Source: EE Times China Author: Liu Yuwei
Recently, Thinkplus Semiconductor announced that it would officially accept the series B financing of nearly RMB 100 million invested exclusively by Hui Capital, which will be mainly used for the company's new product development and research. Hui Capital is an investor dedicated to investment in semiconductor field, ranging from product design to manufacturing, and is good at capturing industry development opportunities and tapping the value of investment objects.
Founded in 2011, Thinkplus Semiconductor has been focusing on the design of POWER+ power management system chip for battery applications and is dedicated to providing cutting-edge battery management system-level chip solutions for smart wearables, consumer electronics, industry, energy storage system, new energy vehicles, etc. The product portfolio includes power bank management SoC, TWS earbuds power management chips, Li-ion battery charging chips, power management integrated circuits (PMIC), wireless charging chips, etc.
In 2022, it is very hard for the entire semiconductor industry as the declining consumer electronics industry affected the investment enthusiasm of the upstream semiconductor industry. As for choosing to invest in Thinkplus Semiconductor in the downturn period, Xiao Haiwei, Investment Director of Hui Capital said, "There is a business cycle in any industry, and the same is true in the consumer electronics industry, but this law does not apply to entrepreneurs. The best entrepreneurs are those who can lead their teams to resolve uncertainties and overcome difficulties, and lead their teams to succeed by actively creating value beyond bull and bear cycles."
Xiao believes that although the current consumer electronics industry has declined significantly in development, smart terminals such as mobile phones and IoT+health technology still maintain an industrial scale of trillions of yuan; technological innovation is not going to stop and customers' demand for technology and product innovation will not stagnate. An excellent team that is committed to the above industries and a customer-centered approach to create value for customers will surely usher in the "Davis double play" moment when the consumer electronics market comes alive again.
Talking about the reasons for choosing Thinkplus Semiconductor, Xiao said that with deep cultivation in semiconductor (integrated circuits) industry, the team of Thinkplus Semiconductor has always been focusing on the research and development and application of lithium battery-powered products, and adhering to the customer's market demand as the center. As a dedicated, diligent and discreet team that can endure the loneliness of "key & core technology", it has the characteristics of an excellent entrepreneur.
"The essence of investment is to invest in good people and good team. We fully trust and respect the team of Thinkplus Semiconductor. We believe that under the leadership of General Manager Dong Guanbin, Thinkplus Semiconductor will certainly be able to consolidate its basic consumer electronics business, capture the good opportunities in the renewable energy industry, and make active plans for development of high-performance analog ICs for electric vehicles, energy storage, photovoltaic power generation, wind power generation, short-distance travel and other fields. I believe that good enterprises like Thinkplus Semiconductor will inevitably have a better and broader development prospect for development."
In the past two years, the market share of TWS earbuds battery management chips of Thinkplus Semiconductor ranked first, with a total shipment volume of more than 700 million pieces, and the chips have been adopted in the products of well-known brands at home and abroad, such as Xiaomi, vivo, OPPO, OnePlus, realme, Transsion, Meizu, 1MORE, Baidu, NetEase, EDIFIER, JBL, Harman, Lenovo, etc. The number of employees at Thinkplus Semiconductor has grown from 70 in 2021 to 140 in 2022 and is expected to grow to nearly 200 in 2023.
Recently, Mr. Dong Guanbin, General Manager of Thinkplus Semiconductor, was interviewed by the EE Times China and other media to share his views about the market trend of wearable devices such as TWS earbuds, the opportunities and challenges in the downward cycle of the semiconductor, the integration of domestic IC design companies, and the development plan of Thinkplus Semiconductor in 2023.
Figure: Dong Guanbin, General Manager of Thinkplus Semiconductor
The market share of wearable products such as TWS earbuds is still expanding
As a leader in power management ICs for TWS devices, Thinkplus Semiconductor believes that the earbud itself is not a new product, but TWS is a new product form. Dong believes there is a boom period of about 10 years between the launch of a new consumer electronics product and its peak sales.
"It has been nearly 6 years since TWS earbuds come out in 2017. TWS earbuds are undergoing upgrading although the high growth period has passed. Terminal manufacturers will seize the opportunity to position their products, so both the TWS market and the technology are subject to constant change," said Dong, thus TWS is an area of growth potential for upstream IC suppliers.
