FPC’s Q3 Report Shows COVID Disruption in Biometrics Supply Chain

“…announcing the fiscal update, Fingerprints said that demand for its fingerprint sensors “remained healthy” during the quarter…”

Disruption wrought by the COVID-19 pandemic continues to take a toll in Fingerprint Cards‘ latest quarterly update, but the company’s CEO maintains a positive long-term outlook.

Revenues for the third quarter of 2020 came in at SEK 294 million, compared to revenues of SEK 352.5 million in Q3 of 2019. The company’s operating result was a loss of SEK 4.6 million, compared to a net loss of SEK 3.4 million a year ago.

For the year to date, revenues amount to SEK 886.3 million, compared to revenues of SEK 1.077 billion in the first nine months of 2019. The company’s operating result for the year to date is a loss of SEK 39 million, compared to a profit of SEK 0.9 million in the first nine months of last year.

The changes don’t seem to have much to do with market fundamentals: in announcing the fiscal update, Fingerprints said that demand for its fingerprint sensors “remained healthy” during the quarter, but that its earnings “were negatively impacted by continued insufficient access to production capacity among the major semiconductor manufacturers.” In other words, supply chain disruption has kneecapped this year’s business.

Nevertheless, there are some bright spots. Fingerprint Cards’ side-mountable FPC1540 fingerprint sensor “is reaping huge successes in the market,” in the words of FPC CEO Christian Fredrikson. Meanwhile, the emerging biometric payment cards market has continued to materialize as FPC launched an improved version of its T-Shape sensor module for cards; and the company secured a design win with a top-tier PC maker after the third quarter, with a product launch planned for Q1 of next year.

“Our assessment is that the situation of insufficient access to production capacity will continue in the short term, but we expect ongoing changes to our product mix to, over time, contribute to improved profitability,” Fredrikson explained. “As communicated earlier, we are planning for significant volume growth in the next few years, mainly in prioritized areas outside of the mobile phone industry. For this reason, the work to continue to broaden our supplier base is very important and we have intensified our efforts to secure more suppliers of key components, within as well as outside of mainland China.”

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November 16, 2020 – by Alex Perala