On February 28, 2020, the A-share market was the first semiconductor company to surpass a market value of 100 billion yuan --- Huitian Technology surged to 388 yuan on the same day! The market value of more than 170 billion! But that after the top of the technology on the way down - of course, this decline is an objective reason, because the top of the technology fingerprint identification products do too good, 99% of the world's cell phones are used in its fingerprints, it is really "success is also Xiao He defeat is also Xiao He", so when the global cell phone market began to shrink, the market value of a substantial shrinkage - to March 15, 2021 Huitian Technology officially announced that Ms. Hu Yuhua (Sandy Hu), former vice president and president of Texas Instruments in China, has become the company's president (see "Just! TopTech Announces Ms. Sandy Hu as President of TopTech!) When the stock has fallen to about 140 yuan, the market value shrunk to 60 billion!
After that official announcement, Hu Yuhua's stock didn't fall as fast as before, but entered a long period of consolidation, and the industry and capital are paying close attention to Hu Yuhua, what kind of strategy will Hu Yuhua set for Hu Ding? Can you drive the top of the technology to revive the glory of the past?
On August 27th, half a year after assuming her new position, Ms. Hu Yuhua made her debut to the media and analysts. During the investor technology financial report conference call for the disclosure of the first half of the year 2021 of Huitian Technology, she interacted actively with analysts and the media, and disclosed Huitian's future strategic direction.
First, how do you think about Huitian's earnings report?
In this conference call, Huitian Technology CFO Hou Xue Li first introduced Huitian Technology 2021 first half of the financial situation, according to him, the first half of 2021, Huitian Technology realized operating income of 2.91 billion yuan, compared with the first half of 2020 3.056 billion yuan year-on-year decrease of 4.78%, which he explained is mainly due to the iteration of the old and new products, Product sales structure changes, exchange rate fluctuations and other impacts.
In the first half of 2021, Huitian Technology realized gross profit of 1.424 billion yuan, compared with 1.578 billion yuan in the first half of 2020, a year-on-year decrease of 10%; the first half of 2021, the integrated gross profit margin of 49%, compared with the same period in 2020, a year-on-year decrease of 52% of 3 percentage points, the whole is in a reasonable fluctuation range, to maintain a good profitability.
From the above data, Huitian Technology's revenue did not appear like other companies more than 100% growth instead of declining, many people are very strange Huitian Technology why did not enjoy the dividends brought by the chip shortage? It is understood that this is mainly the top of the chip shortage of technology, and did not raise the price of the product significantly, so in the case of upstream manufacturing, packaging and testing links continue to rise in price, the top of their own independent bear the pressure of rising costs, which is very worthy of praise.
In addition, even if the revenue decline, the top of the sink in the R & D investment does not reduce but increase in the first half of 2021 R & D expenses of 899 million yuan , compared with the first half of 2020 835 million yuan year-on-year growth of 8%, R & D expenses accounted for the proportion of operating income of 31%! Compared with 27% in the first half of 2020, an increase of 4 percentage points. Such a large investment also shows the top of the active transformation of the determination and action, as well as adhere to the long-term commitment to R & D investment, in addition to R & D accounted for as high as 31%! This ratio is very high in the world!
Hou Xue Li said that despite the short-term performance fluctuations, Huitian is still focusing on long-term development, insisting on investing in the development of new technologies and new products, and has begun to gradually launch new products and their mass production, and continue to bring new value and experience to the market and customers.
He revealed that Huitian's innovative products in the IoT and voice and audio categories have grown rapidly in the first half of 2021, and now account for 15% of its main operating revenue, an increase of 7 percentage points over the same period in 2020 - it should be said that the transformation has begun to bear fruit. And Huitian's first system-level NB-IoT single-chip solution that fully supports 3GPP Rel-14 and Rel-15 standards has now entered the commercial promotion stage, and is expected to be available for large-scale supply in the fourth quarter of this year. For more details, please refer to "Huitian Technology's NB-IoT single-chip solution is here!
