Produced by | Pioneering Entrepreneurship

Art Editor | Xing Jing

Reviewed by | Song Wen

On September 22, Amlogic (Shanghai) Semiconductor Co., Ltd. (hereinafter referred to as 'Amlogic') updated its prospectus in a bid to gain access to the Hong Kong Stock Exchange.

The company initially submitted its application to the Hong Kong Stock Exchange on September 25, 2025. However, the prospectus automatically became invalid due to the expiration of its six-month validity period. On April 12, 2026, the company resubmitted its application and continued its push for a listing on the Hong Kong Stock Exchange.

Amlogic holds significant influence in the industry. It is the global market leader in set-top box SoCs, and its revenue in the first half of 2026 surged by 31.86% year-on-year. If successfully listed on the Hong Kong Stock Exchange, the company will complete its 'A+H' dual-listing platform strategy.

However, with policy changes, set-top boxes are on the brink of being phased out, and the primary revenue-generating segment, which accounts for 70% of its income, may undergo significant transformation.

Additionally, to hedge against rising memory prices, the company has made substantial advance stockpiles, putting its operating cash flow under pressure. More concerningly, according to incomplete statistics, since 2023, its controlling shareholder has cumulatively reduced its stake and cashed out nearly 3 billion yuan.

Amlogic still faces numerous questions that need to be addressed if it aims to list in Hong Kong.

1. Set-Top Boxes 'Phase Out', Core Business Faces Challenges

Amlogic is a system-on-a-chip (SoC) design company that does not operate its own wafer fabrication plant. Instead, it focuses solely on the research, development, and sales of integrated circuit designs.

The SoC integrates the CPU, GPU, NPU, ISP, video codec, audio DSP, memory controller, security module, and high-speed interfaces onto a single silicon chip, enabling a single chip to both 'run the system' and 'understand AI, images, connectivity, and power consumption'.

Similar to AI-enabled phones, smart glasses, in-vehicle cockpits, and robotic vacuums, nearly every type of electronic device is undergoing an upgrade of its main control chip from 'basic functionality' to 'comprehensive control'. Amlogic specializes in selling this type of chip.

According to the prospectus, as of the end of 2025, the company's cumulative chip shipments have exceeded 1 billion units, with its business spanning over 100 countries and regions worldwide, serving more than 270 mainstream telecommunications operators and leading terminal brands such as Hisense, TCL, Skyworth, and Xiaomi.

Based on 2024 revenue, the company ranks first in mainland China and second globally (17.7%) in the home smart terminal SoC market, trailing only the global leader MediaTek (39.5%).

It demonstrates even greater dominance in specific segments, ranking first globally in smart set-top box SoCs (31.5%), with one out of every three smart set-top boxes worldwide equipped with its chips in 2024, and second globally in smart TV SoCs (16.8%), with one out of every five smart TVs featuring its chips.

(Image / Prospectus)

Currently, the company divides its products into four major segments: smart multimedia and display SoCs, AIoT SoCs, communication and connectivity chips, and smart car SoCs. Among them, 6nm AI chips, robots, and in-vehicle applications represent the 'new growth stories' the company is pursuing.

However, in terms of revenue contribution, smart multimedia and display SoCs (set-top boxes, TVs, and audio-video terminals) accounted for 72.9% of revenue in 2025, AIoT SoCs for 24.2%, communication and connectivity chips for 2.9%, and smart car SoCs for less than 0.1%.

In other words, set-top boxes and TVs remain the primary drivers of the company's performance.

(Image / Prospectus)

However, the sector where Amlogic's main revenue engine operates is facing a critical turning point shaped by policy changes.

On September 17, He Biao, Deputy Director of the National Radio and Television Administration, announced at a press conference that this year, the National Radio and Television Administration, in collaboration with the Ministry of Industry and Information Technology, has formulated an integrated TV technical standard. This standard will integrate set-top box functions into TVs in software form, creating a streamlined terminal. With a single TV, users can access all types of TV services, including live broadcasting and on-demand viewing. Equipped with a universal remote control, users can easily turn the TV on and off and change channels.

