Jiwei network news In 2022, it happens to be the twentieth anniversary of the establishment of Huiding Technology, and no one can deny that Huiting Technology was once the king of the fingerprint chip industry, which is not only reflected in its original rapid growth in performance, but also in its strong voice on smart phones, and even let OPPO once issue a "block letter" to it.
In September 2019, the market value of Huiding Technology officially exceeded 100 billion yuan, becoming the first semiconductor company with a market value of more than 100 billion yuan in A shares, and by February 2020, its market value peak period exceeded 170 billion yuan, however, in just over two years, its market value plummeted from more than 170 billion yuan to less than 27 billion yuan, evaporating a full 150 billion yuan!
The reason behind it, the rapid development of Huiting Technology has undoubtedly seized the outlet of fingerprint chips, however, with the changes in the industry, it has also led to its current predicament, from a net profit of more than 2.5 billion yuan in 2020, to the first quarter of 2022 into a loss, Huiding Technology only took two years; more severely, according to its existing business outlook for the future, the development of Huiding Technology is still full of uncertainty!
Grasp the wind and fall on the road to the altar
Looking back at the development history of Huiding Technology, it can be described as very legendary, and from 2002 to 2019, almost every transformation has been very successful. First of all, from 2006, on the basis of fixed telephone chips, the development of capacitive touch button chips, and in 2010 to achieve small batch production, to 2011, with the rapid development of the smartphone and tablet computer market, its capacitive screen touch chip sales increased rapidly, and then in 2014, it began to enter the fingerprint chip market.
Overall, at that time, it successfully transformed into the capacitive touch chip market through the fixed telephone chip market, and from 2013 to 2015, the sales of capacitive touch chips accounted for more than 98% of the company, and in 2014, the mass production of fingerprint chips began.
It can also be seen from the changes in the performance of Huiding Technology that each of its performance surges is due to the rapid start of new products. For example, in 2013-2015, its revenue maintained steady growth, but the overall growth rate was not large, because the main revenue at that time came from the capacitive touch chip business, but in 2016, its revenue grew rapidly.
According to the author's inquiry, in 2016, its largest revenue business has changed from capacitive touch chips to fingerprint chips, and in this year, its capacitive touch chip revenue is still declining year-on-year, at the same time, the revenue of fingerprint chips increased by 788.66% year-on-year, becoming the company's largest business, prompting its net profit in the year to also increase significantly.
The reason behind it is that in 2013, Apple carried a fingerprint chip in the iPhone 5S, which completely ignited the entire fingerprint chip market, and domestic mobile phone manufacturers followed up, and then the large-scale mass production of Huiding Technology fingerprint chips became the most beneficial manufacturers among domestic fingerprint chip manufacturers, which also paved the way for its landing in A-shares in 2016.
However, through the above financial chart, it can also be found that although its revenue has been growing from 2016 to 2018, it is obviously weak, and the net profit has declined year-on-year in 2018, even lower than the peak period in 2016.
The reason behind this is that at that time, many domestic capacitive touch chip manufacturers entered the fingerprint chip manufacturers, and were successfully mass-produced, and then like many consumer electronic chips, they entered a state of price war, which was also one of the reasons for the decline in their net profits.
However, in 2019, Huiting Technology once again ushered in its peak moment, in this year, its under-screen fingerprint chip mass production, and the price at that time was outrageous in the industry, at this time even has the right to choose customers. At the time of the complete outbreak of fingerprints under the screen, its revenue and net profit have reached a historical peak.
It is also from this time that the screen fingerprint chip market also repeats the old road of capacitive fingerprint chips, with the large-scale commercial use of fingerprint chips under the Slim Micro Screen, the price war officially kicked off, such as OPPO, Huawei have begun to use the Si Li Micro Solution in large quantities, resulting in a rapid decline in the price of fingerprint chips under the screen, which is also the reason for the sharp fluctuations in the gross profit margin of Huiding Technology.
For example, in the era of capacitive touch chips in 2013-2014, Huiting Technology maintained a gross profit margin of more than 60% by virtue of its position in the industry, but in 2015, after falling into a price war, the gross profit margin declined rapidly, and when it entered the era of capacitive fingerprint chips in 2016-2017, it also quickly entered the price war stage, resulting in the gross profit margin of the two core businesses being very low, until 2018-2019 into the era of fingerprint chips under the screen, which made the company's gross profit margin improve. However, in 2020-2021, due to factors such as price wars and market demand, the company's gross profit margin continued to decline.
