Horizon's Strategic Transformation: Competition, Market Expansion, and Investment Value

Based on the latest market information and industry trends, I will conduct an in-depth analysis of Horizon’s strategic transformation and its impact on market competition position, investment value, and long-term profitability from multiple dimensions.

Horizon’s transition from a Tier2 chipmaker to a full-stack solution provider demonstrates clear strategic foresight. Through the launch of the “HSD Together” algorithm service model, the company has reduced partners’ manpower input, computing power consumption, and time-to-market in product development by 90%[1]. This model innovation not only lowers technical barriers but also builds a deeply bound ecosystem.

From the market structure perspective, Horizon has established an important position in China’s intelligent driving market. According to the latest data, cumulative shipments of the Journey series chips have exceeded 10 million units, with a penetration rate of over 30% in Chinese independent brands—meaning “one out of every three intelligent vehicles is equipped with Horizon’s solution”[2].

The two companies’ competitive strategies show obvious differences:

• Horizon
  : Adopts a “hardware to software” path, has formed stable integrated solution delivery capabilities, and provides toolchain and basic software services[2].
• Momenta
  : Originally focused on intelligent driving software, now shifting to self-developed chips. Currently, chip progress lags Horizon by 2-3 years, facing multiple challenges in engineering, supply chain, and customer qualification[2].

This difference gives Horizon a first-mover advantage in the current time window, especially during the critical period when car companies are launching urban NOA intensively.

China’s passenger vehicle market shows obvious price stratification. 130k RMB is an important threshold—models above and below this price account for half of the market each[3]. More importantly, there are many segmented markets in the sub-130k RMB segment:

• 100k-level mass vehicle market
• 70k-80k RMB economy fuel vehicle market
• 50k RMB and below micro vehicle market[3]

These segments currently have significant gaps in intelligent driving penetration. Horizon aims to popularize mature and reliable urban intelligent driving experiences in the 100k-level market through its single Journey 6M chip urban ADAS solution[3], providing huge growth space for the company.

Horizon’s “HSD Together” model builds a multi-layered revenue structure:

1. Chip sales: Basic hardware revenue
2. Algorithm services: Recurring software licensing and service fees
3. Ecosystem cooperation: Deep binding with Tier1 suppliers

The company plans to achieve 10 million-unit mass production of HSD in the next 3-5 years, with 70-80% through the “chip empowerment + HSD Together algorithm service” model[1]. This model ensures both scale effects and recurring service revenue.

According to industry data, from January to October 2025, sales of L2 and above ADAS vehicles reached 12.1095 million units (penetration rate: 64.95%), with L2++ and above models accounting for 4.8247 million units (39.84%)[4]. In the 100k-200k RMB price range, key contributors to the high-level market include BYD, Leapmotor, and Xpeng—exactly the core part of Horizon’s target market.

Long-term, the size of China’s sub-130k RMB intelligent driving vehicle market is expected to grow from 319.4 billion RMB in 2023 to 504.7 billion RMB in 2025[5], with a CAGR exceeding 25%, providing a broad market space for Horizon.

Horizon’s technical advantages are reflected in multiple dimensions:

1. Product iteration speed
   : Time to reach 1 million units shipment for Journey series products continues to shorten—36 months for Journey3, 24 months for Journey5, and only 12 months for Journey6 series[1].
2. Full-stack capability
   : Verified full-stack capabilities are open to the industry via algorithm service models, forming a technical closed loop[1].
3. Cost control
   : Overall HSD cost is controllable, with little pressure to equip on 150k or even 100k RMB level vehicles[2].

Horizon’s transformation will bring profound changes to its revenue structure:

• Shift from
  one-time chip sales
  to
  recurring software services
• Upgrade from
  hardware profits
  to
  software + service profits
• Expand from
  single product revenue
  to
  ecosystem platform revenue

This shift will significantly improve the company’s profit stability and margin levels.

With the advancement of HSD’s 10 million-unit mass production target, Horizon will enjoy significant scale effects:

1. R&D cost amortization: Fixed R&D investment is shared by more mass-produced models.
2. Supply chain bargaining power: Increased procurement scale brings cost advantages.
3. Data flywheel effect: More vehicles generate more data, further improving algorithm performance.

Despite bright prospects, Horizon still faces several key challenges:

1. Intensifying competition
   : Huawei plans to launch the enhanced version of ADS Pro to 150k RMB level vehicles next year[2]; Momenta is expected to lower urban NOA solution prices to below 5k RMB after self-developing chips[2].
2. Technology iteration risk
   : Intelligent driving technology evolves rapidly, requiring continuous large R&D investments.
3. Market education cost
   : Promoting high-level intelligent driving functions in low-end markets requires extensive user education and verification.

Comprehensive analysis shows Horizon’s strategic transformation has significant long-term value:

: Benefiting from intelligent driving popularization and affordable market expansion, revenue is expected to maintain high growth.
: With the achievement of HSD’s 10 million-unit mass production target, the company will become the core platform of China’s intelligent driving ecosystem.
:有望成为全球智能驾驶领域的重要技术供应商，具备成长为千亿级公司的潜力

Investors should focus on key indicators such as HSD mass production progress, ecosystem partner expansion, and affordable market penetration. Although facing challenges from competitors like Momenta, Horizon’s long-term competitive advantage in China’s intelligent driving market remains solid due to its first-mover advantage, full-stack capability, and ecosystem layout.

[1] Horizon Founder Yu Kai: The fundamental purpose of the HSD Together algorithm service model is to reduce partners’ development investment by 90% - Shengyueda Technology

[2] Horizon: Can the “domestic alternative chip” in intelligent driving defeat NVIDIA? - OFweek Artificial Intelligence Network

[3] Yu Kai: Horizon wants to bring good urban ADAS experiences to sub-130k RMB models - Interface News

[4] October 2025 ADAS Industry Insight Report - NE Times

[5] China Intelligent Driving Vehicle Market Size Forecast Chart - Industry Data