iSTART-TEK (iSTART, TW: 6786) is the only leading developer of memory testing and repairing technology in Asia. Its START™ v2, the memory testing and repairing EDA tool, is used by many local and well-known companies worldwide. Moreover, iSTART also provides customized intellectual property (IP) and various memory testing and repairing solutions with strong research and development capabilities and technical support, accelerating the time-to-market. With the increasing usage of memories in the market and the growing variation of electronic products, the demand of iSTART EDA tools is gradually rising.
The 2020 annual revenue of iSTART-TEK (6786)has increased by 258.19%. iSTART claimed that the company’s business models include three categories, “Project”, “Token” and “License.” Customers can choose different modes based on their requirements. Such flexible business models can expand the company’s customer base, , and speed up the revenue growth.
iSTART-TEK further mentioned, if customers choose the “Project” mode, they can only purchase iSTART-TEK’s customized memory test and repair IPs. In other words, customers can only use the customized memory test and repair IP on a single chip development project. For customers with limited product offerings, this is an economical option.
With the “Token” mode, customers can purchase multiple items in a single transaction. Within a specified period, they can use the customized memory testing and repairing IP on multiple chip development projects. For example, with a three-year, five-time usage authorization, customers can use iSTART’s customized memory testing and repairing IP on five chip development projects within three years. However, if the right of usage is not fully utilized within three years, they will not be able to use it in the fourth year. For both “Project” and “Token” modes, the corporation has to pay iSTART-TEK license fee and loyalty fee.
The “License” mode includes “Multi-Year” (unlimited usage within three years) and “Perpetual” (unlimited usage without the annual restrictions). Corporations need to pay iSTART-TEK EDA tool license fee and annual maintenance fee. For the corporations with diverse product developments and the high demand for iSTART EDA tools, this mode offers good value for money and is widely accepted by many well-known corporations.
Put it simply, iSTART-TEK’s business model is similar to the way Microsoft sells Office OS. Consumers can choose monthly pay, annual fee or one-time buyout. Through this business model, iSTART-TEK can achieve greater flexibility in sales and be recognized by corporations. After using iSTART product, the customers feel as comfortable as if they were using Microsoft Office at their desk. However, they still need to pay the system maintenance fee to the developer, iSTART-TEK. The likelihood of discontinuing use of the tool is quite low.”
Many institution investors often ask, “Why does iSTART-TEK’s monthly revenue fluctuate so drastically? Is there a potential risk involved?” In response to this, iSTART stated that the company recognizes revenue based on the percentage of customer project recognition for the month as the revenue recognition standard.” Therefore, at the stage of product promotion, the monthly revenue will fluctuate due to the differences in purchasing budget plans, signing time and payment terms. However, in the long term, the sales tend shows growth year over year.”
In the future, iSTART-TEK will continue expand its market both domestically and internationally. Up to now, it has signed a contract with an Israeli distributor. The company is also working hard on partnering with more distributors in the US, the UK, Japan, Korea, Europe, etc.. The legal person claims that iSTART-TEK is collaborating with IC design service companies and memory IP providers, accumulating EDA tool implementation experience. With increasing reputation and customer satisfaction, iSTART-TEK’s customer volume and sales continue surging, and the revenue is expected to stably grow.