At the time when the fingerprint chip under the screen was just mass-produced, it was undoubtedly a new selling point for smart phones, which also led to the domestic first-line mobile phones occupying the track, prompting Huiding Technology to become an industrial sweet, to some extent, the fingerprint chip under the screen at that time has become the same as the processor chip, becoming the highlight of the flagship machine of major mobile phone brands, and this has also contributed to the "strength" of Huiding Technology.
What a strong direct PK mobile phone terminal customer but tragically "banned"
There is no doubt that behind the rapid development of The performance of Huiding Technology, it is inseparable from the industrial outlet; at the same time, under the trend of profit temptation, the initial price of Huiding Technology's under-screen fingerprint chip was as high as more than ten US dollars, which accounted for a high proportion of the hardware cost of smart phones at that time. What is more serious is that when cooperating with large customers, Huiting Technology has encountered the "ban" of large customers.
Time back to September 2019, an email about OPPO sent to suppliers shows: a recent supplier dishonest incident, brought huge losses to our company, after decision-making, it is now included in the OPPO supplier ban list, the ban period of 5 years, hereby announced:
OPPO and Shenzhen Huiding Technology Co., Ltd. (hereinafter referred to as "Huiding") have maintained many years of cooperative relations in the fields of TP drive and fingerprint sensor. In May 2018, our fingerprint procurement team communicated with Zhang Fan, chairman of Huiding Technology, on the cooperation of the second generation of optical fingerprints under the screen, and then Huiting promised to supply a planned project of OPPO in batches. So the project operation, our company began to invest relevant resources, preparation, but on June 4, Huiding Technology was forced by the pressure of other customers, in order to ensure the limited use of other customers, the previous commitment to OPPO batch delivery time was delayed by three months, resulting in OPPO project can not be carried out, huge losses.
This kind of unfulfilled behavior OPPO resolutely can not tolerate, after decision-making, huiding will be included in the OPPO supplier ban list, the prohibition list period is 5 years (Note: the suppliers in the banned list and the original major investors opened the company during the ban period in our supplier system shall not be activated, including first-tier suppliers, second-tier suppliers, third-tier suppliers and more upstream suppliers).
Subsequently, Huiding Technology issued an apology on the company's official website: a few months ago, Huiting Technology caused trouble to OPPO due to work mistakes, for which we expressed deep apologies and carried out deep internal reflection at the first time. OPPO is the world's leading technology brand, and Huiding Technology looks forward to the opportunity to reach a new cooperation with OPPO through excellent technology and services, adhering to the principle of integrity, and bringing safe and convenient technology experience to consumers around the world.
According to the author's understanding, it is to some extent that the strength of Huiding Technology in terminal mobile phone customers has laid a mine for its subsequent development! According to industry sources, when the fingerprint chip was just put on the volume, the price of a single chip of Huiding Technology was as high as more than ten US dollars, which was a lot of pressure on terminal manufacturers, and it was in the state of "asking for goods" from suppliers.
Then the above OPPO incident occurred, when the OPPO flagship R17 was about to be mass-produced, and the fingerprint chip solution of Siliwei was changed in the middle, and Siliwei also took this opportunity to successfully enter the OPPO screen fingerprint solution supplier.
In the view of industry insiders, "the strong practice of Huiding Technology makes these large customers of domestic first-line mobile phone brands very 'depressed', so after the mass production of Theili Micro Program, Sili Micro not only snatched the order of Huiding Technology through the price war, but also quickly lowered the unit price of the fingerprint chip under the screen. ”
The OPPO incident is actually just a prologue, after the OPPO incident, the negative impact on Huiding Technology is also Huawei's high-end flagship machine, at this time, the fingerprint scheme under the Micro Screen of Sili has also entered the Huawei flagship machine supply chain system, which has undoubtedly caused an impact on Huiding Technology, not only in terms of shipments to share market share, but also in terms of price passive decline.
This has opened the curtain for the decline in the performance of Huiding Technology, whether it is the price or customer market share, it has begun to decline, so in 2020, its net profit has declined rapidly.
Where does the industry go in the future?
Who can not deny that the fingerprint chip industry has long declined, has passed the original outlet, whether it is the latest capacitive fingerprint chip era, or the current era of fingerprint chips under the screen, in this process, many capacitive fingerprint chip manufacturers to the collapse, and even the global capacitive fingerprint chip leading manufacturer FPC finally did not have good results, not to mention the many domestic small and medium-sized capacitive fingerprint chip manufacturers, after entering the era of fingerprint chips under the screen, on the one hand, lies in the technical difficulty and patent threshold, On the other hand, the degree of concentration of smartphone terminals has increased significantly, resulting in small and medium-sized manufacturers not being able to enter the market at all.
