Roundtable Discussion: The Second Half of Domestic Substitution: Paths and Challenges from Single-Point Breakthroughs to Full-Value Chain Penetration | 36Kr Future Industry Conference 2025

On September 10th, the 2025 36Kr Industry Future Conference, hosted by 36Kr, grandly opened in Xiamen, China. This conference has joined hands with the "China International Fair for Investment and Trade" hosted by the Ministry of Commerce. With the core theme of "In the Era of Intensive Cultivation, the Tides Surge in the Land of Abundance", it has made every effort to create a high - standard, high - value, and high - influence industrial event that combines national vision, industrial depth, and market popularity.

The conference closely aligns with national strategic guidelines and the forefront of industrial development. It focuses on five core sectors: artificial intelligence, low - altitude economy, advanced manufacturing, new energy, and mass consumption. It brings together the top forces in the industry to discuss development paths and outline the future of the industry. During the two - day agenda, with the "industrial cooperation chain" as the logical main line, the conference focuses on the collaborative mechanism among the government, capital, and industry. It delves into how to break down barriers, integrate resources, and precisely address the pain points, bottlenecks, and constraints in industrial development.

36Kr organized a round - table dialogue on "Medical and Pharmaceutical Technological Innovation and Industrial Trends" at the Industry Future Conference. Zhao Cong, a partner of Longding Investment, Zhang Gaonan, a managing partner of Huaying Capital, Yang Yang, a managing partner of Shunchuang Industrial Investment, Tang Zujia, a managing partner of Hechuang Capital, and Liang Feng, a managing partner of Shengyu Investment, participated in the discussion.

The following is the content of the round - table dialogue, compiled and edited by 36Kr:

Zhao Cong: First of all, I would like to thank the organizer for the invitation. I am also honored to have this discussion with four very experienced guests. Let me introduce myself briefly. I'm Zhao Cong from Longding Investment. Longding Investment is an investment institution that has long been deeply involved in the entire semiconductor industry chain and has gradually extended to the fields of new energy, automotive electronics, and industrial software. The core approach of our institution is to focus on the industry. At the same time, we pay great attention to industrial synergy. So, most of our investment targets and invested projects can form in - depth synergy. Additionally, it has recently been announced that our company is acquiring a listed company to further enhance the institution's ability to drive both industry and finance. Next, could you all please introduce yourselves and your relevant institutions?

Zhang Gaonan: Hello, everyone. I'm Zhang Gaonan from Huaying Capital. Huaying is an established VC institution since its establishment in 2008. We have gradually upgraded from digital content to consumption and then to technology. Currently, we are a relatively comprehensive fund. Our main directions include technology and consumption upgrading. In the past, our management scale was about 12 billion yuan. I am mainly engaged in technology - related investments.

Yang Yang: Hello, everyone. I'm Yang Yang from Shunchuang Industrial Investment. Shunchuang Industrial Investment is a wholly - owned state - owned enterprise in Shunyi District, Beijing. It was established in 2023, and its main investment direction is to implement the five leading industries in Shunyi District, namely new - energy intelligent vehicles, aerospace, medical and health, third - generation semiconductors, and intelligent equipment. Our main investment targets are concentrated in the fields of high - end intelligent equipment and high - end manufacturing. At the same time, there are certain requirements for projects to be implemented in Shunyi District. If there are relevant cooperation opportunities, I hope you can recommend them more. Thank you.

Tang Zujia: Hello, everyone. I'm Tang Zujia from Hechuang Capital. Let me briefly introduce three labels of Hechuang Capital: 1. We focus on early - stage hard - technology investments. Since 2012, we have been concentrating on early - stage hard - technology investments, with investment directions focusing on electronic information and biological information. With the technological evolution from informatization and digitization to intelligence, humans are creating a digital intelligent world that maps and interacts with the real physical world. Our investments are mainly centered around this theme. 2. We maintain a stable level of activity. The frequency of our annual investments is relatively stable and not greatly affected by the financial environment. Generally, we invest in about a dozen to two dozen projects each year. In 2024, we invested in more than 20 projects, and so far this year, we have invested in more than 10 projects. 3. We pay more attention to the impact of cycles on investments, including the economic cycle, financial cycle, industrial cycle, technology maturity cycle, and the growth cycle of enterprises themselves. Through researching the relationships between these cycles, we hope to help our investors improve capital efficiency as much as possible.

Liang Feng: Hello, everyone. I'm Liang Feng from Shengyu Investment. Shengyu Investment is an investment institution with a profound industrial background. Since its establishment more than 20 years ago, it has continuously focused on hard - technology investments, mainly in four sectors: semiconductors, robotics, commercial aerospace, and innovative medical devices. We have always adhered to the investment concept of "in - depth vertical investment". The so - called "in - depth" means to be deeply involved in the industry, serve and accompany excellent startups with the mindset and positioning of an industrial partner, incubate technological innovation through VC, and promote industrial integration through mergers and acquisitions. The so - called "vertical" means that we do not select and judge projects from a single point but sort out high - value nodes and high - growth enterprises from the perspective of the industrial chain. At the same time, we pay more attention to thinking about the capability connection, resource integration, and synergy among enterprises around the leading enterprises in the industrial chain to promote the iteration and development of the entire industrial chain. Thank you all.

