems — Espressif (open-source ESP-IDF ecosystem + #1 global WiFi MCU), Actions Technology (high-margin audio), Rockchip (AIoT platform), Qualcomm (AI glasses/cockpit monopoly), with gross margins of 40-55%+; ② Advanced-node wafer foundries (TSMC, 55%+ gross margin). White-label low-end players (Bluetrum 22% gross margin, Allwinner 33%, SigmaStar 34%) earn only thin margins.

Eight A-share edge SoC design companies' 2025 non-GAAP net profit totals ~RMB 3.66 billion, with significant gross margin divergence: Actions 51.2% > Espressif 46.6% > Rockchip 41.9% > Bestechnic 38.7% > Amlogic 38.0% > SigmaStar 34.2% > Allwinner 32.9% > Bluetrum 22.2%.

Profit migration direction over the next 2-3 years: From legacy consumer SoCs (TWS/STB/TV) toward AI glasses single-chip, robot vision, and intelligent cockpit domestic substitution. Winners: domestic design leaders with single-chip integration capability + ecosystems (Bestechnic BES6100, SigmaStar vision platform, Rockchip RK3588 platform); Losers: undifferentiated white-label players and pure co-processor roles.

But must be acknowledged (after red-team reinforcement): Upstream, TSMC mature nodes (28/22/12nm) face oversupply with price declines, directly boosting design companies' gross margins; downstream, concentrated procurement by Apple/Xiaomi/ByteDance/Meta gives them strong bargaining power (Xiaomi has already squeezed Qualcomm's AR1 from $60 to $44), with concentrated procurement crushing chipmakers' ASP gains — high-end ASPs can move up (AI glasses/cockpits), while mid-to-low-end ASPs are systematically compressed by domestic substitution chips ($12-18 vs. Qualcomm's $55).

5.3 Upstream/Downstream Bargaining Power and ASP Trends

• Upstream foundry: Bargaining power strengthening for mature nodes (TSMC mature capacity oversupply, price declines benefit gross margins); still constrained by TSMC allocation for advanced nodes (6/4nm);
• Downstream brands: Clearly dominant — Apple/Xiaomi/ByteDance/Meta concentrated procurement drives prices down; white-label markets have dispersed customers but brutal price wars;
• Overall ASP trend: High-end moving up (AI glasses/cockpits) + mid-to-low-end compressed by domestic substitution and concentrated procurement, flattening at the center. Design companies protect gross margins through "volume-for-price trade-offs + rising high-end mix."

5.4 Domestic Substitution Progress: From "Mature Coverage" to "Mid-to-Low-End Penetration" (Phase 2, but High-End Is an Option)

• Mature tracks already highly localized: TWS/smart speakers/AIoT/IPC/STB are essentially domestic-led (TWS chips: Jieli + Bluetrum + Bestechnic combined 75%+; security vision SoCs: SigmaStar + Fullhan top-2 globally; STB: Amlogic #1 globally);
• High-end tracks just breaking through, concentrated in mid-to-low end: AI glasses SoC monopolized by Qualcomm (domestic single-chip solutions only in volume production 2026-27; flagship main control remains Qualcomm AR1); intelligent cockpit localization at 18% (Rockchip/SiEngine/HiSilicon breaking through below RMB 350K; Qualcomm's flagship share rising rather than falling).

Key Correction (Red Team R3): Domestic substitution is currently concentrated in mid-to-low-end/co-processor/audio segments, without yet challenging Qualcomm's pricing power and profit pool in glasses main control and cockpit flagships. The earnings elasticity of "domestic players cutting into Qualcomm's high-end profit pool" is a 2027-28 option, not a 2026 reality. This correction directly weakens the valuation premium support for "high-end substitution" names such as Bestechnic and SigmaStar.

