Global Electric Drive IC Second Brother Yili-KY has obtained the technical authorization of the joint development department T-CON technology, extending the war to non-drive ICs. In addition to avoiding the Red Sea market, it also has the opportunit...
Global Electric Drive IC Second Brother Yili-KY has obtained the technical authorization of the joint development department T-CON technology, extending the war to non-drive ICs. In addition to avoiding the Red Sea market, it also has the opportunity to maintain operation growth under the tax storm.
IC Design Dragon Head Joint Development Technology's investment is the world's second largest driver IC company. According to the report of the "Financial Information" double-week issue, Liang Gongwei, founder and former chairman of Morningstar Technology, joined hands with the former Yili Technology team to re-list. Morningstar, created by Liang Gongwei that year, is a TV chip Dragon Head, and has won the "Small Joint Development Technology" name. The leader's re-launched this time has attracted high attention from the market.
Yili is reappearing" strategy of turning aside
It is worth noting that at the end of April this year, Yili officially purchased the T-CON (time control chip) asset and technical license of Joint Development Technology for US$150 million, and is expected to start to make profits in May. This purchase case is regarded as the starting point for the company to expand its "non-drive IC" line, which is the driving force behind the sudden outbreak of growth in this wave of tax storm.
Yili, originally named ITH-KY, was formerly Yili Technology. It was listed in Fengguang in 2011. In 2016, it was officially merged and removed from the market for cash of 3.66 billion yuan. In the following 18 years, Yili Technology divided and merged the contact products into Yili, so that it also had two core technologies, namely touch control and driving IC. The next year, ITH was established to introduce external funds. In 2020, Joint Development Corporation sold ITH to private equity fund Dongbo Capital, and Dongbo Capital continued to transfer its shares to strategic shareholders. Even so, Joint Development Corporation is still Yili's largest shareholder, holding about 11.91%.
In February this year, Yili issued a re-issue announcement that it had obtained T-CON related business assets and technical authorizations under Joint Development Corporation for US$150 million, but did not include relevant technical team members; however, after this transaction, more than 10 T-CON teams of Joint Development Corporation have joined. This NT$4 billion acquisition case plays an important role in diversifying the company's operating risks.
If you have completed Yili financial reports, you can see that the company's revenue from Chinese mobile customers accounted for 70%. "In order to enable the company's revenue sources to achieve a relatively healthy proportion, we are about to expand the markets of electronics, vehicle use and industrial control." When Yili Chairman Liang Gongwei accepted the "Financial Information", he directly pointed out the real purpose of this purchase.
According to the report of the two-week issue of "Financial Information", Yili General Manager Chen Taiyuan also revealed that "through the combination of T-CON and driver IC, the company has ranked second in the global driver IC market in the past, hoping to challenge the dragon head again." This ambition has long been deployed in advance. "As early as 2 or 3 years ago, we had already started cooperation with Joint Development Technology until the company was listed last year, and the technology was officially transferred faster." He said.
"In addition to the world's number one in the computer graphics challenge, T-CON can also expand the application of other products such as vehicle and industrial control." Chen Taiyuan therefore affirmed that the proportion of mobile application revenue will drop to less than 60%.
It is understood that the T-CON business of CT Technology is about 2 billion yuan per year, mainly supplying computer and monitor applications. Don’t look at this kind of revenue, which only accounts for about 10% of Yili’s business last year. Chen Taiyuan emphasized that with the technology of the T-CON, the development of non-driven IC product lines will be accelerated. At present, it has provided an integration solution that integrates driver IC and T-CON to improve the integrity and competitiveness of laptop and electronic products in response to the requirements of narrow frame screen design of laptop and electronic customers.
Of course, through this merger, Yili can obtain existing technologies, teams, equipment, inventory and related assets and customers, and can expand the market share outside of the computer, such as vehicle and industrial control markets more quickly.
Joint Development Department Assistance" takes the lead in the market
Yili and Liang Gongwei have been in a good position since the re-listing. In the same year, the Morning Industry Association merged with Yili Technology, the parent company was Morning Industry Technology created by Liang Gongwei. Liang Gongwei revealed when he was interviewed by "Financial Information" that the original plan wanted to retire after the joint venture announced the purchase of Morning Industry in 2012. However, because the Chinese Ministry of Commerce delayed the merger of the two companies until 18 years, he approved the merger of the two companies. During this period, he was still the chairman and general manager of Morningstar. After Morningstar acquired Yili, he was still responsible for the management of Yili. The implication is that he is not unfamiliar with the business of Yili.
He also pointed out that after the joint venture sold Yili's shares to Dongbo Capital, he was soon delayed by Dongbo Capital to take over Yili's position as Dongbo Capital. "In fact, I was unable to officially retire, so I had the opportunity to witness Yili's process of being purchased from the joint venture group and growing along the way." He said with a smile.
Liang Gongwei believes that the idea of operating Yili is completely different from that of Morning Star, which is mainly operating TV chips in the past. "Unlike the main TV chip, there are many driving ICs, such as the size, application, and panel materials, so there are many places to be discovered. You can always stand at the top three IC design companies in Taiwan. You can see that the market is large in scale."
However, he also observed that among the players who drive the IC market, there are often future generations who will enter the military market. To survive, you must have real skills. Liang Gongwei recalled that several versions of the products developed by Yili would need to be modified to use them to measure production. After being integrated into the joint development department, after the solid product design process, the basic skills have been practiced, and you can measure production by almost one version.
As early as Yili Technology, the cooperation between Yili Technology and Yili has been effective many times. Liang Gongwei recalled that about 16 years ago, the market demand changed from DDI (display drive IC) to TDDI (touch and drive integrated chip) that integrates touch functions.
"At that time, the joint venture happened to master the touch control IP (Silicon Intelligence Finance), and hit it off with Yili's driving IC, quickly launched the TDDI product, successfully defeating the market first, Yili also defeated the order of the top five mobile phone brands in China.. "Mr. Liang said bluntly: At that time, the market was in short supply. We took advantage of this gap to penetrate the market, orders were flooded, and the industry performance and shipment volume quickly surpassed the car.
Later, OLED (organic light-emitting diodes) began to become popular in 2019. Yili cooperated with panel manufacturers to develop new driving IC products, and grasped customer and sales volume, and once again successfully drove supercars.
With the achievements of joint research and development several assists, Liang Gongwei expected, "In addition to the recording, the next growth engine is used in the car." He said, "Although Yili is entering the car late, this is because the product verification cycle is relatively long. At present, the relevant solutions have gradually increased in volume, especially in the future, the screen for a car will grow from one piece to three pieces, and the market has deep growth potential."
"Bao AI" drives the hot trend of converters
Finally, Liang Gongwei is optimistic about the dynamic energy of AI-promoting PCs and mobile phones, and the demand for driving and non-driven ICs will be synchronized. The "Financial News" double-weekly pointed out that at present, Yili has developed a driver IC that integrates algorithms, so that the screen display can be completed faster according to users' preferences, such as color temperature, screen style, etc., to reduce the computing power demand and power consumption of the central processor. It is expected that the first terminal product will be an OLED flagship mobile phone.
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