Second, Hu Yuhua talked about Huitian's strategic layout
"Today's Huitian is in an important stage of transformation from a single product to a comprehensive IC design company, Huitian is not only the world's leading fingerprint and touch solution, but also the world's leading audio solution provider and IoT solution provider. I hope to lead the company to success. I hope to lead the successful transformation of Huitian Technology and operate Huitian as a globally recognized semiconductor design company, starting with global team integration, product planning, marketing, and customer relations." Hu Yuhua revealed the future goals of Huitian in response to analysts' questions, and she also stated that Huitian's investment in new technologies is for the long term, "Throughout the global chip industry, Huitian's R&D investment ratio is very leading, and the development of technology requires patience and the ability to tolerate the team's trial and error as well as constant error correction. From my past work experience, some IPs take 5 years or more to accumulate, and highly innovative technologies even take 10 years to become profitable. Huitian's success in under-screen optical fingerprints tells us that with the strategic thinking of long-termism, adhering to R&D investment and technological innovation instead of focusing on short-term benefits, we will definitely be able to make high-performance products recognized by customers and with good market returns."
In addition, she also said that if she encounters a problem during the R&D process, Huitian also has a complete R&D project management system, which rationally sets milestones and integrates resources to overcome the problem to ensure a better result orientation.
And she talked about an important trend that HomeTop has reached the stage of collaborative innovation , "In the long-term investment, the technology and experience accumulated in the past is the basis for future development. As the company's accumulation of technology becomes broader and deeper, product synergy will gradually manifest itself, and differentiated products will be more abundant. Taking the TWS SoC chip to be launched by Huitian as an example, we have acquired very good audio hardware and software IP through the acquisition of NXP's team, which has been applied to wireless audio products to develop very advanced noise cancellation algorithms to provide realistic sound quality. Huitian has been accumulating RF technology for nearly 5 years, and we have applied our leading RF technology to the TWS SoC chip to enhance its low-power performance; in addition, the RF technology is quite widely used, and the RF team will provide the appropriate support when needed by the company's other products or technical teams*** to enjoy the IP," she emphasized.
At present, the semiconductor talent war is intensifying, the past few years, Huitian Technology has attracted a large number of international semiconductor companies work experience top talent to join in retaining talent, Hu Yuhua said that the salary and equity incentives are the means of retaining talent, but not the only means. "We need to create good conditions to attract global talents and build a complete talent training system and talent retention system. Through competitive compensation and benefit packages, culture building, leadership enhancement and other comprehensive programs to retain talented people, we are very confident that our employees will enjoy their work at Huitian and thus gain rewards and a sense of achievement." She said.
After working in Huitian for half a year, she believes that Huitian has three main advantages:
(1) Customer-centered, establishing long-term deep cooperation with key customers. Quick response to customer needs and flexibility are the reasons why we are highly recognized in the market.
(2) DNA of independent innovation and technology accumulation. Huitian has always insisted on independent innovation, and has accumulated very solid R & D strength. The semiconductor industry is the need for long-term accumulation, accumulation, the more difficult technology requires a longer period of accumulation, once the breakthrough will greatly enhance the long-term competitiveness of the company.
(3) Open culture and global vision. The globalization layout of Huitian can attract more excellent talents around the world and reserve enough development power for the company to achieve long-term strategic goals.
And her global strategic planning and layout for Huitian is generally divided into three blocks:
(1) Globalization of customers: the company has not only domestic customers, but also customers in South Korea, Europe, the United States, etc. Only by letting the global customers use Huitian's products, Huitian is a truly global well-known semiconductor company.
(2) global diversification of the market: in addition to the cell phone market, in the car, IoT field to achieve globalization breakthrough. For example, the NB-IoT product released last week is the world's first NB-IoT chip with integrated security algorithms; the program has been certified by China Mobile, China Telecom, and Deutsche Telekom, and is able to further expand the overseas market. In the future, the company will continue to develop more overseas customers and markets.
(3) Globalized team: We want to build a better globalization platform, operation system, and talent management system to attract more global semiconductor talents to join us.
At the specific tactical level, she said that Huitian is always oriented to customer needs and develops products with the purpose of solving customers' problems. "As long as we can provide competitive products and solutions to help customers solve their problems, we will be recognized by customers and our market share will naturally increase." She emphasized, "At present, Huitian will still focus on acousto-optic sensing technology, signal processing technology, wireless connectivity technology and information security technology to carry out in-depth layout and comprehensive extension, the company's strategic layout is still focused on new products."
She said that there is still a lot of room for optimization and innovation of under-screen optical fingerprints, and Huitian will also invest in R&D resources to upgrade and ensure product competitiveness. Huitian's goal remains unchanged, which is to maintain its leading position in the global market.
She emphasized that the side fingerprint recognition solution introduced by Huitian has a great advantage in enhancing the screen-to-body ratio of cell phones, and has been affirmed and trusted by customers due to its excellent unlocking speed and security. From the market trend, it is expected to replace the rear fingerprint identification program in the future.
