E-Lead’s positive outlook for 2022 driven by autonomous vehicle systems
Heads-up displays (HUDs), advanced driver assistance systems (ADAS) and on-board computers are the three main thrusts of E-lead Electronic, according to company vice president Rofic Ko.
E-lead expects the fourth quarter of 2021 to be better than the third quarter, due to the rapid growth of autonomous driving systems and the entry into a profitable period for ADAS and on-board computers. While a large number of new HUD orders are expected to improve in 2022 compared to 2021, the company will continue to closely monitor the global COVID-19 pandemic situation.
HUD accounted for 40% of E-lead revenue in the first half of 2021, ADAS 34% and on-board computers 26%. HUD and ADAS have already gone through the initial period of long-term development investment with Original Equipment (OE) factories.
Making breakthroughs with the on-board computer
The popularity of on-board computers in recent years has come from the fact that today’s cars all come with built-in monitors that can connect to the Internet and cell phones. Drivers can seamlessly connect to in-car entertainment and driver assistance systems through platforms such as Apple CarPlay and Autolink.
E-lead on-board computer has 360 degree panoramic view monitoring (AVM), ADAS, tire pressure monitoring system (TPMS), recorder digital car video (DVR) and power control capabilities.
E-lead’s on-board computers were originally intended to compete directly with OEs. However, they were limited to certain car models, which limited the volume of sales. As a result, in 2020 the company changed its strategy and started joint development with a Japanese brand of sound systems. She is currently working on long-term projects of two to three years. Its sales volume has also increased.
Although the gross margin in this area is lower than the average gross margin, it opened up a large channel and created potential sales channels for HUD and ADAS. Results should become clearer in the fourth quarter.
HUD in the spotlight
The demand for HUD is expected to increase significantly with the popularization of autonomous driving, especially Level 3 and Level 4. Currently, the HUD market in China is the largest.
Based on the number of HUDs installed in autonomous passenger cars and joint ventures in 2020, the main suppliers are Nippon Seiki with a market share of over 30%, Continental with 27% and Japan-based Denso with 20%. Electronic lead represented 9%.
The HUD throw distance range can be used to measure a vendor’s technological suitability. Right now 2-3 meters is the average, but 4-7 meters is the future goal. This would allow drivers to quickly relate information and distance in order to make faster and better decisions.
Currently, E-lead primarily sells on-board W-HUDs (Windshield HUDs) used as projection media to mirror images. In the future, the company’s Augmented Reality HUD (AR HUD) may be split into 2D and 3D. E-lead has already acquired several patents.
E-lead controls a large part of its industrial chain. Its current self-manufacturing rate is 80% and includes optical glass, optical computers, and electrical systems. This allows the company to efficiently make changes in production capacity and control costs.
Ko pointed out that the HUD actually embeds information, which does not flow directly after connection.
As the proportion of electronic integrated circuits used in vehicles increases, vehicle design will be carried out using an on-board shared network platform. This will involve the exchange of a lot of information within the communication protocols. Many of these are vetted by Tier 1 manufacturers in the automotive supply chain, making it difficult to obtain protocols for new entrants.
Some new entrants get protocols by breaking them, but information is easily omitted this way.
E-lead has spent a lot of time and money developing on-board information platforms in collaboration with OEs and can use a lot of information. This is the competitiveness of E-Lead.
The company hopes the HUD will account for 40-50% of revenue in 2022; however, since both on-board computers and ADAS have good growth momentum, changes in the revenue ratio for the three products will be closely monitored.
4Q21 chip acquisition and dynamics
As for the auto chip shortage, the impact of the pandemic in Southeast Asia in the third quarter is starting to ease and is expected to improve in the fourth quarter. However, if chips from major chip makers are used in European and Japanese cars, there could still be a shortage.
Since E-lead has a good working relationship with automotive supply chains in Europe and the United States, European and American OEMs will coordinate chips on their behalf. At present, it is estimated that there is no shortage of chips for existing orders, but there could be some for new orders.
New orders for the fourth quarter include those resulting from the growing demand for HUD in the Chinese market. The growth is attributed to the release of a number of new cars, as well as exceptionally good sales volume and additional orders from Geely and other independent car brands.
In terms of ADAS, the demand is mainly for the supply of Japanese cars to Southeast Asia. The main markets remain Indonesia, Malaysia and Thailand: 360 degree AVM products for Indonesia will be supplied in the fourth quarter, and in-car audio systems for two projects will be supplied in September and October. These orders have been slightly delayed due to the pandemic.
E-lead provides 360 degree AVM to Japanese Tier 1 OEM whose sales remain strong in Thailand.
As for new projects, the same OE will experience new impetus in Indonesia. Shipments there will be delayed for one to two months due to the pandemic and are expected to return to normal in October.