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Up 30%, Goodix GT9 series price increases, how hot the touch chip market is

The end of the year is approaching, and the price hikes in the semiconductor industry have come too abruptly. Previously, OFweek Electronic engineering network had reported the news that semiconductor companies such as Renesas, NXP, ST and other semiconductor companies were out of stock and price increases. Many industry insiders have said, “If you increase, I will increase. I really don’t know who will be the next price increase.”

Recently, Goodix Technology, a major domestic touch IC manufacturer, issued a product price increase notification letter on December 28, announcing that from 0:00 on January 1, 2021, the US dollar prices of all GT9 series products will be uniformly increased on the basis of current prices. 30%.

(Notice of Price Increase of Goodix Technology Products)

Goodix Technology stated that although upstream suppliers such as fab-level packaging and testing have increased their prices significantly since October, Goodix has never increased product prices in order to share cost pressures for customers. This price increase is the reason, and it is also difficult to withstand the pressure of the upstream price increase that has caused the production cost to rise sharply. For the stability and continuity of product supply, Goodix decided to make the following adjustments to the selling price of GT9 series products:

1. The price of all products in USD will be increased by 30% on the basis of the current price.

2. The above adjustment plan will be implemented at 0:00 on January 1, 2021, that is, the new price adjustment plan will be applied to the shipment orders of our system from 0:00 on January 1, 2021.

3. Starting at 0:00 on January 1, 2021, all orders received before but not delivered will be resent by the agent for application. After the above adjustment plan orders, our system will make corresponding price changes.

Due to the sudden incident, Goodix’s price increase news quickly spread throughout the semiconductor circle. Many rumors said that Goodix will raise the price of all products by 30% on January 1, 2021. This also attracted Goodix. An urgent clarification announcement was issued, saying that it was based on the supply situation and only made price adjustments for the sales prices of some of our touch products GT9 series. Our company has not made price adjustments for related products of other product lines; nor has we issued price increase notices to agents and customers related to other product lines.

According to OFweek electronic engineering network, Goodix Technology is engaged in the research and development of intelligent human-computer interaction technology. At present, the company’s main products are capacitive touch chips and fingerprint recognition chips, in addition to fixed telephone chip products.

It is understood that Goodix Technology has been engaged in the research and development of intelligent human-computer interaction technology. In 2006, the company developed a capacitive touch button chip based on the previous fixed telephone chip research and development experience; in 2007, it began the research and development of capacitive touch chip, and developed engineering samples in 2009. In 2010, it realized small batch production and Sales. With the rapid development of smart terminal markets such as smart phones and tablet computers since 2011, the company’s capacitive touch chip sales have rapidly increased, and the proportion of fixed phone chip sales has declined. In 2014, the company developed fingerprint recognition chip products and successfully achieved sales, further enriching the product line.

Nowadays, Goodix’s capacitive touch chips are mainly capacitive touch chips, which are widely used in the control of smart terminal touch screens such as smartphones, tablets, and navigators. In addition, there are a small number of capacitive touch button chips used in MP3, Button control of terminal products such as MP4 and household appliances.

From the “Goodix Technology Initial Public Offering Prospectus”, it is known that the GT9 series is the third-generation capacitive touch chip launched by Goodix Technology at the end of 2012. This series of products adopts a 0.11um process and has more than 120 The signal-to-noise ratio is more than two times, with a full-screen drive scan mode, which can support active capacitive pens, etc. It is mainly used in mobile phones, tablets and ultrabook markets.

(From Goodix Technology Prospectus)

For the price increase of the GT9 series, Goodix Technology stated in the notice that the reason is that it is difficult to withstand the pressure of the upstream price increase that caused the production cost to rise sharply. For the stability and continuity of the product supply, it has decided to make a decision on the price of the GT9 series. Adjusted up by 30%.

As we all know, the surge in semiconductor prices is not an individual phenomenon, but a common problem faced by the entire industry. Since October, upstream suppliers such as fab-level packaging and testing have increased their prices significantly, which has implicated the joint price increase of mid- and downstream chip suppliers. Goodix Technology stated that in order to share cost pressures for customers, the company has never raised product prices before.

(The screenshot is from Goodix’s 2020 third quarter report)

According to Goodix’s third quarter report of 2020, the company’s operating income during the reporting period was 5.128 billion yuan, a year-on-year increase of 9.62%; net profit attributable to shareholders of listed companies was 1.10 billion yuan, a year-on-year decrease of 35.75 %.

According to the announcement, the global outbreak and spread of the new crown epidemic in the first three quarters of 2020 has affected many countries to varying degrees at different times. Affected by factors such as the new crown epidemic and changes in the international situation, the company’s revenue growth has slowed. The continuous investment in research and development of new products has led to a continuous increase in research and development expenses, resulting in a year-on-year decrease of 35.75% in net profit.

Regarding future performance expectations, Goodix Technology stated that the impact of the new crown epidemic in the fourth quarter and the international economic situation still has great uncertainty on the company’s performance. It is predicted that the cumulative net profit at the end of 2020 may decrease compared with the same period last year. .

The touch chip market is booming, and the price increase may be related to wafer production capacity

In recent years, with the improvement of the controllability of electronic devices and the development of electronic technology, the application of touch screen technology in mobile phones, tablet computers, PMPs, navigators and other electronic devices has developed by leaps and bounds. In addition, touch screen technology is used in education, finance, Applications in industries such as industrial control are also developing rapidly.

Driven by the continuous release of global capacitive touch screen market demand, the capacitive screen touch chip market is heating up rapidly, and is widely used in smart phones, tablets, MP3, MP4, PMP and navigators, among which smart phones and tablets occupy main part. Especially after the iPhone 5S launched the fingerprint recognition function in 2013, the mobile phone market changed. Samsung, Huawei, Xiaomi and other mainstream smart phone manufacturers have gradually introduced smart phones that support fingerprint recognition.

It is reported that this round of touch chip price increase is not only due to insufficient supply due to the surge in market demand for mobile phones, tablets and ultrabooks, but more reasons may be related to the previous shortage of wafer production capacity. The utilization rate of pure foundry plants such as TSMC, Samsung, UMC, Advanced World, and SMIC have maintained high levels. China Resources Micro, Silan Micro and other 8-inch and below 8-inch production capacity are also fully loaded.

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