1、ab26 August 2025Global ResearchChina Automotive SemisAPAC Focus:Localising the intelligent futureChinas rise on AD semis is around the cornerWe think the rise of autonomous driving(AD)within Chinese OEMs(such as BYD)and the readiness for robotaxis may drive AD/ADAS SoC demand,a market worth US$7.3bn

2、 by 2029E(for major China OEMs),while overseas leaders remain dominant in mid/high-end AD SoC and other related semi products.Contrary to the markets sceptical view,we think multiple structural positives(maturity of technology,Chinas local sourcing)can enable domestic suppliers to capture more than

3、50%share of mid/high-end AD SoCs(ie 100+TOPS)in Chinese OEMs by 2029(3-5%in 2024).Due to its leading technology/market share position among domestic peers,hardware synergies and AI/software capability,we expect Horizon Robotics to be a core beneficiary,and we initiate coverage at Buy(we think the ma

4、rket does not fully appreciate its strong growth potential).Rapid growth market;accelerating domestic substitution just the startWith more intelligent auto work as a secular driver,we expect major Chinese OEMs AD/ADAS SoC market(ie,the computer chip)to deliver a 56%revenue CAGR over 2024-29 to reach

5、 US$7.3bn by 2029.For the mid/high-end market(100+Tera Operation Per Second TOPS)dominated by overseas firms but with a narrowing technology gap,SoC industry leaders and Chinese auto OEMs increasing push for local sourcingwe expect the combined market share of local companies to exceed 50%by 2029E.H

6、orizon key beneficiary of AD semis in ChinaDue to its leading position and technology advantage,we expect Horizons AD SoC unit shipments to grow by 37%in 2024-29 and capture 30-35%market share within Chinese OEMs.We initiate coverage of Horizon Robotics with price target of HKD10.50(implying 35%upsi