Zhao Cong: Thank you all for your introductions. Now, let's get back to the topic. Today's theme is the second half of domestic substitution. First, I would like each of you to help us review the achievements of the first half of domestic substitution. Each of you can give an example or a specific data point about the progress of domestic substitution in the fields you have tracked or are concerned about in the past one or two years. Let's start with Mr. Zhang.

Zhang Gaonan: If I have to give an example, "Xinkailai" is a classic case of domestic substitution. The key to domestic substitution lies in high - end and sophisticated fields, especially in the bottleneck areas of high - end semiconductor manufacturing processes. Xinkailai was established to break through the bottlenecks in high - end semiconductor manufacturing. It aims to develop a nearly full - stack high - end semiconductor production equipment group for processes below 7 nanometers with almost 100% domestic supply chains. This is a typical case of a national - level high - end equipment breakthrough in the entire industrial chain. I think it is the most representative microcosm and demonstration of domestic substitution, especially in the semiconductor industry. Thank you.

Zhao Cong: I understand. With the impetus of the trade war, the semiconductor industry is indeed a very typical field. In the past two years, we can see that the self - sufficiency rate has significantly increased in various dimensions. Now, let Mr. Yang share with us.

Yang Yang: Actually, it's similar to what Mr. Zhang said. I think the hottest topic of domestic substitution in the first half of this year has been reflected in the secondary market. Cambricon has become a representative of the obvious domestic substitution phenomenon this year. In fact, during our communication with enterprises, although products like Ascend and Moore Thread's S - series have some inference capabilities, including the computing power for models with about 50 billion or 500 billion parameters, there is still room for improvement in computing for trillion - level models. At the same time, our domestic computing power cards still have some deficiencies in energy efficiency ratio and need to be improved. For example, while an H100 can complete a task with one kilowatt - hour of electricity, Cambricon may consume 1.5 to 2 kilowatt - hours. I hope to see more improvements and progress in domestic computing power cards in the future. Thank you.

Zhao Cong: It seems that many indicators in the secondary market have a magnifying effect. So, following Mr. Yang's topic, do you think the current valuation of Cambricon in the secondary market is within a reasonable range according to your understanding?

Yang Yang: Actually, I bought Cambricon in 2018 or 2019. At that time, I thought artificial intelligence was a definite trend in the future, and the GPU industry was also very promising. I chose Cambricon in China and NVIDIA abroad. However, I didn't hold on to Cambricon. Why? Because Cambricon has been losing money continuously. It wasn't until the first - quarter report this year that it started to have a PE ratio. Now, with a PE ratio of several thousand times, it is definitely overvalued to some extent. But coming back to the theme of our forum, this is about domestic substitution. With more capital investment in China, domestic substitution is inevitable. It involves large - scale equipment updates, which is the direction of domestic substitution. So, from an emotional perspective and considering national policy support, I think the current price is reasonable. Because I always believe that the pricing of a product only depends on the value perceived by those who want to buy it, not those who don't.

Zhao Cong: I understand that Mr. Yang actually believes that the price is determined by real - money votes. So, from an industry perspective, a moderate and reasonable bubble is actually necessary and beneficial to the industry. Now, let Mr. Tang from Hechuang give an example.

Tang Zujia: From my observation, domestic substitution has now entered the deep - water zone. There are almost no new companies or products that are simply for domestic substitution. Just yesterday, I communicated with an enterprise about their latest product progress and product planning. They first design a new - architecture product for the incremental market. Usually, after the product's sales and market position are stable, they will consider designing a Pin2Pin product to replace foreign competitors in the existing market. It can be said that the thinking about domestic substitution has changed greatly compared with the past.

Moreover, as everyone mentioned just now, computing power and semiconductor manufacturing have been the common focuses of domestic substitution in recent years, and the competition in the first half has reached a certain stage. Whether from the perspective of stock price and market value or the actual performance, the gap in single - card computing power in the computing power field is not that obvious. So, in the past two years, we have paid more attention to the progress in communication and storage. Since a computing power cluster is a product that combines computing, communication, and storage, compared with computing power, the gap between domestic products and foreign ones in communication and storage is larger, especially in communication. Although Huawei has the 384, it is based on the 910 computing power architecture. Since the 910 is not a GPU architecture, the integration efficiency of the 384 with other domestic GPU products is still not ideal. NVIDIA's significant improvement in speed and efficiency in recent years is largely due to the improvement of communication capabilities. From our perspective, we are now more focused on communication.

So, we have made many investments in the communication field this year. There are companies that replace NV link and NV switch at the protocol layer, active high - speed copper cable communication at the physical layer, and optical products with LPO and CPO solutions. With the development of technology, domestic products in China have received more support and cultivation from the application side, and in some niche fields, they have clearly outperformed traditional European and American products.

