In recent years, the mobile phone market has developed rapidly, multi-camera models have been constantly changing, and the corresponding camera market has also become fiercely competitive. As a result, patent wars have become an important weight in the competition between manufacturers. Nowadays, as the smart car market gradually opens up, the field of automotive optics has gradually become an important competitive field.
Recently, in addition to Largan suing Yujingguang for patent infringement twice, the battle between domestic optical leader Sunny Optical and AAC Technology also came into view.
On December 16, Chengrui Optical (Changzhou) Co., Ltd. withdrew its IPO application, Shanghai Stock Exchange thus terminated the review of its initial public offering of shares and listing on Science and Technology Innovation Board.
Public information shows that Chengrui Optics is a subsidiary of AAC Technology. It was established in 2008 and focuses on the R&D, manufacturing and sales of plastic lenses, WLG glass lenses , glass-plastic hybrid lenses, camera modules, optical transmission and other optical components. On June 6, 2022, the Shanghai Stock Exchange accepted the IPO application submitted by Chengrui Optics. In August, Chengrui Optics completed its response to the first round of inquiries.
However, six months after the IPO was accepted, the listing process came to an abrupt end. AAC Technology stated that in view of the external macroeconomic environment and the current status of the industry, it decided to postpone the plan for spin-off and independent listing, and there is no guarantee when follow-up actions will be carried out.
There is market speculation that Chengrui Optical suddenly terminated its IPO, and the patent attack from Sunny Optical may be one of the important reasons.
Sunny started a patent war, AAC counterattacked
On November 15, Sunny Optical announced that its wholly-owned subsidiary Zhejiang Sunny Optical has sincerely Five companies, including Ray Optical (Changzhou), Ruitai Optical (Changzhou), and Ruicheng Optical, have launched 17 litigation procedures for infringement of certain intellectual property rights of Sunny Optical, involving its multiple patents in the field of plastic lenses and glass-plastic hybrid lenses. The above-mentioned lawsuits have been officially accepted by the Intermediate People's Court of Ningbo City, Zhejiang Province on August 22 and September 8, 2022 respectively.
On November 15, AAC Technology responded that the group has more than 2,700 optical lens patents, including but not limited to plastics, glass-plastic mixing, etc., and has sufficient reasons to defend itself.
On November 30, AAC Technology announced that its subsidiaries Chengrui Optics and Ruitai Optics have launched 10 patent corresponding litigation procedures against five companies including Zhejiang Sunny Optical for infringement of certain intellectual property rights of the group. The above-mentioned lawsuits have been officially accepted by the Nanjing Intermediate People's Court of Jiangsu Province on November 22 and November 23, 2022.
On December 1, Sunny Optical announced that based on the litigation announcement issued on November 15, two new litigation procedures were launched against the five defendant companies, which were officially accepted by the Ningbo Intermediate People’s Court of Zhejiang Province on November 29.
As a result, a patent war began. Chengrui Optical terminated its IPO on December 16 and became a node in it.
Behind the Patent War
According to Sullivan statistics, based on shipment volume, in 2021, Sunny Optical, Largan Optical, and Chengrui Optics' shares in the global lens market are 23%, 16%, and 8% respectively. Among them, their shares in the smartphone lens market are 28%, 21%, and 10% respectively. From the perspective of market share and , there is still a certain gap between Chengrui Optical and Sunny Optical.
It can also be seen from the revenue that Chengrui Optical's revenue in 2021 is less than one-tenth of Sunny.
Logically speaking, Chengrui's size does not pose a threat to Sunny. So, why did Sunny, which has never launched a large-scale patent war before, choose Chengrui Optics as the first target of sniping?
Sunny stated in the lawsuit announcement released on December 1 that the wafer-level glass (WLG) glass-plastic hybrid mobile phone lens used by the defendant company infringed on its utility model patent.
Therefore, the market believes that at a time when plastic lens technology has reached a bottleneck and glass-plastic hybrid lenses may become the next trend, Chengrui Optics is the company closest to the trend and may lead the market in the future. This forces Sunny, as a leading company, to take precautions.
From the perspective of business layout, the main businesses of Chengrui and Sunny are mobile phone lenses and mobile phone modules, and extend to the automotive lens, vehicle module and other markets; from the perspective of technological development, Chengrui Optics' WLG wafer-level glass-plastic hybrid lens will begin mass production in the second half of 2022. Sunny began developing glass-plastic hybrid lenses many years ago and uses GMO (Glass Molding optics) molding technology.
Data released by IDC shows that in the past year, Chengrui Optics’ WLG glass-plastic hybrid lens has been supplied to 4 brands including Xiaomi , Sony and other brands. More than 2 million models have been supplied, accounting for about 60% of the glass-plastic hybrid lens market; Sunny has supplied about 1.5 million pieces (partially or outsourced) to three models of vivo, OPPO and other brands, accounting for about 40% of the market.
The IPO of Chengrui Optics is mainly to raise funds for the R&D and manufacturing projects of WLG technology. After reaching production, the annual production capacity of WLG lenses and glass-plastic hybrid lenses will be 800 million pieces and 200 million pieces respectively.
Although the current shipment volume of glass-plastic hybrid lenses is still very small compared to plastic lenses, it is obvious that leading manufacturers have not ignored the impact it may have on the industry structure.
The outcome of the patent war is
As we all know, the leading optical manufacturer Largan also often uses patent wars to restrict its peers and defend its own interests. Since 2013, Largan has launched patent wars against Yujingguang, Samsung, HP, Advanced Optical, New Juke, Lenovo Motorola and other companies. This year, it launched two patent lawsuits against Yujingguang.
In most of the above-mentioned lawsuits, settlements were reached in the end, ending with Largan Guang obtaining orders or authorization fees.
Therefore, presumably the patent war between Sunny Optical and AAC Technology will eventually reach a settlement. However, it is still unclear which party will end up losing more.
According to data from Chaodian Think Tank, the total number of registered patents for Sunny Optical is 2,089 and that of Chengrui Optical is 3,020. Among them, from the perspective of patent types, Sunny has 3,769 invention patents and 1,320 utility model patents. Chengrui Optics has 2,456 invention patents and 1,690 utility model patents. From the perspective of geographical layout, Sunny has 1,883 patents in China and 206 overseas. Chengrui has 1,690 patents in China and 1,330 overseas. When
patents compete with each other, there will be damage.
For AAC Technology, the size of its subsidiary Chengrui Optics is quite different from that of Sunny Optical. In addition, Chengrui has been in a loss-making state in recent years and is not suitable for being involved in long-term patent disputes. The termination of the IPO also proves this point.
For Sunny, large size means large shipments and wide range. Facing AAC Technology’s patent counterattack, it may suffer greater losses.
Therefore, how this patent war will end and how the overlapping technologies will be divided in the future are issues of particular concern to the market.
