Ou Feiguang: It started because of the apple, and it fell because of the apple

Why was OFILM kicked out of Apple’s supply chain? How does Apple control the fate of supply chain companies through its strong industry influence?

Apple’s supply chain is like a chain with honey. Many companies take pride in entering Apple’s supply chain. The companies in it can take advantage of Apple’s industry advantages to develop rapidly, but they may also hand some of their “destiny” to Apple’s hands. , The future direction of the company lies within Apple’s thoughts.

Apple does not directly produce products, but hands the manufacturing and production of hardware parts to other manufacturers, which are also the so-called “Apple Supply Chain Enterprises.” They can be roughly divided into two types. The first is the foundry of various parts. For example, TSMC is responsible for the foundry of processors, the displays provided by Samsung and LG, and OFILM is responsible for mobile phone camera modules, etc., and then the manufacturing of the whole machine. In addition to being responsible for the production of some parts, a type of enterprise mainly assembles various modules, also known as the final assembly link.

Ou Feiguang: It started because of the apple, and it fell because of the apple

The mobile phone camera module can be regarded as a hardware integration, which includes not only the familiar image sensor (Sensor), but also the lens (Lens) and connector (Connector), etc. OFILM was responsible for several of the Apple mobile phone camera modules Part of the foundry and assembly.

Since being kicked out of Apple’s supply chain, OFILM has had more negative news. At the time when OFILM was kicked out of the supply chain by Apple, OFILM’s stock price began to continue to decline, and revenue declined in 2020. Recently, it issued a company announcement to announce the cancellation of OFILM’s subsidiary in Nanchang.

In the past, OFILM became famous because of its entry into Apple’s supply chain. With the help of Apple, the shipment of mobile phone camera modules once reached the world’s first place. This is in stark contrast to the current embarrassment of constant negative news. Why was OFILM being kicked out of Apple’s supply? chain? How does Apple control the fate of supply chain companies through its strong industry influence?

Success is also apple, failure is also apple

In 2016, OFILM officially entered Apple’s supply chain by acquiring Guangzhou Delta Imaging Company, which is mainly engaged in micro-camera modules and optical lenses. From 2018 to 2020, Apple has created a lot of revenue for OFILM. The revenue brought by Apple has increased from 8.33 billion in 2018 to 14.51 billion in 2020. After catching the express train of Apple’s supply chain, OFILM has entered a period of rapid development. , In 2019, the shipment volume of mobile phone lens modules ranked first in the industry.

Ou Feiguang: It started because of the apple, and it fell because of the apple

Before OFILM was officially removed from the supply chain system by Apple, the market was generally optimistic about the future development of OFILM. Smartphones have developed from single-camera to the current multi-camera system. The imaging capabilities of mobile phones have become the focus of competition among major mobile phone manufacturers , ranging from high-end flagship phones to 8,000 yuan to 8,000 yuan to 1,000 yuan to 100 yuan. The phone, without at least two or more rear cameras, seems to be embarrassed to prove that it is a new phone.

Judging from the 2020 financial report data released by OFILM, the development of OFILM after leaving Apple’s supply chain is not optimistic. The revenue in 2020 is 48.35 billion yuan, a year-on-year decrease of 6.97%. The net profit attributable to shareholders of listed companies is negative 1.945 billion yuan. It was 510 million yuan in the same period last year, a decrease of 481.39% year-on-year. In one year, OFILM went from profit to loss, which can be seen as a cascading effect after Apple moved it out of the supply chain.

There are many different opinions on the reason why Apple moved OFILM out of the supply chain system. First of all, OFILM’s technical strength has not reached the needs of Apple’s future development. Apple’s current 1200W pixel rear main camera has been used for several generations. It is reported that Apple will replace the new rear camera module with this year’s iPhone 13 series. The products did not meet Apple’s requirements, so they were removed from the supply chain system.

Ou Feiguang: It started because of the apple, and it fell because of the apple

Another view is that after OFILM was included in the “Entity List”, Apple had to move OFILM out of its supply chain system, so that iPhone production would not be affected by external factors.

