On the evening of August 19th, Suzhou Memsensing Microsystems Co., Ltd. (hereinafter referred to as "Memsensing", 688286.SH) issued an announcement. The company intends to raise no more than 212 million yuan through a private placement via a simplified procedure. Of this, 177 million yuan will be used to acquire a 54% equity stake in Beijing Pudan Optoelectronics Co., Ltd. (hereinafter referred to as "Pudan Optoelectronics"), aiming to venture into the core component track of fiber optic gyroscopes.
This is already the second acquisition by Memsensing in the recent period. Just one month ago, Memsensing quietly disclosed that it had invested 12.45 million yuan of its own funds to acquire a 51.82% stake in Suzhou Nuolianxin Electronic Technology Co., Ltd. (hereinafter referred to as "Nuolianxin") through a combination of direct shareholding and indirect shareholding via Nuolian Yi, thereby entering the industrial gas sensor track.
Memsensing's semi-annual report shows that the company just turned from profit to loss in the first half of 2026, with a net profit attributable to shareholders of the parent company of -20.62 million yuan and operating cash flow of -35.21 million yuan.
A question arises: Why would a listed company that is still losing money invest so much money into two completely new tracks simultaneously?
01 Nineteen Years of a MEMS Engineer
Memsensing's founder is named Li Gang. In high school, he came across a popular science illustration in a physics textbook which stated, "60% of the national economy is related to microelectronics technology." This sentence was like a stone thrown into the calm lake of his young mind, stirring up lasting ripples and, in a way, foreshadowing the trajectory of his life for the following decades. After the college entrance examination, he plunged into the microelectronics major at the University of Electronic Science and Technology of China, later pursuing a master's in MEMS at Peking University and a Ph.D. at the Hong Kong University of Science and Technology.
In 2004, MEMS was still a relatively niche career direction. After graduation, while most of his classmates went to gain experience at large multinational corporations, Li Gang judged that MEMS would become an industrial opportunity, not just a small product niche. Moreover, with China's vast market, this direction was worth dedicating his full effort to. As he often said years later: "This industrial opportunity is enough to last a lifetime."
However, all beginnings are difficult. Li Gang's first startup lasted only 8 months. Due to the lack of a supply chain, even if MEMS chips were designed in the lab, there was no one to ultimately turn them into products. Furthermore, the failure of his first venture used up most of his accumulated scholarship money, but it also made him realize one thing: for MEMS, design capability alone was not enough; the entire industrial chain had to be controlled.
For the next two or three years, he moved through several companies to accumulate experience, successively serving as a technical consultant at Beijing Qianniao Yuanxin, a project manager at Shanghai Saimeixi, and continuing to deepen his technical skills at Xinrui Microelectronics.
In 2007, Li Gang met two like-minded young people who would become crucial partners in his life, and the seeds for his second startup were sown. Together with Hu Wei, who graduated from Peking University's Microelectronics Department, and Mei Jia, a graduate from Nanjing University's Microelectronics major, he registered and established the predecessor of Memsensing, Suzhou Memsensing Microelectronics Technology Co., Ltd., in the Suzhou Industrial Park, with a registered capital of 100,000 yuan.
A historic photo still hangs in the Memsensing building. The three founders stand together, dressed simply, their eyes shining, next to a crude MEMS microphone engineering sample.
After settling in the industrial park, Li Gang was rated as a first-class technological leading talent for his MEMS sensor project, receiving 1 million US dollars in startup funding. The next five years were the toughest yet most crucial for Memsensing.
In 2008, Memsensing produced its first batch of MEMS acoustic sensor chips using the R&D platform of the Nano Institute. In 2010, Memsensing collaborated with Huarun Shanghua to participate in the national "02 Special Project," establishing mainland China's first MEMS mass-production wafer line. In 2012, Memsensing's MEMS products finally achieved large-scale mass production on a local Chinese supply chain—a milestone for the entire Chinese MEMS industry.
MEMS sensors, simply put, are about giving devices "senses." Memsensing's product line started with acoustic sensors, gradually expanding to pressure sensors and inertial sensors. These three lines cover major application areas such as consumer electronics, automotive, medical, and industrial control. The route Li Gang set for the company was "one product line, one manufacturing process." Adding a new category meant conquering a new set of processes, but once mastered, it became a barrier difficult for others to replicate.
After that, Memsensing's development accelerated. In 2016, Memsensing's cumulative shipments of MEMS microphones exceeded 100 million units; in 2018, they surpassed 500 million units, rising to fourth place in global shipments; in 2020, they broke through 1 billion units. Also on August 10th of that year, Memsensing successfully listed on the STAR Market, becoming the "first Chinese MEMS chip stock." The issue price was 62.67 yuan/share, the opening price on the first day soared to 228 yuan/share, a 269% increase, pushing the market capitalization to 12.3 billion yuan.
From 100,000 yuan in registered capital to a market cap of 12.3 billion, Memsensing's journey took thirteen years. Although going public is often seen as high praise for a company, Memsensing's listing seemed like the start of another ordeal.
