China’s Goodix Technology, a developer of fingerprint identification chips for Android smartphones, plans to acquire 100% of display chip design house Viewtrix Technology.
Shanghai-listed Goodix is looking to acquire all of Viewtrix from its management team and shareholders, including venture capital (VC) companies such as HongShan, Qiming Venture Partners, and Vertex Ventures China, through a combination of cash and stock payment, Goodix disclosed in its latest stock exchange filings.
The filings show that Goodix’s board of directors has approved the proposed acquisition. But the pricing and financial details of the deal have yet to be decided.
Viewtrix, founded in 2012, made it to the Global Unicorn Index 2024 by the Hurun Research Institute with a valuation of $1.2 billion as of April 2024.
Vertex Ventures China; and Orinno Capital, a state capital investor in China, jointly invested in its latest funding round this September, said Viewtrix in a September WeChat post. The Chinese chip unicorn did not disclose how much it raised from the earlier deal, except that its capital reserve crossed 1 billion yuan ($137.4 million) following the investment.
In the post, Viewtrix estimated to deliver 55-60 million OLED (organic light-emitting diode) display driver chips — a core component for switching and display control functions — to its smartphone clients within this year.
While the acquisition will take time, HongShan currently holds a 6.33% stake in Viewtrix through “HSG Venture VIII,” the highest only after the firm’s management team. Qiming follows with a 5.69% stake through “QM119 Limited,” according to Goodix’s filings.
Other existing shareholders include smartphone maker Xiaomi Corp, Huawei Technologies’s Habo Investment, display panel maker BOE Technology, and US chip designer Qualcomm’s China arm.
Shenzhen-based Viewtrix mainly develops AMOLED (active matrix organic light emitting diode) display driver chips used in smartphones and micro OLED display driver chips for VR/AR smart wearables.
Goodix expects the market penetration of the new-generation AMOLED technology in smartphones to “continuously rise” and the micro-OLED technology to experience “explosive growth” with the maturing VR/AR applications, said the firm in one of its filings.
It explained the reasons behind this acquisition: “A few suppliers outside of mainland China [including South Korea and Taiwan] currently dominate the domestic market of OLED display driver integrated circuits (DDICs). The target company [Viewtrix] is one of the few mainland Chinese players to have successfully entered the market with mass-produced, commercial DDICs supplying to branded smartphones.”
Viewtrix has more than 200 employees, about 68% of whom are R&D professionals. Its R&D, sales, and operating centres are across multiple Chinese cities including Shanghai, Beijing, Kunshan, Chengdu, and Hong Kong, according to its website.
Its revenues in the first nine months totalled about 704.2 million yuan ($96.8 million), on track to surpass the nearly 721.3 million yuan ($99.1 million) booked for the whole year of 2023. But the unicorn has yet to turn a profit, with net losses of 162.2 million yuan ($22.3 million), 258.3 million yuan, 100.7 million yuan in 9M 2024, 2023, and 2022, respectively.
Viewtrix originally targeted an initial public offering (IPO) in mainland China and hired China International Capital Corp (CICC) for its pre-listing tutoring in January 2023.