In fact, this standard (GY/T428—2026) was released and implemented on June 15. It adopts a technical model of 'dedicated network TV service application software + adapter + universal remote control', with the adapter connected to the TV via a USB interface. According to the plan, China Broadcasting Network, China Telecom, China Mobile, and China Unicom will promote tens of millions of integrated TVs nationwide this year.

Faced with the 'phase-out' of set-top boxes, some investors raised three key questions at Amlogic's recent investor exchange meeting: whether the company participates in the centralized procurement of integrated TV adapters and the progress made, how much the integration of external set-top box functions into TVs will impact the company's revenue sources, and what proportions of the company's revenue come from domestic and international set-top box businesses in the first half of the year.

Amlogic responded that the integration of set-top box functions into TVs is not a completely new trend but rather a continuation of the long-term industrial evolution where smart TVs and adapters replace external set-top boxes. The company's TV SoC products are deeply compatible with the global mainstream smart TV ecosystem, and relevant products and customer layouts were largely in place before this change. Therefore, this change will have minimal impact on the company's existing business, and the company will continue to monitor centralized procurement rules and technical specifications.

However, the company did not directly address the question regarding 'the proportion of domestic and international set-top box revenue'. 'Pioneering Entrepreneurship' sent an interview request to further understand but received no response as of press time.

Looking back at history, Amlogic has consistently adapted to industry updates. Old standard-definition boxes have been phased out, replaced by 4K and 8K ultra-high-definition boxes and high-end TV chips. However, after the widespread adoption of integrated TVs, whether there will be further impacts on the company's product unit prices, sales volumes, and channels remains to be seen.

2. Rising Memory Chip Prices, Advance Stockpiling Puts Pressure on Operating Cash Flow

Policies represent long-term variables for the industry. Currently, Amlogic's performance is still growing, but its net operating cash flow has already shifted from positive to negative.

From 2023 to 2025 (hereinafter referred to as the reporting period), the company's operating revenue was 5.371 billion yuan, 5.926 billion yuan, and 6.793 billion yuan, respectively, with an average annual compound growth rate of approximately 12.5%. Its net profit attributable to shareholders was 498 million yuan, 822 million yuan, and 873 million yuan, respectively, with a year-on-year increase of 6.21% in 2025, significantly slower than the over 60% growth in 2024.

In the first half of 2026, its revenue was 4.391 billion yuan, a year-on-year increase of 31.86%, and its net profit attributable to shareholders was 611 million yuan, a year-on-year increase of 23%.

(Image / Company Financial Report)

The company attributes its performance growth to the increased market share of TV SoCs and the accelerated introduction of high-end products to leading terminal customers. While the company's performance itself is robust, its operating cash flow has not seen a corresponding boost.

During the reporting period, Amlogic's net operating cash flow was 948 million yuan, 1.042 billion yuan, and -230 million yuan, respectively, with a year-on-year decrease of 122.05% in 2025, directly shifting from positive to negative.

The company explained that the negative operating cash flow was primarily due to its proactive stockpiling of memory chips, resulting in an increase in prepayments of 365 million yuan, mainly to cope with rising memory chip prices and tight supply.

As of the end of 2025, the company's inventory reached 2.528 billion yuan, an increase of nearly 80% from 1.410 billion yuan at the end of 2024. The inventory turnover days increased from 155.9 days in 2024 to 189.5 days in 2025.

By mid-2026, inventory further climbed. As of June 30, 2026, the company's ending inventory book value was 3.539 billion yuan, a significant increase of 39.99% from 2.528 billion yuan at the beginning of the year and an increase of 19.03% from 2.973 billion yuan at the end of the first quarter, showing a continuous upward trend.

By the end of mid-2026, inventory accounted for 36.90% of total assets and 44.21% of net assets, becoming the largest portion of the asset side.

With a substantial amount of stockpiling, the company's net operating cash outflow in the first half of 2026 was 502 million yuan, exceeding the net outflow for the entire year of 2025 (230 million yuan).

For smart device SoCs, raw material costs typically account for 65% to 80% of the total cost, with processing fees accounting for 15% to 25%. Amlogic's inventory mainly includes raw materials (untested wafers and memory modules), work-in-progress (chips in packaging and testing), finished goods, and goods in transit.