In 2021, Memsensing's net profit after deducting non-recurring items had already turned negative, with net profit attributable to the parent company plummeting 70% year-on-year—though management attributed the reasons to share-based payments for equity incentives and a sharp increase in R&D expenses, the slowdown in the consumer electronics industry and the price war in acoustic sensors had already begun. From 2022 to 2024, Memsensing reported losses for three consecutive years, with cumulative losses nearing 190 million yuan. The overall downturn in the consumer electronics industry and fierce price wars in MEMS sensors drove the gross margin of acoustic sensors down to less than 20%.
It wasn't until 2025 that Memsensing's financial situation saw a turnaround. The company's annual revenue was 621 million yuan, a year-on-year increase of 22.69%, and net profit attributable to the parent company was 35.99 million yuan, marking the first profitable year since listing. In the annual report, Li Gang attributed this to "explosive growth in the pressure sensor product line" and "cost reduction and efficiency improvement." That year, the company's pressure sensor business revenue reached 301 million yuan, a year-on-year increase of 42.15%, surpassing the acoustic sensor business to become the company's largest product line. Inertial sensor performance also doubled, with revenue of 52.33 million yuan, a year-on-year increase of 120.94%.
That "lifetime industrial opportunity" seemed to be showing signs of materializing.
However, the good times lasted only half a year. In the first half of 2026, Memsensing's financial situation took a sharp downturn. The company's revenue was 247 million yuan, a year-on-year decrease of 18.72%; net profit attributable to the parent company turned from a profit of 25.19 million yuan in the same period last year to a loss of 20.62 million yuan; the comprehensive gross margin fell from 31.64% to 23.81%; and operating cash flow deteriorated from 3.94 million yuan to -35.21 million yuan.
The explanation in the semi-annual report was poignant: "Geopolitical conflicts, price increases in upstream core components like memory, and insufficient terminal consumption momentum." The problem wasn't with the company itself, but with a shift in industry headwinds.
According to IDC data, China's smartphone shipments in the first half of 2026 were about 134 million units, a year-on-year decrease of 4.2%, marking the fifth consecutive quarter of year-on-year decline. Memsensing's core business is still consumer electronics. If smartphones aren't selling, sensors don't sell; if smartphone brands pressure prices, sensor profits disappear.
The triumphant turnaround in 2025 was built on a market that was contracting. This inherent risk, after nineteen years in MEMS, Li Gang could not have failed to see.
02 Jumping from Mobile Phone Sensors to Industrial and Military Industries
Li Gang and Memsensing acted very swiftly.
In July 2026, Memsensing used its own funds to acquire a 51.82% stake in Nuolianxin, and the industrial and commercial registration changes have been completed.
Nuolianxin is a small company established in the Suzhou Industrial Park in 2014, specializing in high-end industrial gas sensors. Its core team comes from Honeywell, RAE Systems, and the Chinese Academy of Sciences, holding 44 core patents. It can detect over 50 types of industrial specialty gases with an accuracy of 50ppb—this number means it can "smell" extremely minute changes in gas concentration in the air. Therefore, its products are widely used in scenarios such as chemical safety monitoring, environmental management, power grids, and petrochemicals.
This acquisition has a very tangible financial significance. The gross margin of industrial gas sensors ranges from 40% to 60%, two to three times that of Memsensing's consumer electronics business. If integration goes smoothly, this acquisition alone could significantly improve Memsensing's overall profit structure.
From an industrial logic perspective, Nuolianxin helps Memsensing fill in a key piece of the puzzle. Memsensing originally had three product lines: acoustic, pressure, and inertial, all targeting consumer electronics and automotive. Adding Nuolianxin's chemical sensing capabilities transforms the product matrix into four major technological routes: acoustic + pressure + optical + chemical. The application scenarios extend from mobile phones to factories and power grids, making Memsensing one of the very few domestic sensor platform companies capable of providing full-scenario sensing layer solutions.
After the Nuolianxin deal was finalized, Memsensing did not pause. Instead, it immediately launched its second acquisition, which caught the attention of the entire market.
The target of this transaction, Pudan Optoelectronics, was established in Beijing in 2008. It manufactures core photoelectric devices for fiber optic gyroscopes, covering the complete optical path of FOGs. Its clients span laboratories and workshops in aerospace, marine exploration, rail transportation, and industrial measurement and control. The company is a national-level specialized, sophisticated, and innovative "Little Giant" enterprise, achieving full-chain self-sufficiency from chip design, wafer processing to packaging and testing in the field of lithium niobate integrated optical devices.
Fiber optic gyroscopes are the core components of high-end inertial navigation systems. If Memsensing's own MEMS inertial sensors address "medium to low precision" inertial sensing, such as pedometers in phones or airbag triggers in cars, then fiber optic gyroscopes solve "high precision" inertial sensing: how a drone knows its location after losing GPS signal, how a missile corrects its attitude mid-flight, or how a submarine positions itself underwater. The two have different technical principles and complementary market positioning, but both belong under the large umbrella of "inertial navigation."
