Chinese search giant Baidu has confirmed that its chipmaking arm will continue as an independent company – Kunlun Chip (Beijing) Technology Company. The chief architect of Baidu chip, Ouyang Jian, will become the CEO of Kunlun Chip.

Baidu officially had announced it will spin off its semiconductor branch into an independent company, 36Kr reported on Friday. With the announcement, Ouyang said that “these are unprecedented opportunities for changes in computing and semiconductor technology.

Following China’s growing demand for computer chips and the government’s push for semiconductor autonomy, Baidu hopes to grab a slice of the market by commercialising its chipmaking branch.

“Data centres, smart cars, mobile phones and even PCs have unprecedented demand for smart computing. New scenarios emerge in an endless stream and new computing architectures are innovating vigorously,” Ouyang added.

In March, Baidu’s chip unit completed a fundraising round which valued the company at 13bn yuan ($2bn). The round was led by Chinese private equity firm CITIC Private Equity Funds Management. Other investors include IDG Capital and Legend Capital.

“Under such historical opportunities, Baidu has established a new company based on its accumulation in the field of computing chips in the past 10 years,” Ouyang said on Friday. “It will continue to increase its investment in innovation and build a leading company in the field of intelligent computing and semiconductors.”

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By GlobalData

The Kunlun chip is a general-purpose cloud AI chip independently developed by Baidu. It is designed for cloud and edge computing of deep learning and machine learning algorithms. The chips are currently mostly used on Baidu’s own smart electric vehicles (EV) and cloud computing.

Endeavours to commercialise its AI chip design capabilities had been in the pipeline for Baidu for some time, which explains its decision to establish Kunlun Chip as a standalone entity. The move also underlines China’s ongoing push to boost its domestic chipmaking capabilities.

The first-generation Kunlun chip was mass-produced in early 2020. The second-generation chip is set to start mass production in the second half of 2021. According to the company, the second-generation chip provides AI performance that is three times higher than the first-generation.

In 2019, Samsung and Baidu entered into a foundry cooperation to produce the Kunlun chip based on the Korean semiconductor leader’s 14 nanometre (nm) process and I-Cube TM package technology and Kunlun’s neural processor architecture for cloud, edge and AI.

A Baidu official told 36Kr that “in the future, Kunlun Chip will further increase its research and development in the field of artificial intelligence and continue to work closely with Baidu in AI business development and technological integration. At the same time, it will accelerate the pace of industrialisation in various areas and integrate high-performance computing, empowering more regions and more enterprises to achieve intelligent upgrades.”

Amid a global semiconductor shortage and mounting pressure from the US, China is determined to curtail its reliance on foreign powers for chips. In a national address earlier this month, Chinese President Xi Jinping emphasised that China’s scientific and technological independence should be seen as a “strategic goal for national development.”

Previously, China indicated that it aims to supply 75% of its semiconductor demands with domestically manufactured chips by 2025. By 2035, the country endeavours to be fully self-sufficient in the semiconductor market.

According to GlobalData’s thematic research, China recently carved out a $1.4tn state programme to support R&D in key enabling technologies.

Baidu on a roll

Recently, the Chinese search engine provider started making moves in the automotive industry. At the start of June, the company announced that it had established a joint venture with carmaker Geely named Jidu Automobile. Baidu will be in charge of developing the vehicle’s autonomous driving technology.

Last week, the company also announced that it was building a fleet of 1,000 autonomous taxis. As part of its Apollo Moon project, Baidu aims to roll the vehicles out over the next three years. The cars are said to be capable of level 4 autonomy, which indicates that no human interaction is required under normal circumstances. Level 5 refers to fully autonomous vehicles.