5.5 Key Player Profiles

5.6 Industry Valuation Position (Cross-Check with Table)

Shenwan Semiconductor Index (801081.SI): PE(TTM) 123.96 (92nd percentile), PB 9.51 (97th percentile, since 2014). The on-device SoC industry sits at historically extreme valuation levels overall; the cycle conclusion must be cross-checked against valuation—"cycle upturn × 90th percentile valuation" implies thin margin of safety. Accordingly, I8 conclusion is adjusted to "select leaders, control position sizing" rather than broad sector allocation.

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I6 Policy · Geopolitics · ESG

Net Direction: Bullish (Structural Tailwind), but access to advanced process nodes remains a persistent headwind.

• Domestic Substitution Policy (Tailwind): Big Fund Phase III registered capital RMB 344 billion (established May 2024, exceeding the total of the first three phases, focused on equipment/materials/advanced nodes); the "15th Five-Year Plan" places "high-level technological self-reliance" in a leading position; the Xinchuang core procurement catalog (2026 No. 1) prioritizes domestic products;
• Demand-Side Subsidies (Tailwind): 2026 national subsidies include smart glasses for the first time (15% of selling price, capped at RMB 500 per unit), initial batch RMB 62.5 billion; local programs in Shenzhen Bao'an and elsewhere support AI glasses chip production lines;
• Export Controls (Headwind): US BIS Entity List + "Footnote 5" fabs + equipment controls for 14/16nm and below + TSMC/Samsung ban on 7nm and below AI/GPU chips for China. 22/28nm mature nodes are outside core control scope and relatively safe to access; 12nm and FinFET nodes sit in the gray zone at the "advanced/mature divide"—if restrictions escalate, domestic mid-to-high-end on-device SoCs would be affected;
• Tariffs (Medium-Term Headwind): USTR plans to impose Section 301 tariffs on Chinese chips at 28nm and above mature nodes starting 2027-06 (first phase 0%); if implemented, would raise imported chip costs and strengthen domestic substitution momentum;
• ESG: On-device SoC is a fabless design business, not directly subject to CBAM/energy consumption caps; the "green computing" narrative favors low-power on-device AI (replacing high-energy cloud inference), but no major near-term supply-demand impact.

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I7 Core Debates and Scenarios

7.1 Three Decisive Factors

D1 (Authenticity of Demand Inflection): Are AI glasses/AI toys/robotics a genuine structural inflection, or a novelty cycle + channel restocking pull-forward?

• Bull case: AI glasses—Meta sold 7 million units standalone in 2025 (EssilorLuxottica), Counterpoint forecasts 2024-29 CAGR >60%, early S-curve penetration; AI toys account for 25% of China's toy market with JD.com sales +200%.
• Bear case: AI glasses 40-50% return rate, 91% are low-value audio-only models (SoC ASP diluted to $16); robotics 275K units is a supply-side target (2025 actual only 18K units).
• Tracking indicators: AI glasses quarterly shipment MoM, return rates, domestic SoC blended ASP, HengXuan/Allwinner AI glasses chip shipment mix.

D2 (Whether Consumer-Side Inventory Correction Spreads): Is HengXuan's 2026Q1 revenue -32.7% a one-off impact from "high base + subsidy phase-out," or the start of a destocking backlash?

• Bull case: Inventory divergence—AIoT/security (Rockchip/Allwinner/SigmaStar) still growing strongly, AI new form factors actively restocking; HengXuan is just a wearables single point.
• Bear case: HengXuan inventory turnover 63→122 days + Amlogic cash flow turning negative at -RMB 481M are warning signs; 2027 mature node capacity 77% from mainland concentrated overcapacity, price hikes ending.
• Tracking indicators: Whether HengXuan 2026Q2 revenue stabilizes, Amlogic cash flow, whether mature node utilization falls below 85%.

D3 (Whether Valuation Can Be Digested by Earnings Delivery): Can the historically expensive Shenwan Semiconductor PE 92nd percentile/PB 97th percentile be digested by leader earnings?

