The structure of the in-car image camera supply chain has reshaped as the intelligent driving industry continues to stride forward.
It is announced that Jiangxi Trace Optical Co., Ltd. has recently concluded a transaction to acquire one hundred percent shares of Shanghai Fengmei Optical Co., Ltd. Through this deal, Jiangxi Trace Optical Co., Ltd. has made another solid progress towards its target to develop itself into a top tier supplier. The integration of both companies can enable Trace Optical to achieve not only horizontal integration in the technical respect but also vertical integration in the product range. As a result, the product mix will be hence improved.
The released investigation by Electrend shows that Fengmei Optical was founded in 2017 with the registered capital in an amount of 89.2 million CNY. Fengmei Optical is committed to the design, development, manufacturing and sale of optical components and assemblies for the automotive sector, and it primarily serves for the automotive OEM market by providing such products applied to various driving scenarios as optical lens assemblies for in-car cameras, optical modules for HUD devices, and optical lens assemblies for receivers and transmitters of LIDAR system and so on. The company is known for its superior R&D capabilities and good position in the marketplace.
Taking advantage of high-level automated production and large bulk supply service, Fengmei Optical has been shipping massive optical products to tier customers which ultimately goes to such OEMs as BYD, SAIC, FAW, GAC, Dongfeng, Chang'an, GWM and several other premium auto makers. It deserves notice that Fengmei Optical has been the largest supplier for BYD for a third year in a row in terms of the optical lens assemblies for around view cameras.
Incorporated in 2010, Trace Optical is headquartered in Longnan City, Jiangxi Province, with branch offices in Shenzhen, Taiwan and North America. Trace Optical is consistently dedicated to the design, development, manufacturing and sale of optical lens assemblies for the automotive sector. As a high-tech enterprise and a gazelle corporation that is chosen to be cultivated by the governmental authorities at the Longnan municipal level as well as the Jiangxi provincial level, Trace Optical has obtained almost 150 optics-related patents. The company possesses outstanding R&D capabilities characterized with in-depth knowledge and knowhow to consummate designs in the early stage including proper thermal compensation design concept for high and low temperature, design optimization for the avoidance of purple fringe and other challenging design concepts. The company is committed to incorporating superb designs and well-developed production process so as to ensure the performance of the lens assemblies such as defogging, water droplet contact angle, extra built-in electric heating and etc. The company is staffed by a group of professional technicians who worked for and were extensively trained by some famous optical companies both at home and abroad. Trace Optical has a complete set of manufacturing capabilities and quality systems in house ranging from the cold processing of glass lenses, ultra-precision tooling CNC, the injection molding of aspheric lenses, optical film coating, the automated assembly of lenses components and etc. Its product mix encompasses the lens assemblies used for AVM, DVR, DMS, OMS, ADAS for vehicles and lens assemblies used for IPC, Sport-DV, UAV, and AI.
As one of top ten global automotive lens suppliers, Trace Optical is deemed as a core supplier in the supply chain by some of top automotive Tier 1 players and end customers. Thanks to this, Trace Optical has been recently awarded the business for multiple variants of 3 megapixel lenses for AVM cameras and 3 megapixel lenses for CMS cameras. In addition, 5 megapixel lenses for OMS cameras and 8 megapixel lenses for ADAS cameras designed and developed by Trace optical draws considerable attention in the market after their launch, which leads to rapidly increased demand for the relevant products that are already in serial production at the moment.
A number of companies upstream and downstream the automotive camera industry chain think of this transaction highly with the belief that the transaction can bring about the benefits in the following four aspects.
The first aspect is product mix. Trace Optical is in a dominant position in supplying optical lens assemblies for automotive aftermarket and commercial vehicles. Fengmei Optical is profoundly competitive in the automotive OEM market. In particular, among Fengmei Optical’s existing product lines, HUD optical modules, light projection lens assemblies, optical lens assemblies for receivers and transmitters of LIDAR system and others can be complementary to current Trace Optical's product lines.
The second aspect is operational regions. Trace Optical has already set up a R&D center and a manufacturing base in Longnan of Jiangxi Province and sales offices in Shenzhen and Taiwan. East China is considered as an important area where new energy vehicles industry is clustered. The acquisition of Fengmei Optical can facilitate Trace Optical to provide better service to its customers falling into this region through direct interface to local R&D resources and convenient product delivery. The extension of footprints in multiple regions is strategically beneficial.
The third aspect is integration. Trace Optical attaches great importance to the investment in R&D. The shareholders starting up this company were graduated in optics major and are devoted to the design and development work at the company for a dozen of years. Both Trace Optical and Fengmei Optical have profound technical experience, well established facilities, and abundant customer base, and the mutual understanding of the optical lens industry for the automotive market is on the same page. There wouldn’t be too many challenges arising from integration. The effect of one plus one greater than two will soon play out.
The fourth aspect is company’s future prospect. Trace Optical is recognized as a rapidly growing and relatively ambitious high-quality company that has installed a young and vigorous team. The company has been keeping on investing a great deal in R&D, quality management and manufacturing in the past years for the purpose of building up itself into a brand company in the optical industry.
Fengmei Optical has a strong background. With integration and combination of product mix, resources, and technical capabilities of both companies, the potential can be inspired and the strength can be bolstered.
According to the statistics published by Electrend, the shipment quantity of automotive lenses in the world has reached 260 million pieces in 2023. It is estimated from the market development trend that the shipment quantity in the next two years will be approximately 340 million pieces in 2024 and 420 million pieces in 2025 respectively.
The year of 2025 is thought to be a tipping point when the automotive industry is expected to restructure. In order to survive the competition, both traditional car makers and new energy startups are endeavoring to implement smart driving and intelligent cockpit systems which are equipped with cameras image sensors as mature solutions.
Tougher competition is taking place more than ever in the supply chain. Qualified suppliers are seeking not to be eliminated in the next stage As it is said, fear not the strong pass iron-clad on all sides, the summit is now surmounted with great strides. Taking the acquisition of Fengmei Optical as a new starting point, Trace Optical will continue to enhance its comprehensive strength, advance towards top listed supplier and write a splendid chapter.
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