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The fingerprint chip leader Goodix recorded a surprising loss in Q1 2022

Updated: Apr 28, 2022

On April 26, the fingerprint chip leader Goodix disclosed its 2021 annual report and 2022 first quarter report. The company's performance showed a cliff-like decline. In the first quarter of 2022, there was even a rare loss among chip companies. These signs all show that the road to transformation of Goodix is still difficult.

Goodix' 2021 revenue and net profit is 5.713 billion RMB and 721 million RMB, down 14.57% and 47.51% year-on-year, respectively. In the first quarter of 2022, the company's revenue was 874 million RMB, a year-on-year decrease of 38.39%; the loss was 30.3429 million RMB.

In terms of products, affected by the decline in Huawei's mobile phone market share and intensified competition, the revenue of fingerprint chips, the main product of Goodix, fell by 28.14% year-on-year, and the gross profit margin fell by 5.66%; the touch chip revenue increased by 7.46% year-on-year, and the gross profit margin fell by 3.52%. Other chip business revenue representing the direction of transformation increased by 67.58% year-on-year, and gross profit margin increased by 1.97%.

Goodix's other chips include multi-functional interaction sensor chips and audio decoding chips for TWS headsets, health sensor chips for smart bracelets/watches, light sensors and ToF sensors mainly for smartphones, and sensors for the Internet of Things. Bluetooth low energy and NB-IoT chips, etc. Among them, the shipments of three chips of multi-functional interactive sensor, health sensor and audio decoding increased rapidly year-on-year.

In addition, compared with the 2020 annual report, Goodix mentioned three new chip products. At present, the NFC chip and eSE security chip have passed various security certifications in China and abroad, and are about to enter the commercialization stage; TWS SoC is being developed, which means that Goodix will also compete with TWS headset main chip manufacturers in the future.

Although other chip businesses have grown rapidly and their revenue share has risen from 8.13% in 2020 to 15.94% in 2021, it is still difficult to affect the overall situation.

Goodix' fingerprint sensors have been utilized in over 260 smartphone models

Therefore, the ups and downs of mobile phone sales are still the key to determining the growth of Goodix. The latest report from data agency Canalys in April showed that global smartphone shipments fell by 11% in the first quarter of 2022. According to data from the China Academy of Information and Communications Technology, domestic smartphone shipments totaled 47.886 million units from January to February this year, a year-on-year decrease of 22.6%. In this situation, the company's first-quarter performance declined sharply.

Goodix pointed out that the company is fully invested and deployed around the four core technology fields of "sensing, computing, connection, and security". In theory, these four core technologies can be combined to form new solutions, which is the main means for Goodix to get rid of their dependence on a few products. However, at this stage, there are few reusable parts between these four core technologies, and the company has to spread its R&D forces on four battlefields, making it difficult to form a single-point breakthrough. Under the sharp decline in revenue, this R&D strategy will continue to suppress profitability. In the first quarter of 2022, the company's R&D expense ratio has reached as high as 39.26%. The inflection point of Goodix has not yet come.


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