Synaptics released its fiscal Q3 2016 report yesterday, April 28. Synaptics CEO commented on the soft smartphone market, especially in the high-end mobile device segment. The design wins from Chinese smartphone OEMs that Synaptics CEO mentioned have caused some speculation today and a short comment is mandated.
A design in is not the same as a design win, and CEO Rick Bergman of Synaptics mentioned twenty design ins, when asked by analysts about the twenty design wins, he noted that Synaptics had secured several design ins and a few design wins - at least that is what we heard during the conference call. We do not have coverage of Synaptics, but given that the company is a major competitor, it is valuable to keep an eye on the company.
Synaptics stated that its fingerprint sensor business had a robust quarter with a little bit of fallback - our take is that Synaptics are not doing so well in its fingerprint sensor business but hope to secure multiple design wins in the second half of the calendar year. So far, it seems to have secured design ins rather than design wins.
Furthermore, it is troubling for Synaptics that it cannot deliver to ZTE due to restrictions imposed by the US Commerce Department.
Regarding design in vs. design win, the fact is that even though a company might offer superior products at a lower price than its competitors, in a business where supply is critical it will many times not lead to more than a design in. To secure a design win, especially for flagship models and high volume models, an established track record and sound financials are required to secure a design win. In this aspect, Synaptics weak financial performance as well as the supply chain issues discussed during the conference call are troubling for the company.
Fingerprint Cards will likely benefit from the situation as foundries as well as OEMs value a partner with strong financials that can guaratee volumes. To summarize, what we heard from Synaptics yesterday is not making us worried about FPC's competitiveness, rather the opposite.
Below is an illustration of design in and design win.