14 May 2024

Succeeding in China: Cambridge Mechatronics’ journey of innovation and expansion in China

An extract of an interview with Andrew Bickley, Co-Managing Director

Cambridge Mechatronics was invited by Crayfish.io to sit down and discuss its experiences as part of a series titled “Succeeding in China – real stories told by UK business executives”. Here we summarise the main discussion topics in the conversation between Ting Zhang, CEO of Crayfish, and Andrew Bickley, Co-Managing Director at Cambridge Mechatronics.

Based in the UK’s tech hub, Cambridge Mechatronics Ltd (CML), has emerged as a world leader in pioneering solutions that enhance smartphone imaging. Providing customers with a total solution comprising Shape Memory Alloy (SMA) driver ICs and actuator designs, CML's SMA technology provides advantages for precisely controlling and positioning objects in a range of applications, including smartphone cameras, haptics, extended reality (XR/VR/AR), and medical drug delivery devices.

Since making its entry into the Chinese market in 2017, CML has witnessed steady and intensifying growth, navigating through the fast-paced market landscape and broader global business dynamics. CML’s journey provides valuable insights into the company's strategic approach and the crucial moments that have defined our expansion in China.

The start of CML's venture in China

The story begins in 2013, with CML's exploration into optical image stabilisation (OIS) for smartphone cameras, in collaboration with a US-based company. This technology, crucial for eliminating motion blur to enhance image quality, caught the attention of Chinese enterprises around 2015. It wasn't long before CML secured its first manufacturing license in China with TDK in 2017, marking the start of an increasing interest from leading Chinese tech giant Huawei. The collaboration with Huawei led to the successful integration of CML's lens shift OIS actuator design and control in the acclaimed P30 Pro and Mate30 Pro models, cementing CML's role in Huawei's innovative camera solutions.

To support its customers, CML set up offices in Shenzhen and Shanghai with staff dedicated to provide customers with technical and sales support. This team has now grown to 14 persons.

Expanding footprint and innovating solutions

Building on this success, CML expanded its presence in China, agreeing licensing terms with four additional manufacturing partners to produce OIS and AF actuators for smartphones. In order to better support customers and own a larger share of the value chain, CML started to design its own range of dedicated SMA controller ICs in the period between 2021 and 2023. The combination encompassing the actuator design, control algorithms, and semiconductor product providing a fully integrated and streamlined solution for its customers.

This strategic approach underscores CML's competitive edge, driven by patented control algorithms and expertise in mechanical design. With over 700 patents granted or pending, CML's commitment to innovation is evident in its ability to offer a compact actuator technology with a unique blend of precision, non-magnetic interference, power efficiency, and noiseless operation, whilst exploiting SMA’s high force-to-mass properties.

Continued innovation alongside Huawei has enabled new products and product improvements to be developed and commercialised. Following the adoption of SMA designs by Huawei, other major Chinese OEMs have followed, such as Honor, Xiaomi and Tecno.

Navigating business challenges

The business landscape in China presents a unique set of challenges, underscoring the complexity and dynamism of the Chinese market. Overcoming these obstacles has required a strategic, adaptable approach from CML, focusing on innovation, local integration, and continuous learning.

Intellectual Property (IP) protection: A critical hurdle in China has been ensuring the protection of intellectual property. For CML, safeguarding the extensive portfolio of over 700 patents is paramount, not just for the company's security but also to maintain the trust and confidence of customers and supply chain partners. The emphasis on robust IP protection reflects the broader concern many foreign companies face in safeguarding their innovations in China.

The pace of business in China: The Chinese market is characterised by its fierce and fast-paced competition. Local competitors evolve quickly, pushing companies like CML to accelerate their innovation cycles and product development to stay ahead. This environment demands continuous innovation and the ability to swiftly bring and scale new technologies and solutions to market. Whilst these approaches offer opportunities to accelerate new product adoption, keeping up with the ambitious timelines and the dynamic nature of market demands requires a strategic shift towards more agile and responsive operational processes.