The process by which Apple removes OFILM from the supply chain is like the first needle to pierce a balloon. The vanity and beauty on the surface disappear in an instant. Ophelia light by the addition of Apple’s supply chain and rapid development, but also because after leaving Apple’s supply chain from surplus to deficit, success or failure in between Apple’s an idea, it also gives Apple supply chain companies a warning, with this in In the yoke system of honey, it is necessary not only to take advantage of Apple’s rapid development, but also to improve its irreplaceability, optimize its own industrial layout, put eggs in more baskets, and reduce dependence on apples.

Technical strength is the real umbrella

Apple supply chain companies can be divided into many types according to different types. Some provide high value-added parts and make high profits every year, and some provide high-precision product OEMs, which are extremely irreplaceable. In Apple’s supply chain Belonging to the core circle layer, not only the added value of products or services is extremely high, but also has sufficient bargaining power with Apple. Some companies only participate in the foundry process with low added value. This type of company often has many substitutes in the industry. Apple will implement a price reduction strategy for this type of company, or suppliers will actively reduce products in order to stay in the Apple system. price.

Ou Feiguang: It started because of the apple, and it fell because of the apple

According to the “Announcement Regarding the Reply to the Inquiry Letter of the Shenzhen Stock Exchange’s 2020 Annual Report” issued by OFIL, the gross profit margin of OFIL and Apple’s business is about 8%, which is lower than the company’s overall gross profit margin of about 10%. At the same time, in the overall revenue of OFILM, the proportion of revenue brought by Apple has increased from 19.35% in 2018 to 30.01% in 2020, and OFILM has become more and more dependent on Apple.

From the perspective of the supply chain system, the lens modules provided by OFILM are not irreplaceable. OFILM relies on upstream suppliers to provide components, including refined polished plastics and glass. The specific suppliers include Corning and Xiao special and electric Glass and other companies, which hold a large number of core technology, which is in the upstream supply chain players.

Ou Feiguang: It started because of the apple, and it fell because of the apple

After OFILM was included in the “Entity List”, OFILM’s procurement of foreign components was affected, and it was unable to produce substitute products of the same quality by itself, which was one of the reasons why its stock price plummeted.

No matter which supply chain, there are basically upper, middle, and downstream points. The more irreplaceable it goes up, the more it is affected by fluctuations in the upstream industry chain, and the bargaining power is often the weakest. With reference to TSMC and Samsung, one provides iPhone chip foundry and the other provides OLED screens, both of which belong to high value-added categories. Players in this segment tend to have strong technology and extensive industrial layout, and will not cause too much influence on themselves due to the lack of a certain customer. .

But it should also be noted that any link of the industrial chain may be replaced, and replacement refers to not only replacing another supplier, but also the manufacturer’s own technology replacement. Apple has done similar things in the past.

Imagination is a chip designer based in the United Kingdom and a technology provider for the GPU part of Apple’s A-series chips. MediaTek has also used Imagination products, such as the PowerVR in the Helio X10 processor, before the large-scale use of the public version of the Mali architecture. G6200 GPU.

Ou Feiguang: It started because of the apple, and it fell because of the apple

Imagination began to cooperate with Apple in 2007 when the first generation of iPhone was launched. In 2017, Apple A11 began to be equipped with self-developed GPU architecture and officially abandoned Imagination. At that time, Imagination, like Ou Feiguang, had its share price plummeted all the way, with a decline of 75% that day. This fully shows that even the upstream technology vendors in Apple’s supply chain system may be replaced. Only strong technical strength is their own. The best umbrella.

Entering Apple’s supply chain does not mean that it can lie flat. Before the release of the M1 processor, no one thought that Apple would replace Intel with a self-developed chip , and begin to abandon X86 on the PC side and make strides towards the ARM architecture. The current international environment is full of many uncertain factors. OFILM’s departure from Apple’s supply chain is caused by multiple factors. For OFILM, this crisis may be an opportunity to bottom out and rebound. Increase R&D efforts and embrace more mobile phone manufacturers. , Apply their accumulation in mobile phone camera modules to the field of unmanned driving, and may reach a higher industry height in the future.

 

Posted by:CoinYuppie,Reprinted with attribution to:https://coinyuppie.com/ou-feiguang-it-started-because-of-the-apple-and-it-fell-because-of-the-apple/
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