Nio in talks to supply self-developed chips to Geely and Leapmotor, report says
Nio has announced a profit of over 1.2 billion yuan for the fourth quarter of 2025, marking its first profitable quarter after several consecutive quarters of multi-billion yuan losses. The financial turnaround comes after CEO William Li implemented a series of reforms to control costs and restructured high-investment business segments to improve the company’s financial position.
The company’s chip development unit, which had been one of Nio’s most capital-intensive operations, played a role in this transformation. Li previously estimated at a 2025 industry forum that the development cost of a single NX9031 chip was equivalent to building 1,000 battery swap stations.
Prior to its spinoff, Nio’s chip team was remarkably comprehensive, comprising over 600 employees covering front-end design, back-end design, and testing – nearly matching the configuration of a standard chip company.
Now, Nio is beginning to see returns on this investment. In mid-2025, Li directed various business units to seek external funding, with the chip division showing the most promising progress in external supply arrangements.
According to multiple industry sources quoted by 36kr, Nio’s chip division has successfully collaborated with Axera Semiconductor to develop the M97 chip, which has completed tape-out. Both companies are now actively engaging with automakers like Leapmotor and Geely.
In its Hong Kong IPO prospectus, Axera Semiconductor indicated plans to release this chip in the third quarter of this year. The M97 boasts computing power exceeding 700 TOPS, positioning it as a competitor to Horizon Robotics’ Journey J6P, which offers 560 TOPS according to official specifications.
Last year, after spinning off its chip business into an independent subsidiary – Shenji Technology – Nio formed a joint venture with Axera Semiconductor and OmniVision Technologies. The M97 chip will be supplied to other automakers through this joint venture.
Furthermore, sources reveal that Nio’s Sheji and Axera are also planning a lower-end chip, codenamed 9031e, which will compete with Horizon’s Journey J6M (128 TOPS).
The chip technology licensing has reportedly brought Nio several hundred million yuan in technology authorization fees, while the partnership with Axera for second and third-generation chips has helped Nio share the development costs. This strategic restructuring of the chip business has been crucial to Nio achieving its Q4 2025 profitability target.
Industry analysts quoted by 36kr note that China’s automotive market presents significant opportunities for domestic advanced driver-assistance system (ADAS) chips to replace international solutions. Many automakers currently rely on Nvidia hardware, with single Orin-X chips costing between 300-500 USD, while Thor chips can cost over 1,000 USD. As competition intensifies in the automotive sector, cost reduction becomes increasingly urgent, creating market opportunities for domestic chip developers like Horizon Robotics, Momenta, and automakers with self-developed chips.
However, the market window for automakers supplying chips externally may be limited. Horizon Robotics founder Yu Kai revealed in January that their Journey 7 series chips will be released simultaneously with Tesla’s next-generation AI5, with Horizon’s chief architect Su Qing participating in architecture design and product definition.
Additionally, U.S. restrictions on advanced semiconductor manufacturing processes pose challenges for automakers looking to supply chips externally. Competition from suppliers, process limitations, and automakers’ natural resistance to components from competitors all present obstacles to the external chip supply business.