In the first half of 2026, the raw material inventory balance increased from 817 million yuan at the beginning of 2026 to 1.697 billion yuan, with the largest increase primarily in wafers and memory.

(Image / 2026 Semi-Annual Report)

It is worth mentioning that contract liabilities have not kept pace with inventory. As of the end of mid-2026, the company's contract liabilities were 102 million yuan, a decrease of 15.64% from the end of 2025.

Contract liabilities represent downstream advance payments and indicate the order enthusiasm on the demand side. The fact that this indicator has decreased instead of increased suggests that this batch of inventory is more akin to 'supply-driven' stockpiling rather than 'demand-driven' order acquisition.

In other words, the company is betting on continued price increases in memory and sustained tight wafer capacity. If prices continue to rise, these inventories will represent low-cost raw materials; otherwise, high provisions for inventory write-downs will need to be made.

As for whether the stockpiling can align with market changes, only time will tell.

3. Risks of Related-Party Transactions, Controlling Shareholder Cashes Out a Large Amount Before IPO

For Amlogic, both the upstream and downstream of an SoC are dominated by a few companies.

In 2025, the company's top five customers contributed 4.334 billion yuan in revenue, accounting for 63.8% of total revenue, with the largest customer contributing about 1.545 billion yuan, accounting for 22.7%. The customer concentration is relatively high.

(Image / Prospectus)

The supplier side is even more concentrated. In 2025, the top five suppliers accounted for 79.8% of procurement, with the largest global wafer foundry (headquartered in Taiwan, China) accounting for 41.6%. The two parties have been cooperating since 2016.

What is even more concerning to the outside world is the overlapping roles of shareholders and customers. For example, TCL King Electrical Appliances (Huizhou) Co., Ltd. (TCL Huizhou) currently holds about 4.86% of the company's shares and is also a core customer. Wang Cheng, a director of TCL Huizhou, also served as a director of Amlogic. The prospectus describes this as 'core customer shareholding achieving in-depth cooperation between Amlogic and its customers'.

(Image / Prospectus)

Although industrial synergy has a certain rationality, the fact that a party both holds shares in the company and is a core customer raises questions about whether the pricing of related-party sales is fair and requires continuous attention.

'Pioneering Entrepreneurship' noticed that there was a related-party transaction worth examining in detail in 2025.

The company purchased research and development services from its controlling shareholder, Amlogic Holdings Ltd., for 332 million yuan, compared to only 66.181 million yuan in 2024, a year-on-year increase of 402%.

(Image / Prospectus)

It is understood that the actual controllers behind Aml

Based on incomplete data, since 2023, Amlogic (Hong Kong) Limited, the controlling shareholder, has trimmed its stake five times, amassing a total of nearly 3 billion yuan in proceeds. The breakdown is as follows:

Two substantial block trades were executed in May and June 2023;

In July 2024, the company divested 12,479,100 shares at 54.01 yuan each through an inquiry-based transfer, netting approximately 674 million yuan;

Come February 2025, another 16,330,700 shares were sold at 72.71 yuan apiece via the same method, generating roughly 1.187 billion yuan;

And in January 2026, yet another 13.10 million shares (representing 3.11% of the total share capital) were transferred at 82.85 yuan per share through inquiry-based transfer, resulting in approximately 1.085 billion yuan in cash.

By mid-2026, Amlogic (Hong Kong) Limited's shareholding had dwindled to 18.77%.

(Image / Wencai, 10jqka.com.cn)

Amidst its pursuit of H-share financing, the company has also been capitalizing on high A-share prices to reduce its holdings. As of the market close on October 9, Amlogic's A-share price stood at 99.71 yuan per share, with a market capitalization hovering around 42.2 billion yuan. While this marks a high point in recent years, it still represents a more than 18% decline from the peak of 122.98 yuan per share reached in May of the same year.

However, as the era of set-top boxes fades into the background and new ventures are still in their nascent investment stages, Amlogic faces numerous unresolved questions.

*Note: The featured image in this article is sourced from Amlogic's official website.