Pandemic and Geopolitical challenges: The COVID-19 pandemic disrupted global supply chains and forced adaptation to remote working conditions and support. For CML, this period was particularly testing as it coincided with a key phase of growth. The pandemic highlighted the need for flexible operational strategies and the ability to maintain productivity and support for customers despite physical distance and restrictions. Geopolitical tensions and policies have a real impact on business operations. In response, we have had to focus on cultivating local supply chains and manufacturing capabilities, especially in regard to our controller ICs.

Key learnings from a decade in China

Reflecting on over a decade of operations in China, one of the most striking aspects of operating in China is the distinct expectations of Chinese customers. These expectations are not just about the technical specifications or the cost-effectiveness of solutions; they encapsulate a broader spectrum of expectations, including support arrangements, rapid innovation cycles, exceptional flexibility, and the ability to rapidly scale solutions in response to market needs. Chinese customers value partners who can not only keep pace with their ambitious timelines but also anticipate future trends and requirements.

To meet these demands, CML has adopted several strategies:

Local engineering support: The China-based offices enable real-time, on-the-ground engineering support for our customers in their time-zone. This proximity has been crucial for rapid problem-solving, aligning with the fast-paced expectations of Chinese customers. In order to meet these needs, CML has recognised the indispensable value of local expertise and talent and the value of transferring engineering expertise and processes to the China team. In return, the team bring an intrinsic understanding of the cultural and operational nuances of the Chinese market and subsequently serve as an invaluable bridge between our Western (global) perspectives and local practices. Individuals are recruited on their ability to provide expert customer support whilst understanding the nuances of working as part of a Western organisation.

Adaptation to customer expectations: CML’s strategy has focussed on demonstrating a flexible approach to our Chinese customer base, at all levels of the camera module supply chain. We have integrated with local suppliers and manufacturers, which in turns means we are set up to support faster innovation cycles, customisation requirements, and production scalability. For example, Chinese customers like autonomy so we are deploying tools that support these requests. In combination with the contribution from our local teams, the flexible approach to support customers has enhanced our agility and ability to respond more swiftly to the changing needs of the market. Adopting more agile processes in our operations has helped us keep pace with the market but has also fostered a culture of continuous innovation and improvement within CML.

Cultural and operational integration: Integrating our operations culturally and operationally within China has been vital. This integration has gone beyond mere physical presence; it has involved a deep understanding and respect for Chinese business customs, practices, and expectations. Our efforts to align with these aspects have been critical in building trust and long-term relationships with our partners and customers.

Looking ahead: CML's ambitions in China

As we look to the future, the vision is one of growth and expansion, with plans to double the business value in China over the next three years. This ambition is supported by a $40 million funding round aimed at advancing semiconductor capabilities and enhancing customer experience through improved tools and services. The focus remains on delivering system solutions that cater to the evolving needs of the Chinese market, reinforcing CML's commitment to being at the forefront of technological innovation.

Although CML has seen significant success in the smartphone imaging sector within China, the encountered challenges have also highlighted the need for product and customer diversification. CML's strategic move towards exploring new applications and markets, such as medical devices and AR/VR technologies, illustrates the importance of diversification for sustainable growth, globally, but also in China.

In conclusion, CML's journey in China is a narrative of strategic foresight, adaptability, and a commitment to innovation. As the company continues to navigate the complexities and opportunities of the Chinese market, CML’s story may offer valuable lessons for technology companies looking to establish a footprint in one of the world's most dynamic and challenging markets. With a blend of advanced technology, strategic market entry, and a deep understanding of local business culture, CML exemplifies how companies can not only succeed but thrive in the global arena.

About CML: Cambridge Mechatronics Limited (CML) is a world-leading developer of mechanical, optical, electrical, silicon and software designs for system level solutions using its Shape Memory Alloy (SMA) platform technology. Solutions such as actuators based on SMA wire can be controlled to the accuracy of the wavelength of light. These actuators are particularly suited to applications that require high levels of precision and force, in a fast, compact and lightweight design.

CML’s actuator designs are shipping in high volume in multiple premium smartphones. For more details about Cambridge Mechatronics and SMA technology, please GET IN TOUCH.