"Whether it is capacitive fingerprint, under-screen optical fingerprint, ultra-thin fingerprint, or side fingerprint, we will continue to dedicate ourselves to providing comprehensive fingerprint identification solutions for customers to freely choose, thus further increasing Huitian's market share in the fingerprint identification field." She pointed out, "At present, Huitian maintains a gross profit margin of around 50%, which we believe is still within reasonable expectations. In terms of supply chain, we have not increased prices due to capacity constraints, the company adheres to the long-termism strategy, maintains long-term strategic partnerships with customers, maintains relatively stable prices, and therefore also receives positive feedback from customers."
She pointed out that IoT is a very broad field, with consumer, industrial, and artificial intelligence IoT, etc., and what Huitian wants to do is to always provide solutions around customer needs. "In the case of Huitian, the company's products include traditional Bluetooth, low-power Bluetooth, as well as technologies that specifically support low-power Bluetooth audio, and now it has also introduced long-distance connectivity technology, NB-IoT. no matter which connectivity protocols and standards are in place, we have a great solution for them, and as long as we do that, Huitian will definitely be able to become a major player in the IoT market. " She said confidently.
According to IDC's "China Wearables Market Quarterly Tracking Report, Q2 2021," China's wearables market shipped 36.14 million units in Q2 2021, up 33.7% year-over-year. Among them, the ear-wear device market shipped 19.96 million units, up 58.2% year-on-year.
IDC's report shows that the wearable market will enter a period of structural adjustment from the "volume era" to pay more attention to the product experience and user conversion, so high-quality multi-functional solutions will be favored by manufacturers, where the layout of Huitian's layout has seen results.
Personally, I think the most important thing in the IoT field is the connection and perception, and Huitian has completed the key technology layout in this field.
And as Hu Yuhua said, Huitian's fundamental research in RF makes Huitian's Bluetooth solution outstanding.
Huitian's wearable IoT solutions have been adopted in large numbers, mainly in the following areas: in the field of watches and bracelets, Huitian's health sensors, low-power Bluetooth and other technologies have been commercialized on a large scale; in the field of TWS headphones, the two-in-one chip for in-ear detection and touch control, and the chip for the ANC active noise-canceling codec have been commercialized on a large scale, and in particular, in the field of audio, Huitian has obtained through the acquisition of In particular, in the audio field, Huitian has acquired high-quality audio technology inherited from Philips and NXP through acquisition - the technology is adopted by Samsung, Huawei, OPPO, Vivo, Honor, One Plus and other first-tier Android brand cell phones. After Huitian acquired the technology and the team, Huitian Technology miniaturized the design of the smart audio technology with solutions such as noise suppression, combined with advanced algorithms of neural network and deep learning, to eliminate noise and echo interference, and to improve voice recognition and call effects, which will have a wide range of application areas in the future.
Therefore, Hu Yuhua said: "Compared with the past, we are more confident: First, the company has established a very deep cooperative relationship with domestic and foreign mainstream customers and key partners in the supply chain; second, the semiconductor industry market is very broad, no matter whether it is the first to enter or the second to enter, as long as the company's products have a differentiated value, there are market opportunities; third, the company's professional team can be very fast and flexible in order to improve the quality of the product, and the company's products can be used in the market. professional team can respond very quickly and flexibly to provide customers with quality services."
Third, to the local IC design company's three recommendations
Hu Yuhua used to work in TI for many years, starting from sales until the president of the China region, and now, she joined the local first-class IC design companies, in the author asked if she could give some advice to the local IC design companies, she mentioned three points: 1, the product layout: Most of the domestic IC companies start from a single product development, the scale is relatively small, but there is a lot of room for development. 2, technical capabilities: China's semiconductor industry started late, the technical reserves still need to be improved, so you need to be quiet to precipitation and accumulation of their own technology. 3, talent: the industry is in a period of rapid development, the need for a lot of good talent. On the one hand, we need to attract experienced talents to join us, and on the other hand, we also need to build a better talent training system, so that we can create our own blood and cultivate our own experts and talents!
Recently, more and more semiconductor high-precision talent with international experience in large companies began to flow back to the local IC design companies, the return of this advanced technology to the local IC companies with product development experience and advanced management concepts, coupled with the local alternative to the hot in the last two years, to seize the opportunity of the local IC companies will usher in a new round of great development! Maybe after three years to see the top, we will have another feeling! (End)