The “infrared forehead thermometer” has been on fire in the new crown epidemic. Lean on the forehead lightly, the forehead thermometer can measure the infrared light energy radiated by the human body, and then calculate the body temperature.
Behind the seemingly ordinary thermometer, the technology is not simple. How to capture infrared light sensitively? How to eliminate external environmental interference? How to convert infrared light energy information into body temperature information? These are the problems to be solved by the chip placed in the forehead thermometer.
Chipset Technology has played an important role in this epidemic prevention and control battle. The soaring demand for forehead temperature guns in a short period of time greatly tests the comprehensive capabilities of manufacturers’ technology, production capacity, and upstream and downstream cooperation. With the speed of producing hundreds of thousands of frontal temperature gun chips per day, Chipsea Technology has proved its strong strength in the field of signal chain chips that integrate perception, calculation, and control, and has contributed to the prevention and control of the epidemic.
Not only the smart health field represented by the forehead thermometer, Chipsea’s chips are also widely used in consumer electronics, smart home, and industrial fields, and are recognized by major customers in multiple industries such as Huawei, Midea, and Lexin Medical. In just two years, Chipsea’s revenue has reached 260 million, with a compound annual growth rate of 25.5%, and a net profit of 42.8 million, with a growth rate of 44.5%.
So, why can Chipsea Technology grow at such a high speed? How will Chipsea Technology breakthrough in the market monopolized by foreign manufacturers such as TI and ADI? Can it continue to maintain high growth in the future?
The bridge between reality and simulation world
ADC chip, a namely analog-to-digital converter, is the “eyes and ears” of the product, which can “perceive” natural analog signals, such as temperature, pressure, sound, images, etc., and convert them into a machine that is more readable and more convenient Digital signals for storage, processing, and transmission. It can be said that the ADC chip acts as a “bridge” between the real world and the analog world.
It is difficult to make chips, and it is even more difficult to make ADC chips. ADC chip manufacturing includes thousands of processes. In order to ensure the accuracy of the converted signal, the manufacturing process has strict requirements on the machine and the environment. With the continuous upgrading of products, the performance requirements of ADC chips have also been continuously improved. Compared with ordinary chips, the ADC chip update iteration speed is much faster, and it will go through a cycle in about 4-6 years.
In 1966, 33 countries, dominated by the West, signed the “Wassenaar Agreement”, which imposed export controls on high-end ADC chips, and China was not unexpectedly listed as an embargoed country. In the fields of high-end ADC chip services such as military industry, aerospace, industry, and automobiles, my country has been in a technology blank for a long time.
In the civilian field, currently, there are only 10 companies in the world capable of building ADC chips with high precision, low power consumption, and high conversion efficiency. Leading foreign semiconductors led by ADI and TI have monopolized over 80% of the market. For many years, my country’s weighing industry represented by mechanical scales and electronic scales has been unable to develop. The reason is that there is no ADC technology in China, and weighing instrument factories can only use imported ADC chips with a price of up to 70 yuan as upstream materials.
Fortunately, in recent years, Chipsea Technology and Shanghai Belling have gradually broken the monopoly of international manufacturers such as ADI and TI, filling the gap in domestic ADC chip technology. In 2007, Chipsea Technology took the lead in launching a high-precision ADC chip with an effective number of 21 digits, with performance comparable to TI’s series of products with the same parameters. This is the first time that a Chinese company has broken a foreign monopoly in the field of high-end weighing instrument chips, and reversed the passive pattern of the weighing instrument industry that is completely dependent on imports.
After taking the first milestone, Chipsea Technology has successfully launched a number of popular products. In 2011, the company once again broke through the accuracy of the ADC chip and increased the effective number of bits to 23.5, which is the leading domestic and international advanced level. On this basis, in 2018, Chipsea Technology launched the world’s first pressure touch chip using “micro pressure strain technology”. Compared with other chips of the same type on the market, micro-pressure strain technology chips have multiple advantages such as low power consumption, low cost, high integration, and small size.
The role of ADC chip “bridge” greatly enriches downstream application scenarios:
In the field of smart health, Chipsea Technology’s chips are widely used in body fat scales, forehead thermometers, clinical thermometers, sleep detection, and other equipment, with revenues of hundreds of millions. With the market foundation laid by hardware products, the company began to expand in the direction of the software. Chipsea Technology’s health management app “OKOK” connects to major health products such as body fat scales and bracelets, and provides personal health management services. Currently, it has attracted more than 5 million users and has been recognized by Huawei, Xiaomi, and other major manufacturers.
