Saturday, August 11, 2018

Synaptics Rethinks its Under-Display Optical Fingerprint Business in Search for Better ROI

SeekingAlpha: Synaptics quarterly earnings call has interesting info on its optical under-display fingerprint sensor business:

"...we really take a big scrub on all of our products in the ROI and what provides the best investment going forward. And as we did that analysis, it was becoming clear ...that optical was going to be one of those boom and bust cycles. And to a certain degree, we lived through that with our capacitive solutions a few years back, and we did fantastic. But invariably, because it's somewhat of an optional solution and there's alternatives, it quickly went from a multi-dollar solution to a sub-$1 solution. And so, we enjoyed good money.

But if you look over the entire period, it wasn't the type of sticky highly differentiated business that we now seek as a company. And so, it would've taken additional investment or continued investment from our perspective. It somewhat hurts because we clearly were the innovators in the industry, and yes, we do see broader adoption of in-display fingerprint in the marketplace from a unit perspective and so on. But we can see the ASP erosion has begun, and there'll be multiple suppliers in it. Just from a long-term investment, we have better fish to fry right now. And so, it was purely an ROI decision.

...the revenues were fairly minimal. I'd say kind of in the sub $15 million to $20 million range is what's going away. We have bigger plans for it, as you saw at our Analyst Day, so we were expecting it to contribute about $100 million in fiscal 2019, and then more than that in fiscal 2020. But the actual impact year-over-year is fairly minimal at a Synaptics level.

...Now, that doesn't mean we're stopping. From the very beginning, when we went into this business, we said the ultimate solution was when fingerprint was truly integrated into the display. And eventually, when the market was right, we would have TDDI FP, so we're going to continue the investments in research in that particular area when we think the market might be ready, so you could have true in-display across the entire screen with multiple cost to the – minimal cost, excuse me, to the end user.

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