Zhao Cong: Thank you, Mr. Tang, for your sharing. It also shows us some forward - looking layouts of Hechuang. This makes me think that the key step for NVIDIA to build a trillion - dollar empire was its acquisition of Mellanox, which solved the problem of communication capabilities. Now, let's invite Mr. Liang.

Liang Feng: I'd like to share some data, from which we can see the progress and challenges of the domestic substitution process in China's semiconductor industry. In a sense, the comprehensive domestic substitution process of China's semiconductor industry started with the "ZTE incident" in 2018. Overall, the domestic substitution rate has increased from 10% in 2018 to 24% in 2024, and it is expected to reach about 26% this year. In different semiconductor sub - fields, the domestic substitution rate has also increased differently. For example, in the storage industry, the domestic substitution rate was almost zero in 2018, and the substitution rate of DRAM increased to 18% in 2024 and is expected to reach 23% this year. For semiconductor equipment, the domestic substitution rate increased from 4% in 2018 to about 13% in 2024 and is expected to exceed 20% this year. That is to say, whether overall or in sub - fields, the substitution rate is gradually increasing, and there has been a rapid increase in different fields. This is one side of the issue.

On the other hand, although domestic substitution has achieved comprehensive and substantial progress overall, the substitution rate is still very low, especially in key fields. For example, the substitution rate of CPUs increased from 0% in 2018 to 10% in 2024. In many core equipment and high - end chips, overseas companies still dominate and monopolize the market. For example, in the AI field that everyone has been focusing on recently, there are products like Huawei Ascend, Hygon, and Cambricon in the field of computing power chips. However, in the field of high - speed data transmission, high - bandwidth intelligent network card chips that can be compared with NVIDIA's CX series have not entered the large - scale mass - production stage.

Overall, the domestic substitution process of China's semiconductor industry has indeed entered the second half of the deep - water zone. Most of the easy tasks have been completed, and what remains are hard nuts to crack. That is, many core technologies and key fields still need to be broken through. But as the saying goes, although the journey is long and arduous, we will surely reach our destination if we keep moving forward.

Zhao Cong: Thank you, Mr. Liang, for your in - depth and quantitative sharing. We can see that in the first half, the gap for substitution has been opened. From the perspective of industry development trends, once the gap is opened, the substitution rate will surely increase, and this path is irreversible. Although the path in the second half is still long, from another perspective, it means that our potential market space is still huge, which is also an opportunity for future investments.

Next, we will ask questions one by one. First, I would like Mr. Zhang to share his views. Mr. Zhang has a technical background and has gradually transitioned to investment. We can see that hard - technology investment actually requires a high level of technical judgment from investors. Since the entire industry is constantly evolving and technological routes are also changing, there are many uncertainties in the process. I would like Mr. Zhang to share some methods for investors to continuously maintain advanced technical judgment and avoid making mistakes in early - stage projects.

Zhang Gaonan: Judging technological trends and success factors is indeed very difficult and poses a huge challenge to investors. I personally think it can be improved in the following aspects: First, cultivate cross - disciplinary learning abilities. Don't limit yourself to a single major. I majored in automatic control as an undergraduate, studied systems engineering as a postgraduate (it's necessary to cross two disciplines), and switched to the communication industry for my doctorate. I have been involved in a large amount of software development, hardware design, factory quality management, and Internet big - data projects. I am a product of cross - disciplinary education. Cross - disciplinary learning and the integration of knowledge are very important for investors. This is the most basic prerequisite and requirement for successful technology investment. How to achieve cross - disciplinary learning ability? First, you need to be brave enough to cross boundaries and learn across disciplines. In addition, most cross - disciplinary learning ultimately boils down to mathematical foundation and ability. The mainstream of large models is the Transformer framework. The core of Transformer is deep learning, and the foundation of deep learning is neural networks. Neural networks mainly involve matrix operations and probability. If you master linear algebra and probability theory well, you will have a much deeper understanding and imagination of the ability boundaries of large models than others. So, you need to be brave enough to spend time building a certain mathematical foundation, which will greatly improve your cross - disciplinary learning ability.

Second, no matter how strong your learning ability is, you should respect the professional thresholds of different fields. Actively consult real experts in the industrial and academic fields to seek the truth. This is a good method. However, please note that you must consult critically. Not all experts are good at investment. Generally, in my opinion, you can consult them more about objective facts such as technical difficulties, objective challenges, and industrial structure. Because they have more experience and are more accurate. But you must analyze the trend predictions yourself, and their opinions can only be used as a reference. Industry experts usually tend to be more pessimistic about future innovation, and their pessimism may prevent investors from seizing uncertain opportunities. So, you need to balance this by yourself.

Third, and I think this is the most important point, as an investor, you need to have a very high - level systematic thinking ability. No project is perfect; each has its own advantages and disadvantages. The so - called systematic thinking ability means being able to think out the real underlying causal logic from a large amount of seemingly chaotic information in different dimensions, abstract the essence of things, and make correct predictions. For the same objective fact,