New features such as the pressure-sensitive home button, pressure touch screen, and virtual buttons on the side of the mobile phone are all where the pressure touch chip comes in. By sensing the strength of material surface deformation, pressure touch can achieve the effect of replacing physical buttons. Chipsea’s pressure touch chip uses special micro-pressure technology, which has higher performance and lower cost than other pressure chips, and is used in many star models such as Xiaomi, Vivo, and OPPO.
From 2017 to 2019, Chipsea’s pressure touch chip revenue rose rapidly from 920,000 to over 25 million, with an average annual compound growth rate of 422%. With the release of scale effects, the gross profit margin of this business has also increased significantly, from 48% in 2017 to 53% in 2019.
When the era of smartphone inventory is approaching, innovation has become an important means of competition. As new and innovative technology in the past two years, pressure touch is gradually replacing mechanical buttons and becoming the mainstream of development. As the penetration rate of pressure touch continues to increase, Chipsea Technology still has room for rapid growth in this business.
In addition, Chipsea Technology is also involved in the smart home, industrial measurement, and other fields. In 2019, Chipsea’s customized AS092 series chips reached tens of millions of shipments and were widely used in the field of human body induction lighting and security. Its industrial chips are also gradually mass-produced, with shipments exceeding 13 million pieces, gradually penetrating into the fields of weighing instruments, meters, and air pumps.
In the future, Chipsea Technology will continue to polish ADC chip technology to further expand its leading edge. The company plans to raise 175 million yuan to upgrade the pressure touch chip to overcome technical difficulties such as noise processing and resolution. In terms of market expansion, the upgraded chips will enter popular markets such as TWS headsets and gaming phones. In addition, the company also intends to raise 180 million yuan for the performance upgrade of smart health chips, so as to make every effort to move to the high-end smart health market.
The time is right for domestic replacement of MCU
Take the forehead thermometer as an example. In a very short time, to complete the process of converting the body temperature information contained in the infrared rays of the human body into the temperature digital on the display screen, it is not enough to have the ADC chip that converts the analog signal to the digital signal. The digital signal needs to be processed by the MCU chip, and then restored to an analog signal by the DAC digital-to-analog converter, and finally displayed on the screen in digital form.
Among them, the MCU chip serves as an indispensable “brain” role. It combines the central processing unit, memory, counter, etc. on a chip to form the smallest but quite complete computer system. This is also the origin of its other more vivid name-“Single Chip Computer”. With the “brain” of MCU to process and dispatch information, machine products are qualified to be called “intelligence”.
At present, the overall performance of my country’s MCU, the “brain” is still relatively low-end. Among the more than 40 domestic MCU companies, very few can truly produce 32-bit high-precision MCU chips, only Zhaoyi Innovation (603986) and Espressif Technology (688018). Most companies still stay on 4-bit or 8-bit general-purpose MCU chip technology, and their products are mostly used in smart homes and low-end electronic consumer products.
In 2019, the nine major foreign companies, led by Renesas Electronics and STMicroelectronics, accounted for 76% of my country’s MCU market. The high-end market where 32-bit MCU chips are located is almost entirely monopolized by foreign companies.
Chipsea’s MCU technology took the lead in taking root in the field of mobile power supplies. In 2014, the company launched the first MCU chip dedicated to mobile power in China, and in 2018 it was upgraded to a 32-bit MCU chip with a built-in USB3.0 PD fast charging protocol. Currently, its general-purpose MCU chips are widely used in consumer electronics fields such as mobile power supplies, car chargers, and electric toothbrushes.
From 2017 to 2019, Chipsea’s MCU chip performance has grown rapidly, with revenue rising from 39.35 million to 78.93 million, making it the second-largest product after health chips. Benefiting from the increase in sales of fast charging products, its gross profit margin increased from 28% to 34%. But overall, its product market share is far from that of international manufacturers, and it is also far behind the first-tier companies such as Zhaoyi Innovation and Zhongying Electronics.
MCU chip revenue scale
Under the trend of consumption upgrades, consumer products must have higher performance requirements for the MCU “brain”. Low- and mid-end MCU products have become increasingly unable to meet product “intelligence” needs. Chipsea’s future development goals are very clear: it plans to raise 189 million yuan for the development of high-performance 32-bit MCU chips. The company intends to focus on overcoming the difficulties of low-power management, build high-precision, low-power, and high-security MCU chips, and advance to the high-end MCU chip market.
A small chip connects the real world with the digital world closely. Chipsea has been committed to serving as such a “bridge” for 17 years of development. In terms of transforming natural analog signals into digital signals, Chipsea Technology is already a rare player in the country. Its chips are popular in many fields such as scales, mobile phones, and smart home appliances. As for the microcontroller unit MCU, Chipsea Technology sharpens its technology and wants to Conquer the high-end market. With leading technology, Chipsea Technology is provoking the localization of chips.