The ICs of Thinkplus Semiconductor achieved varying degrees of growth in sales this year in other wearable device markets, such as AR / VR smart glasses and smartwatches. It is reported that the revenue of wearable ICs accounts for up to 70% of total revenue of Thinkplus Semiconductor, of which the smartwatch devices increased significantly in 2022, accounting for 20% of the revenue of wearable ICs.
Before the adjustment in China's epidemic control policy, wearable devices with blood-oxygen and heart-rate monitoring functions were widely considered unnecessary. However, many consumers began to pay attention to their own health data after the "positive test result". Dong believes that in the future, wearable devices, especially high-end models equipped with health monitoring function, will see rapid growth in sales.
At present, a number of terminal product manufacturers have made the development plan of smart glasses and AR / VR devices, but for the popularity rate and market size, it is still in the relatively early embryonic stage.
Dong believes that the power technology used in the field of wearables has the characteristics of continuity and interoperability, as the technical basis of each new system is interchangeable; however, much technological innovation is also required since each product has its own special needs. "We have also made a lot of innovations on the basis of the original technology to really improve customer satisfaction with the products and thus improve the product experience of end users, of which either the technology accumulation or the product thinking develops along the same continuous line. "
In the context of the declining industry, we should take a good look at these markets
Although the electronic products industry and the semiconductor industry has entered a downward cycle since the second half of 2022, from the perspective of the orders received by Thinkplus Semiconductor in the first quarter of 2023, both a year-on-year growth (compared with the first quarter of 2022) and a quarter-on-quarter growth (compared with the fourth quarter of 2022) have been achieved. The performance of the following areas is considered to be outstanding in the whole downward cycle:
1. Automotive power management ICs. Automotive power management ICs of Thinkplus Semiconductor still focuses on power-related technologies such as high-voltage DC-DC and battery management system (BMS) ICs, and the product is expected to achieve sample inspection this year, and the certification process of automotive PMIC will be initiated after verification.
2. Mobile energy storage ICs. Driven by the "peak carbon dioxide emissions and carbon neutrality" policy, many fields in China have surpassed their foreign counterparts in a short period of time with the help to new energy. Among them, portable energy storage products, household energy storage products and commercial energy storage products may become important boosters for China's economy in the future.
"China has unique solar, wind and other green resources. It is vigorously utilizing these resources, which can indirectly drive the continuous breakthroughs in the application of battery-related technologies," said Dong Guanbin. Dong believes that the IC products related to battery application are the strengths of Thinkplus Semiconductor, so the company also made a plan for their application to energy storage products, and hopes to provide more complete and rich solutions beyond single ICs in the future.
3. Intelligent logistics industry. Due to the changing consumption patterns in China, there is a growing demand for intelligent and electrified products in the logistics industry, such as smart helmets, smart driving, and rapid battery replacement. In the future, the last kilometer logistics will not even need manpower, but will be completed by robots, and that will be impossible without power management ICs.
What the above industries have in common is that they are all in the rising period of industrial development, and that there are essentially no difference from the previous demand for terminal products, but there are still different degrees of new demand. At present, Thinkplus Semiconductor mainly focuses on the upgrading, development and innovation of power products in response to the needs of these customers.
Dong believes that the driving force for the development of the semiconductor industry in the downward period lies in the application demand of the industry, rather than relying on the demand of "to c". "For a long time in the future, there may be no single product whose scale is comparable to that of smart phones, nor will there be a new form of product to replace it. However, some intelligent products that combine many individual functions of mobile phones can provide combined functions, so as to promote the development of ICs in various industries."
Why can't the Chinese IC industry step into the integration period?
At the 2022 Annual Meeting of China Integrated Circuit Aided Design Industry & Xiamen Integrated Circuit Industry Innovation and Development Summit Forum (ICCAD 2022), Professor Wei Shaojun, Chairman of Integrated Circuit Aided Design Branch of China Semiconductor Industry Association, delivered a keynote report entitled "Win a Better Future through Continuous Innovation". According to the report, the number of local IC design companies in China has reached 3,243, increased by 15.4% (433) compared to 2,810 last year.
