Recently, another overseas LiDAR company was acquired. On July 29, U.S. LiDAR company Cepton announced on its official website the signing of a definitive agreement, under which Koito (Koito Manufacturing) will acquire all of the company's issued and outstanding shares not owned by Koito at a cash transaction price of $3.17 per share. Upon completion of the transaction, Cepton will operate as a privately held indirect subsidiary of Koito in the United States, with its headquarters located in San Jose.

Prior to this, Cepton and Koito had a very close relationship, and Koito has been continuously increasing its stake in Cepton over the past few years, with its shareholding ratio increasing from 12.5% in November 2022 to 30.2% in May 2024. The announcement of the acquisition on Cepton's official website was immediately preceded by the news in May of signing a significant engineering contract with Koito, accelerating Cepton's LiDAR into automotive OEM manufacturers.

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Cepton's Unique LiDAR Technology Path

Founded in 2016, Cepton successfully went public on NASDAQ through a special purpose acquisition company during the LiDAR company listing wave from 2021 to 2022.

Unlike other LiDAR companies, in 2016, when autonomous driving companies were at their peak, the industry was generally optimistic about full self-driving at levels L4 and even L5, but Cepton chose the L2+ADAS track, developing LiDAR for ADAS.

Dr. Jun Pei, the founder, had previously led the development of the HDL-64 LiDAR at Velodyne, and the technology path he chose for Cepton was different from Velodyne and all other ADAS LiDARs on the market at the time.

In terms of technology, Cepton has pioneered a new path beyond the current mainstream MEMS micro-mirrors, rotating mirrors, prism scanning, and other hybrid solid-state routes. Cepton uses a principle similar to that of a speaker, employing coils and other structures to drive the LiDAR array, connecting the transmission and reception end signals, and maintaining micro-movement to complete spatial scanning during motion. This structure is known as MMT (Micro Motion) technology, which has the advantage of avoiding mechanical wear present in current LiDARs on the market and eliminating the attenuation effect of lenses on light.

However, MMT technology requires handling complex coordinated movements, which demands a high level of computational power from the system. Previously, Cepton spent three years developing a vehicle-grade ASIC chip that costs only $1, integrating illumination control and detection functions, with a low-cost, low-power design, seamlessly integrated into the proprietary micro-optical array.

In early 2021, Cepton launched the world's smallest short-range wide-angle LiDAR, Nova, with a field of view (FOV) of 90~120° (H) and 60~90° (V). Importantly, the cost will be below $100. In addition, the Nova is only 3.5cm x 3.5cm x 7.5cm in size and weighs less than 350 grams, making it small enough to be integrated into car headlights.

This may also be one of the reasons why Koito, which mainly operates in the car lighting business, places such importance on Cepton.At CES2024 in January this year, Cepton showcased its next-generation flagship automotive LiDAR, the Ultra, which achieves a 300-meter range (10% reflectivity) and a 0.05x0.05 angular resolution at a power consumption of 12W. Moreover, the Ultra LiDAR has dimensions of only 150mm x 24mm x 90mm, and Cepton claims it to be the world's thinnest long-range LiDAR.

In 2024, OEM projects are expected to turn the tide.

Like other overseas LiDAR companies, mass production remains Cepton's biggest challenge. Even with close collaboration with a Tier1 like Koito, shipments and revenue have yet to show significant improvement.

Cepton's total revenue for the first quarter of 2024 was $1.946 million, with product revenue at $1.141 million and development revenue at $0.8 million, representing a 31% increase compared to the same period of the previous year. The GAAP net loss for the quarter was $6.8 million, and the non-GAAP net loss was $8.3 million.

Not only is there no profit, but the revenue is not even enough to cover the extent of the losses. In fact, Cepton secured the largest exclusive ADAS LiDAR mass production order in the industry at that time in 2021, in partnership with General Motors. According to the plan, vehicles equipped with Cepton's LiDAR were to be mass-produced in 2023, with the first batch entering 4 target models, and more than 4 additional target models were to be added in 2024. However, it now appears that these fixed projects are either almost failing to materialize or have been delayed.

In 2024, Cepton's collaboration with Koito finally made new progress, with Koito providing Cepton with a total of $10 million in engineering service fees to support the global OEM projects of both parties.

In conclusion, as a Tier1, Koito's acquisition of Cepton is inevitably supported by corresponding market demand. Perhaps the debut of Cepton's LiDAR in mass-produced passenger cars is not far off.