Ar/VR terminal capacity demand emerges, and many companies want to grab the "cake" of the FOUNDRY market

Recently, Meta Platforms announced the fourth quarter of fiscal 2021, which is also the company's first report card since the implementation of the "meta-universe" strategy, but the results are not satisfactory. Meta expects investments in Metacosm to reduce operating profit by approximately $10 billion in 2021.

According to the financial report, THE META META-UNIVERSE STRATEGY DIVISION, FRL, HAD REVENUE OF $877 million in the fourth quarter of last year, up 57% sequentially and 22% year-on-year. At the same time, the segment's operating loss in the fourth quarter of last year was $3.3 billion, and the net loss for each quarter of the year gradually widened, with a net loss of $10.19 billion for the full year of 2021, a net loss of $6.62 billion in 2020, and a net loss of $4.5 billion in 2019.

Even so, Meta has maintained a very rapid momentum to accelerate investment and expansion.

Increase supply chain demand

An industry person in charge of new product introduction revealed to Jiwei Network that he recently received an interview invitation from Meta. Meta said in the invitation: "We are currently expanding our manufacturing design engineering teams in Shanghai and Shenzhen, China, covering product areas ranging from displays, cameras and optical modules. The company hopes to accelerate the construction of the metaverse by absorbing more experienced talents in the fields of optics and display.

"From my understanding, the reason why Meta has expanded its manufacturing design engineering team in China on a larger scale is mainly related to the growth of market size; in order to cope with demand, the production capacity of the whole machine foundry has also increased relatively, and naturally more relevant technical personnel are needed to do docking."

Previously, in the IDC Global Augmented and Virtual Reality Spending Guide, IDC estimated that the global spending scale of the AR/VR market will reach $12.07 billion in 2020, an increase of 43.8% year-on-year. China's overall market size will reach about $6.6 billion by the end of 2020, an increase of 72.1% over 2019, surpassing the United States and Japan in terms of scale and growth, ranking first in the world. In the long run, IDC is optimistic about the global market.

According to the understanding of Jiwei Network, the current mainstream suppliers in the field of AR/VR/MR oem include Foxconn, Goertek, Flextronics, Quanta and Pegatronics five, this batch of companies also divided a large part of the market orders, the corresponding customer base not only covers SONY, Pico, FB, Microsoft and other first-line terminals, but also no lack of Otto Technology, Yingchuang Technology and other start-up brands.

However, the current boom of "meta-universe" has injected new impetus into the growth of market scale, and the increase in terminal demand also means that the foundry field will usher in more opportunities.

Industry insiders believe: "The metacosm is a field with large investment and a long return cycle, so enterprises will be more cautious when choosing this track, resulting in a long period of time before, terminals and whole machine foundries are oligopolistic markets; now that the heat is up, we can see the actual order demand, and more participants will inevitably emerge in all aspects of the industrial chain in the past two years." ”

Jiwei Network learned from the supply chain that at present, many domestic parts manufacturers have the intention of sharing a piece of the meta-universe field, and the whole machine FOUNDry link is the "fragrant food" in the eyes of the first-line manufacturers, and there have been some mainland listed companies that have begun to carry out related layouts.

Competitive pressures are beginning to emerge

One of the companies told Jiwei Network: "The profit margin of the pure foundry assembly model is small, so the foundries in the head camp will basically not do it, most of them are in the ODM or JDM mode; but for our new enterprises, pure foundry is a relatively simple and quick way to import customers in the early stage." ”

"For many parts manufacturers, the strongest ability is mainly reflected in a certain segment, and the manufacture of the whole machine requires manufacturers to have certain experience in electronic supply chain management, cost control, whole machine product development, system integration and complex platform product design and manufacturing." These experiences cannot be achieved overnight, so our early planning choices start with hardware assembly. ”

Not only that, compared with the ODM/JDM model, the pure foundry model is less difficult to build both the investment scale and the production line. "Our production line in the cloth at this stage is actually a pure hardware assembly line, combined with the company's situation, the larger investment is in the purchase of new testing equipment, the current production line has been accelerated construction."

Although it is not too difficult for manufacturers with a certain size to enter the market, as mentioned above, only doing simple hardware assembly is not in line with long-term development.

Industry insiders believe: "Goertek has been deeply engaged in this field for many years, and has mastered the industrial chain resources of assembly, system integration, optics and other links, so that its advantages in the field of whole machine foundry are very obvious, and a high barrier has been established." Peers know that such advantages are difficult to catch up in the short term, and they also know that this is the right direction, so some powerful companies want to enter the game and will do it in this direction. ”

The other party said that this model has relatively high requirements for enterprise qualifications, because the long-term investment of the "meta-universe" is huge, and human, material and financial resources are indispensable, so these conditions have actually screened out many competitors. However, for competitors who are also the leaders in the subdivision field, there will still be competitive pressure on Goertek.

Such a situation is actually happy for terminal brands. When the product starts to start, the first thing to consider is to reduce costs, the more choices of suppliers, the more conducive to the terminal to reduce costs. (Proofreading/Lee)