From the perspective of market demand, although the under-screen fingerprint chip in the high-end smart phone is still the standard, however, with the rapid decline in Huawei's flagship machine shipments, resulting in a great impact on domestic under-screen fingerprint chip suppliers, because from the high-end flagship machine market, Huawei's missing share is mainly robbed by Apple and Samsung, and these two high-end flagship machines are using overseas manufacturers' off-screen fingerprint chips, which to a large extent means that the market capacity of fingerprint chips under the screen is decreasing.
In addition, from the perspective of market demand, global smartphone shipments have fallen into a stagnant state, and in the domestic market, they have entered a year-on-year decline in shipments. According to IDC data, in the first quarter of 2022, the Chinese smartphone market shipped about 74.2 million units, down 14.1% year-on-year. In addition to glory, domestic first-line mobile phone brands OPPO, vivo, millet shipments have fallen sharply year-on-year, and this is also the core customer of fingerprint chips under the screen of Huiding Technology!
Obviously, for Huiding Technology, in fact, it has long been aware of the crisis, in this case, it has taken two measures: one is to capitalize the operation into more chip industry; the other is to vigorously tap talents; however, from the perspective of the former, there is no great effect at present.
The first is the capitalization operation, as mentioned above, in 2019, the revenue of Huiting Technology mainly comes from fingerprint chips, at this time, fingerprint chip revenue accounts for nearly 84% of the company's total revenue, and the gross profit margin of fingerprint chips this year increased by 9.73 percentage points. Under the single product, its horizontal expansion and substantial growth in performance have also laid the foundation for its capital operation.
In August 2019, Huiding Technology announced that it intends to purchase NXP B.V.'s Voice and Audio Solutions business through cash payment for $165 million and complete the asset delivery in February 2020.
In August 2020, Huiting Technology once again said that it spent 39.5 million euros to complete the acquisition of Germany's Dream Chip Technologies GmbH company (hereinafter referred to as DCT), according to which it said that by integrating DCT's strong technical capabilities in the field of autonomous driving systems, Huiting Technology's innovation ability will be like a tiger to provide more differentiated innovative products for global automotive customers.
Through the above two acquisitions, huiting technology business has also extended from the terminal field such as smart phones to the internet of things and automotive electronics. However, judging from the financial report of Huiding Technology in 2021, the role of these two acquisitions is not very large at present.
In addition to the main products fingerprint recognition chips and touch chips, although the revenue of other chips in 2021 increased by 67.58% year-on-year, the overall revenue was only 910 million yuan, such as the revenue contributed by dct after the consolidated statement of only 3.21 million euros, and the corresponding net profit was a loss of 5.51 million euros, compared with fingerprint recognition chips, there is still a big gap, and the gross profit margins of fingerprint recognition chips and touch chips are falling rapidly.
In addition to expanding its business through capital operation, Huiding Technology also tries to enhance the company's operation by tapping talents, on March 15, 2022, according to the announcement of Huiding Technology, in order to meet the needs of the company's development, after the nomination of the company's CEO and the qualification review of the nomination committee of the board of directors, the board of directors agreed to appoint Ms. Hu Yuhua as the president of the company, fully responsible for the overall operation and management of the company and report directly to Mr. Zhang Fan, chairman and CEO of the company.
According to the data, Ms. Hu Yuhua joined Texas Instruments in 2000 as a technical sales engineer, in 2015, Ms. Hu Yuhua was appointed president of Texas Instruments China, and in August 2018, Texas Instruments announced the appointment of Ms. Hu Yuhua as vice president of Texas Instruments and continued to serve as the president of Texas Instruments China; and previously, Huiding Technology has introduced former TI executive Xie Bing to join the board of directors as a non-independent director of the company.
Overall, for the current Huiding Technology, it can be described as "embattled", the traditional fingerprint chip and touch chip business is in the downhill stage, and the terminal market demand is sluggish, the gross profit margin decline is even worse, at the same time, the newly acquired business in terms of performance is not very fast, in this case, what is the performance of Huiding Technology to protect?
If it is said that in the past decade, Huiding Technology first stood on the capacitive touch chip outlet, then stood on the fingerprint chip vent, and finally seized the fingerprint chip outlet under the screen, then, in the next ten years, where is the outlet that belongs to Huiding Technology? At least for now, the answer is very confusing!
(Proofreading/Arden)
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