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[Interview] BMW and GoPro Adopt Chips&Media’s IP, Industry-Leading Technology
BMW and GoPro Adopt Chips&Media’s IP, Industry-Leading Technology
Seoul, South Korea – Sep 29, 2024
Interview with Kim Sang-hyun, CEO of Chips&Media, a Video IP Provider
150 clients, including Qualcomm, NXP, Google, AMD, and Meta
Powering diverse applications such as YouTube, Netflix Streaming, Autonomous Driving, Smartphones
Dividend Payout Ratio Expands Every Year, Driven by “CMNP,” NPU IP
▲ Chips&Media’s CEO, Kim Sang-hyun, at the headquarters in Gangnam-gu, Seoul
“In the age of artificial intelligence (AI), video technology is poised to penetrate nearly every industry. Key examples include global OTT platforms like Netflix, autonomous cameras and infotainment systems, and AI-based video detection in smartphones. The video IP market is set to bloom over the next three to four years.”
These insights were shared by Kim Sang-hyun, CEO of Chips&Media, during an interview at the company’s headquarters in Seoul on September 27. Chips&Media, a global leader in video IP, has its solutions embedded in products by BMW, Volkswagen, GoPro, and various OTT platforms. With a client base of 150 global companies—including Qualcomm, NXP, Google, AMD, and Meta—Chips&Media has established a robust technological edge, surpassing competitors like VeriSilicon (China) and Allegro (France).
Kim anticipates the ongoing AI boom will provide fertile ground for the growth of video-related technology. Chips&Media specializes in video codec IPs embedded in semiconductors, enabling image recording and playback. Video processing technology plays a pivotal role in platforms like YouTube, where AI manages streaming data. Similarly, AI-based video codecs enhance smartphone capabilities, such as object detection in images or improving photo clarity in low-light conditions.
This technology is also integral to autonomous vehicle cameras, infotainment systems that provide driving data, and data centers that rely on video codec IPs to handle increasing streaming demands for OTT platforms like Netflix and Disney Plus.
Chips&Media generates approximately 50% of its revenue from overseas royalties. “Every time customers sell semiconductor chips, we earn royalties,” Kim explained. “Our technology is integrated into over 200 million electronic products annually, with a cumulative total of more than 1.55 billion devices sold worldwide.”
In September last year, Chips&Media launched CMNP, an NPU IP heralded as the company’s next-generation growth driver. CMNP is an image-specific NPU IP, offering faster processing compared to GPUs or general-purpose NPUs, which tend to consume more power. Its applications span a wide range of camera devices, including smartphones, automobiles, drones, and CCTVs. CMNP excels in upscaling processes, delivering smoother and sharper visuals than GPUs. Moreover, it complements NVIDIA’s GPUs, enabling broader adoption by companies using NVIDIA’s GPUs.
By 2030, Chips&Media aims for CMNP to contribute 20% of its total revenue. The CEO noted, “Vision 2025 has already been realized, and we are now focused on achieving Vision 2030, with an expected annual growth rate of 10–15%, aligning with the overall semiconductor IP market.”
The company is expanding its presence in the Chinese market. Last month, Chips&Media established a joint venture, InnoChipsMedia, a competitive Chinese AI semiconductor company, to tap into China’s IP sales and data center markets. Additionally, the company recently secured a $6.6 billion video IP license agreement with a leading Chinese semiconductor firm.
Chips&Media remains committed to prioritizing shareholder value. It maintains an annual dividend payout ratio of 20–25% of net income and has steadily increased dividend payments since 2020. The company has also completed three rounds of KRW 3 billion treasury stock purchases each. It is committed to further expanding its dividend ratio in line with government value-up programs.
The CEO emphasized, “We are creating a virtuous cycle by reinvesting in technology development through shareholder-friendly management. The dividend ratio was low due to valuation losses later last year, but we are optimistic about growth in shareholder value this year.”