NASDAQ:OIIM
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Q4 presented a new issue for O2Micro (NASDAQ:OIIM) that occurred in the later part of the quarter. Due to production problems at its wafer supplier, O2Micro got its wafers late and supply will be affected from now until Q3 for its backlighting products and volume ramps. The company can sell all the product it can get, but for backlighting this is being gated until the company gets back to a steady state supply. Mitigating this issue somewhat is that O2Micro is bringing on a new supplier and new lines in Q2. However, it is expected to take until Q3 until it fully ramps and the company gets as much product as it needs. On the other hand, battery management has what it needs, but it suffering slightly short term by an overstock of inventory at its customers as it enters into its seasonally weak Q1. As spring approaches, demand picks up for garden tools, construction equipment, and ebikes. Vacuums and ebikes are the biggest drivers in the next couple quarters. The company continues to be optimistic about the future as batteries continue to power more and bigger devices. These will need more sophisticated and better safety protection and battery management systems and better integration with CPUs. O2Micro’s solutions shorten the customer’s design cycle, and provide systematic module software that better make use of its highly accurate AD converter.
Intelligent lighting continues its design wins in new technologies such as full array local dimming control (FALD). 8K TVs need more FALD zones to highlight the fine pixel of LCD screens. It cites the SonyXBR-85Z8H (MSRP $9000) 85 inch 8K TV as an example. It comes with thousands of FALD zones. The 8K TV market is expected to grow 21% per year. O2Micro’s multi-scan technology reduces motion blur effect, which is important to mini-LED technology and it should also benefit from growth of that technology being used in TVs, monitors and devices. O2Micro took market share in high-end monitors.
We believe margins should continue to expand as the company focuses on higher margin and high-performance proprietary analog IC. Its 2021 investment in its automotive grade ISO26262 SGS quality program, qualification of second source foundries, and expansion of its packaging and test ability to ensure delivery on time should yield improvements in 2022 and beyond.
In Q4 2021, revenue was $24.4 million, down sequentially from $27.3 million in Q4 due to the wafer issue, but up 5% from a year ago. Revenue had been growing sequentially since Q1 of 2020, all through the pandemic.