Tuya outlines MCU chipset replacement plan as revenue hits 118% YoY growth in Q2

Rhea-AI Summary

Tuya Smart (NYSE: TUYA) reported a remarkable 118% year-over-year revenue growth in Q2 2021, totaling USD 84.7 million. This announcement was made during their second earnings call since going public in March 2021. The company has initiated a MCU chipset replacement plan to address the ongoing semiconductor shortage, allowing clients to maintain production efficiency while reducing costs. Despite recent challenges with Amazon banning some Chinese merchants, the company remains confident about its full-year results, attributing only minor impacts on Q3 guidance.

Positive

• Q2 2021 revenue grew by 118% year-over-year to USD 84.7 million.
• Initiated MCU chipset replacement plan to mitigate semiconductor shortage.
• Maintaining strong gross margins and efficiency for clients.

Negative

• Amazon's banning of some merchants had a limited impact on Q3 results.

SANTA CLARA, Calif., Sept. 21, 2021 /PRNewswire/ -- Tuya Smart (NYSE: TUYA), a global IoT development platform, recently announced that total revenues grew by 118% year-over-year in the second quarter of 2021 to USD 84.7 million. The announcement was made during the company's second earnings call since going public in March 2021.

While answering questions during the earnings call, Jessie Liu, Board Director and CFO of Tuya Smart, shared additional details about the company's MCU chipset replacement plan, a strategy that was announced by the company earlier in the year in response to an ongoing worldwide supply shortage of integrated circuits (commonly known as semiconductor chips).

"Tuya's nine major product categories are all eligible for the MCU chipset replacement plan, which will help our customers to overcome the difficulties of semiconductor shortage," explained Liu. "We plan to replace chips that currently cannot handle a certain degree of high-precision ADC digital to analog conversion and also multiplex motor-driven equipment."

In the face of the semiconductor shortage, Liu added that Tuya is continually looking for ways to help customers to succeed. In a nutshell, Tuya's MCU chipset replacement strategy achieves similar functionality to currently unavailable advanced chipsets through a smart combination of wireless communication chip processing and the functionality of currently available chips. The result is customers save money, improve efficiency, and ensure production lines continue to operate.

"Professional chipset replacements are similar to the industry applications in terms of being more vertically focused, reducing customers' all-in cost, improving value proposition and solving the problem of chip shortages. Our gross margin will remain similar. At present, our clients in the small home appliances sector are benefiting from this plan the most. We will introduce more chip replacement plans in the future," added Liu.

Responding to another question about Amazon banning some of the biggest Chinese merchants on the Amazon platform for 'review abuse' this year, Liu expressed confidence in Tuya's full year results. "The Amazon issue impacted Q3 results on a limited scale and was already reflected in our Q3 revenue guidance," noted Liu.

"This was an unexpected event that happened in the last couple of months, but the majority of our customers sell their IoT products through offline retail channels, with about 80% of IoT devices powered by Tuya sold through offline retail channels. Our e-commerce customers are very resilient, and have deep experience in product development, supply chain, and e-commerce operation," added Liu. "We remain confident for our full year results".

About Tuya Inc.

Tuya Smart (NYSE: TUYA) is a global IoT development platform that builds interconnectivity standards to bridge the intelligent needs of brands, OEMs, developers, and retail chains across a broad range of smart devices and industries. Based on the global public cloud, Tuya connects different intelligent scenarios and smart devices by providing hardware development tools, integrating public cloud services, and offering an intelligent business development platform. Tuya provides comprehensive smart empowerment from technology to marketing to foster a neutral, open and accessible developer ecosystem.

For more information, please visit: Tuya's website, LinkedIn, Facebook, Twitter or YouTube.

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SOURCE Tuya Smart

FAQ

What was Tuya's revenue growth in Q2 2021?

Tuya reported a 118% year-over-year revenue growth, totaling USD 84.7 million in Q2 2021.

What is Tuya's MCU chipset replacement plan?

The MCU chipset replacement plan is a strategy to help customers manage semiconductor shortages by utilizing currently available chips.

How has Amazon's actions affected Tuya?

The recent banning of some Chinese merchants by Amazon has impacted Tuya's Q3 results on a limited scale, as noted in their guidance.

What percentage of Tuya's products are sold through offline channels?

About 80% of IoT devices powered by Tuya are sold through offline retail channels.

When did Tuya go public?

Tuya went public in March 2021.