Such a large figure means that most of China's small and medium-sized semiconductor enterprises may face the fate of mergers and acquisitions in the next 10 years.
But Dong is optimistic, saying that competition in China's semiconductor industry is fierce now, but that is not a bad thing. "The most dangerous thing is that there is no competition. Only those who keep running hard and can go through the down cycle without collapsing will survive."
As for the reasons for the delay in large-scale mergers and acquisitions in the domestic semiconductor industry, Dong Guanbin believes that one of the reasons is that many start-ups are still in the "initial founder" stage, and these founders are generally young and still enthusiastic about their ideals, that is, to make their companies bigger and stronger. We can see that, in fact, many foreign companies were acquired under the promotion of investors after the founders retired at a certain age."
The second reason is serious homogeneity among local semiconductor enterprises. There are not many enterprises that are really innovating, so no merge is rewarding in a real sense. "The value of Thinkplus Semiconductor lies not only in mastering the basic technology, but also in keeping innovating. Many manufacturers regard making pin-to-pin products with foreign products as their way to survive, and we can also do that, but the innovation in market segments is the most important thing that domestic semiconductor companies need to do."
In the case of power ICs, Chinese companies that focus on such analog ICs are mostly small, but their demand for innovative ICs will continue as long as demand for related end-products grows. Different terminals have different cycles of IC innovation, so the consumer electronics industry needs to launch new products every year. However, in the industrial and medical fields, only one generation of products is launched every 10 years. "The need for analog ICs by all systems is changing, just at different speed."
As to whether Thinkplus Semiconductor has any merger plans in the short term, Dong said that the company is not considering merger or acquisition at present. "Let's just focus on what we need to do. We will plan some new products and businesses related to power management ICs."
As for the progress of IPO approval, which everyone is concerned about, he says that it is still on schedule. "IPO is an important milestone in the development of a company, but it is not the end". The timing of Thinkplus Semiconductor's listing could be influenced by a number of factors, such as the timing of economic recovery, the extent of its grip on new markets, performance and profit growth, and sustainable development. When all these factors come together perfectly, it may be the best time to go public.
"What running water cares about is not the first place, but the ability to flow endlessly. It doesn't matter to be listed earlier or later. The most important thing is to finish it at the right time," Dong said.
Outlook in 2023
All the companies across the semiconductor industry had a tough year in 2022 due to challenges posed by the downtrend in the market. But Dong Guanbin said that in fact, when predicting the future market changes in 2021, Thinkplus Semiconductor already had a certain accurate prediction for 2022, so the company's revenue and gross profit margin in 2022 reached the expected target despite the market volatility.
So what is the performance growth point in 2023?
The sales of mass consumer products such as mobile phones and personal computers are declining year by year, but taking some core products as the center will give rise to countless applications in affiliated industries, which can promote the development of new semiconductor technology. The most typical example is the new energy vehicle, which drives the development of a series of products such as portable energy storage, charging pile, automobile BMS and so on. Mobile phone derived products include power bank, TWS earbuds and a series of wearable devices.
"As long as the mainstream products of a certain industry are developing, it will drive the continual development of the products of its affiliated industries," Dong said, "Thinkplus Semiconductor is still optimistic about the growth potential of the wearable products market, which is our base. In addition, we will continue to develop integrated circuits related to new energy applications as always. At present, the field has achieved results and has begun to generate revenue." Thanks to the early research on these new applications and new markets, Thinkplus Semiconductor had new products that can be put into the market when the industry was just emerging.
The main new products of Thinkplus Semiconductor in 2023 are still related to battery applications, such as BMS ultra-high voltage, high current DC-DC, and coulometers with self-developed algorithm patents. Among them, the coulometer is mainly used in consumer electronics, such as personal computers, smart home products and so on.
Dong predicts that the electronics industry will rise from the trough in 2023. "Although the overall situation will be better than that in 2022, it will take time to restore the vitality of the market. I think that the real recovery will not be achieved until 2024 or later." For enterprises like Thinkplus Semiconductor, it is necessary to keep up with the pace of economic development and strengthen research and development in the downward period, so as to bring more good products to the market after the economic recovery. "We are now desperately running forward, just waiting for that time."
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