"Investor Network" Wu Wei
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With the development of technology, the semiconductor industry has become one of the most important industrial chains in the world. From chip design to wafer manufacturing, from silicon to special gas, from packaging and testing to assembly, the entire semiconductor industry chain contains many processes, and has also achieved a number of companies with great influence in the world.
A seemingly simple smart device often includes multiple subsystems such as integrated circuits, optoelectronic devices, discrete devices, and sensors. According to the World Semiconductor Trade Statistics Organization, integrated circuits, optoelectronic devices, discrete devices and sensors accounted for 82.02%, 9.17%, 5.41% and 3.4% of the semiconductor market in 2020, respectively.
Although sensors account for only 3.4% of the semiconductor industry market, the role of sensors in smart devices cannot be ignored. The sensor has multiple sub-categories such as sound, pressure, and differential pressure, which can convert external signals such as sound, pressure or pressure difference into electrical signals, and then hand them over to smart devices for calculation and processing to achieve the functions required by consumers. In a sense, sensors are the eyes and ears of smart devices.
Recently from Goertek (002241. SZ) split, and Goertek Microelectronics Co., Ltd. (hereinafter referred to as "Goertek"), which intends to be independently listed on the Growth Enterprise Market, submitted a prospectus. Goertek's main products are MEMS (microelectromechanical systems) devices based on sound sensors, and the company is also actively exploring the market for mems devices for pressure and differential pressure sensors.
There is uncertainty in the development of new products
Goertek is a derivative of Goertek's MEMS technology research and development center. In 2009, the smart phone represented by Apple opened the era of large-scale commercial application of MEMS acoustic sensors, and Goertek also ushered in a golden opportunity for development. In 2017, Goertek was formally established and gradually separated from Goertek shares, after which Goertek carried out several rounds of capital increase and completed the shareholding system reform in January 2021. On December 28, 2021, Goertek officially submitted the declaration materials and intends to land on the GEM.
After more than ten years of development, in addition to wafer manufacturing, Goertek, which starts from packaging and testing, has a complete industrial chain business model, including chip design, package design, system solution design, system-level packaging and testing, etc.
Goertek's business model
Source: Prospectus
As the largest acoustic consumer electronics manufacturer in China and even in the world, Goertek's Goertek has inherent advantages in the field of MEMS acoustic sensors. During the period from 2018 to the first half of 2021, about 90% of the company's revenue was provided by EMS acoustic sensors, and other MEMS sensor revenue accounted for less than 10% of the company's revenue.
Source: Prospectus
Goertek's products, especially MEMS acoustic sensors, are widely used in consumer electronics fields such as smartphones, smart wireless headphones, tablet computers, smart wearables and smart homes, as well as automotive electronics. Customers include Glory, Millet, OPPO, vivo and many other consumer electronics companies, among which the consumer electronics enterprise customer A, which has not disclosed the company's name, has long been the first major customer of Goertek, contributing 41.44% of the revenue to Goertek in the first half of 2021, and the second largest customer Xiaomi accounted for only 8.54% of the company's revenue in the current period.
It is worth mentioning that in 2020, affected by changes in the global supply chain, the shipment of Goertek micro MEMS acoustic sensor products accounted for 32% of the industry, surpassing the previous industry leader Lou's for the first time and becoming the first in the industry.
However, after the shipment of Goertek micro MEMS acoustic sensor products became the first in the industry, its hidden worries gradually appeared. From the perspective of the market share of Goertek micro MEMS acoustic sensors in 2020, although MEMS acoustic sensors have an important position in consumer electronic products, the global market is not large, and the overall scale of global MEMS acoustic sensors in 2020 is less than 9 billion yuan.
In the competitive landscape of established companies such as Lou's, it will be increasingly difficult for Goertek to further increase the revenue of MEMS acoustic sensor products. To this end, Goertek has actively laid out new products, developed other MEMS sensor product lines represented by pressure and differential pressure, and intends to open up automotive electronics, industrial, medical and other markets in addition to the field of consumer electronics.
However, as of the end of 2020, the revenue of goertek's other MEMS sensor products was only 177 million yuan, accounting for 5.66% of the current revenue. In other MEMS sensor markets, there are leading enterprises such as Bosch, Broadcom, and Verizon United, which have deep accumulations in technology, supply chain and customer resources, and Goertek wants to seize market share from them, and there are still some uncertainties. According to Goertek, during the first half of 2018-2021, the capacity utilization rate of Goertek's other MEMS sensors has not exceeded 65%.
The proportion of self-developed chip applications is low
Although Goertek has chip research and development capabilities, and some products also use the company's self-developed chips, but considering product performance, customer satisfaction and other issues, Goertek uses a large number of Infineon chips in products, and the proportion of self-developed chips in the company's products is not high.
From 2018 to the first half of 2021, Goertek's MEMS acoustic sensor shipments equipped with self-developed chips were 135 million, 238 million, 249 million and 0.99 billion, accounting for 13.16%, 15.69%, 14.14% and 11.73% of its MEMS acoustic sensor shipments, respectively.
The purchase of a large number of high-value chips makes the cost of Goertek microchip procurement remain high, and chips have become the main cost of the company's products. From 2018 to the first half of 2021, chip supplier Infineon has been the number one supplier of Goertek. During the reporting period, Goertek's procurement at Infineon accounted for 54.8%, 64.81%, 65.4% and 56.48% of the total procurement volume of the current period, respectively.
Core chips rely heavily on external procurement, resulting in Goertek's gross profit margin significantly lower than that of its peers. From 2018 to the first half of 2021, the gross profit margin of Goertek was 29.69%, 22.85%, 22.38% and 24.3% respectively; in the same period, the gross profit margin of Goertek's main competitor Lou's was 39.01%, 38.37%, 35.48% and 40.34%, respectively, which was more than ten percentage points higher than that of Goertek.
In view of the gross profit margin lower than that of the same industry companies, Goertek explained in the prospectus: Compared with Lou's, the company's business strategy is to deeply serve core customers, continue to respond quickly to its needs for product technology upgrades, and the company purchases chips from Infineon to improve product performance and improve customer satisfaction, thereby seizing market share. Because the company's chips are mainly purchased from outside and supplemented by self-research, and Lou's chips are mainly self-developed, the company's gross profit margin level is lower than that of Lou's.
In fact, from the point of view of the fact that Goertek microchips rely heavily on external procurement, there is still a certain gap between Goertek micro-developed chips and mainstream products in the market in terms of performance and customer recognition.
Up to now, Goertek is exploring other MEMS sensor markets to find new revenue growth points for the company, but it is also facing the challenge of improving the performance of self-developed chips and customer recognition. Although Goertek's shipments of sound MEMS sensors have become the first in the industry, Goertek still has a long way to go to become a truly powerful semiconductor company. (Produced by Thinking Finance)■