From an industrial logic perspective, the two companies are complementary under the "inertial navigation" umbrella. After acquiring Pudan Optoelectronics, Memsensing will simultaneously possess two technological routes: MEMS micro-inertial navigation and fiber optic high-precision inertial navigation, forming a complete inertial product matrix ranging from sensors costing a few yuan for mobile phones to navigation devices costing hundreds of thousands for aerospace.
There is also room for technical synergy. Memsensing's own ASIC signal processing chips and micro-nano processing capabilities can help modularize and upgrade Pudan Optoelectronics' photoelectric devices, or even jointly develop integrated inertial navigation systems. Conversely, Pudan Optoelectronics' expertise in lithium niobate optical devices can also feed into Memsensing's technical reserves in infrared and optical MEMS.
The more critical logic lies in the reshaping of the customer structure. Through Pudan Optoelectronics, Memsensing directly cuts into the qualified supplier systems of high-reliability fields such as aerospace, marine, and smart grids. Once certified by these customers, and based on product safety and the cost of re-verification, suppliers are typically not easily replaced. In other words, Memsensing is buying not just technology, but an admission ticket to the high-reliability market.
Looking at these two acquisitions together, the purpose of Memsensing's management is already clear—to escape consumer electronics.
The mobile phone market is shrinking, sensor prices are in a race to the bottom, and the gross margin of acoustic sensors is only 18%. The consumer electronics foundation can no longer support the valuation narrative of a STAR Market-listed chip company.
Therefore, Memsensing has chosen two escape routes. Acquiring Nuolianxin leads to scenarios like chemical plants, power grids, and environmental monitoring. Acquiring Pudan Optoelectronics leads to aerospace and military scenarios. If integration is successful, Memsensing will possess four major sensing technology routes—acoustic + pressure + optical + chemical—covering three application scenarios—consumer electronics, industrial safety, and aerospace—transforming from a chip company with 600 million yuan in annual revenue into a "full-scenario sensing platform."
But if integration is not smooth. If the consumer electronics business continues to shrink, Nuolianxin's customer onboarding falls short of expectations, Pudan Optoelectronics' private placement fails or performance commitments are not met, then what awaits Memsensing is a large amount of goodwill on its books and increasingly ugly financial statements.
03 Is Acquiring a Loss-Making Company Worth It?
In this transaction, Memsensing paid 82.8845 million yuan to acquire a 24.30% stake from existing shareholders and an additional 94.2369 million yuan to subscribe for new shares representing a 29.70% stake, resulting in a total holding of 54% for a total consideration of 177 million yuan. Based on the valuation date of March 31, 2026, Pudan Optoelectronics' 100% equity was valued at 234 million yuan, representing a premium of 195.23% over the book net assets of 79.2594 million yuan.
Calculating this, the premium Memsensing is paying is not for what Pudan Optoelectronics has on its books today, but for its "scarcity" in the field of core components for fiber optic gyroscopes.
However, "scarcity" cannot conceal another unavoidable fact: Pudan Optoelectronics is currently still losing money. In 2024, Pudan Optoelectronics incurred a loss of 19.51 million yuan; in 2025, the loss narrowed to 4.84 million yuan, with revenue growing to 78.84 million yuan. Although the business is growing, it has not yet reached the point of profitability.
High R&D investment, significant capital expenditure for self-built production lines, short-term fluctuations in downstream procurement, new products not yet at scale... While these explanations fit the typical characteristics of the tech industry—"high investment, long cycle"—whether one survives to see the dawn remains unknown.
Previously, Pudan Optoelectronics' path to capitalization had not been entirely smooth either. In 2010, China North Optical-Electro Technology Co., Ltd. (600435.SH) attempted to acquire a 30% stake in Pudan Optoelectronics for 55 million yuan. The deal ultimately fell through, with the announcement citing "failure to reach consensus on the company's development strategy between new and old shareholders." In 2016, Pudan Optoelectronics listed on the New Third Board (835880) and voluntarily delisted four years later, stating the reason as "needs of business development and long-term strategic planning." After delisting, the company had no further public IPO plans.
In this acquisition, the counterparty also made performance commitments. Pudan Optoelectronics' average annual net profit from 2026 to 2029 shall not be less than 25 million yuan, with a cumulative total of not less than 100 million yuan over the four years. If the targets are not met, compensation to the listed company will be made from the remaining shares held by Pudan Optoelectronics' management.
A listed company with negative operating cash flow acquiring a company whose business model is not yet fully proven—every link in this chain cannot afford to make a mistake.
04 Epilogue
Nineteen years later, Li Gang and Memsensing stand at a new crossroads: success would mean using two acquisitions to leap from consumer electronics to industrial and military sectors; failure might mean sinking deeper into the quagmire of consumer electronics.
This article is from the WeChat public account "Morning Whistle M&A" (ID: MW-Group), author: Chen Mo.