• Bull case: Rockchip 2025 net profit +75%, SigmaStar 2026Q1 net profit +330%, AIoT/security earnings growing strongly.
• Bear case: Sector PE 123x/PB 9.5x has fully priced in on-device AI expectations; once destocking spreads or AI glasses disappoint, Davis double-kill; HengXuan revenue -32.7% already shows valuation peak coinciding with deteriorating earnings quality.
• Tracking indicators: Quarterly earnings delivery vs. valuation percentile, whether leader gross margins break below 35% (proving no pricing power at the high end).

7.2 Three Scenarios

7.3 Catalyst Calendar (Next 12 Months)

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I8 Investment Implications and Beneficiary Stocks

8.1 Decision Matrix: Cycle Direction × Business Quality

Core conclusion upfront: This is an industry with "upward cycle but highly divergent returns"—the cycle direction (on-device AI demand + domestic substitution) is indeed upward, but business quality stratification is extreme. Bullish cycle ≠ broadly investable: Ecosystem and high-end positioning leaders earn real money; white-label and price-war segments grow revenue without profit.

Exposing the value trap logic: The three names in the lower-right quadrant (cycle upturn, poor business quality)—SigmaStar Technology (global vision SoC leader but 79% customer concentration, gross margin down from 36% to 34%, TTM PE over 110x, revenue without profit), Bluetrum Technology (white-label TWS volume king but gross margin only 22%, non-GAAP net profit only RMB 233M, poor real returns), Allwinner Technology (low-end white-label competing on cost)—they benefit from industry tailwinds but cannot convert them into profits, the classic "boom-cycle illusion." Avoiding these three is the most important negative call in this report.

8.2 Beneficiary/Avoid Stocks

Preferred:

• Espressif Systems (688018)—Ecosystem-driven global leader, WiFi MCU #1 globally for 6 consecutive years, ESP-IDF open-source community moat is deep, gross margin 46.6%→49.3%, highest return quality, structurally benefits from IoT/on-device AI expansion, the most stable beneficiary;
• Rockchip (603893)—Platform leader with AIoT + robotics + cockpit three-pronged ramp, 2025 net profit +75%, ROE 26%, most solid earnings delivery, certain beneficiary;
• Actions Technology (688049)—High-margin (51%) mid-to-high-end audio SoC, small but high quality, avoids white-label price wars, AI glasses/smartwatch second growth curve, superior return quality;
• HengXuan Technology (688608)—Domestic pioneer in AI glasses single-chip (BES6100), optimal positioning but near-term earnings volatility, a "high-end substitution option" stock, suitable for buying on dips rather than chasing highs.

Avoid:

• Bluetrum Technology (688332)—White-label volume king, revenue-without-profit value trap;
• Allwinner Technology (300458)—Low-end white-label thin margins, mediocre long-term returns;
• SigmaStar Technology (301536)—110x valuation + margin decline + customer concentration, high boom-cycle illusion risk.

8.3 Scenario × Stocks

8.4 Key Risks

1. Valuation Risk (Primary): Shenwan Semiconductor PE 92nd percentile/PB 97th percentile, historically expensive; any earnings falsification triggers Davis double-kill;
2. Inventory Risk: Consumer-side (TWS/AI speakers) destocking backlash spreads to AIoT/security, compounded by 2027 mature node capacity overhang;
3. High-End Substitution Falsification Risk: Flagship AI glasses main controllers/cockpit flagships remain locked by Qualcomm; if domestic single-chip solutions (HengXuan BES6100) miss volume production expectations, the high-end profit pool capture fails;
4. Price War Risk: Downstream Apple/Xiaomi/ByteDance/Meta concentrated procurement + white-label competition, ASP center of gravity shifts down, eating into the volume dividend from domestic substitution;
5. Policy Risk: US export controls escalate to 12nm/14nm mature node equipment, constraining domestic mid-to-high-end on-device SoC capacity expansion.

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This report is industry research and does not constitute individual stock investment advice. On-device SoC is a high-valuation, high-volatility technology hardware industry where the cycle direction and return quality axes diverge significantly. When positioning, "return quality" must be the guiding principle—beware of mistaking cycle narratives for certainty growth.