Keep growing – the success story of a Cambridge-based technology company in China

Cambridge Mechatronics Ltd. (CML) issued one product manufacturing licence in China when it first set foot there in 2017. It is now a long-term partner with some well-known Chinese mobile phone brands, e.g. Huawei and Xiaomi.

A world leader in compact SMA actuator and control solutions, CML has some extraordinary numbers to show, such as 700 patents and the latest round of funding of $40 million in 2024. SMA (shape memory alloy) technology is used to control and position objects with the highest level of precision, such as in mobile phone cameras, haptics, 3D sensing and AR.

How did the Cambridge company make it? Andrew Bickley, Co-Managing Director for Global Sales & Marketing at CML, shed light on the fascinating story in a conversation with Crayfish.io.

It was the first such interview in a new series by Crayfish.io, entitled ‘Succeeding in China – real stories told by UK business executives.’

CML’s China operation grew from one licensee to 5 in 10 years and it can count Huawei and Xiaomi as its main customers, supported by the CML offices in Shenzhen and Shanghai.

CML SMA (shape memory alloy) technology is used to control and position objects with the highest level of precision, such as in mobile phone cameras, haptics, 3D sensing and new applications like AR.

China has been one of CML’s key overseas markets since it first set foot there; 40 of its 45 products are for Chinese customers. Its business in China has grown steadily against the backdrop of a fast-changing market landscape and the wider global business environment. The scaling goes on, and CML sees its China business doubling in value in 3-5 years.

So, how did it start? Bickley says: “We started as early as 2013 and our technology is called optical image stabilisation, which is appropriate for smartphone cameras. In 2013, we were working with an American company to produce actuators to enable this technology.

“Then, optical image stabilisation started to become very important in the Chinese market and there was, around 2015, a lot of interest from Chinese companies to use what we call OIS optical image stabilisation.

“We had our first licence in China in 2017 and that was with TDK. And then we started to see a lot of interest from Huawei who really grasped the advantages of this technology and started to work with us exclusively on a particular product series of SMA.

“We were very successful with Huawei introducing it into the P30 Pro and the Mate 30 Pro products. Since then, Huawei has been able to innovate with this technology so we’ve been a regular part of their camera solutions.

“Building on that, we started to expand our presence in China, where we have five manufacturing licensees who create optical image stabilisation as actuators which can be delivered into smartphones.

“We then progressed to design controller ICs because, although we were providing the actuator technology, we were relying on third parties to provide the controller. So we started to develop the controller IC and can now provide controller ICs as part of the total solution.

“But the big benefit for our customers where we have progressed from 2013 to where we are now is that we can provide a complete solution of the actuator, the control algorithm and the semiconductor product to host it.

“One of the crown jewels of CML is that we are experts in the algorithm development. We have control algorithms which are patented and protected, so that our competitors can’t do it.

“Our biggest advantage is we are experts in the mechanical design of actuators. We are experts and have patented technology for the control algorithm and that algorithm is now hosted on an optimised controller IC that we provided to the total system solution.”

Bickley said protecting its IP was crucial to success anywhere, including in China. “A lot of our engineers come from Cambridge universities and they’re very dedicated to innovation and filing patterns and coming up with new ideas. So that’s the core DNA of our company – the heritage of innovation and the patterns that we are able to generate.”

Bickley cites a faster transfer of engineering support and engineering functions to China as a key to CML’s success there. “A lot of companies will try to remain operational in China through their core competence in a Western country. We have learned many things about working in China and being successful in China.

“One of the biggest things is to transfer faster engineering technology and processes to China to be truly local. Western companies will have a preference to keep that at the headquarters and not relinquish it to be closer to the customer. So that’s one of the big learnings.

“The other one is tools. Chinese customers want to be self-serving. They want to do as much as they can and be autonomous. So you need to create tools to allow them to do that.

“And then the other simple learning point, but is sometimes difficult and it’s where you’ve been helping us is scaling up teams to get the right talent. To get the right type of person who can operate locally in China but also can interface with a Western company and understand sometimes the drawbacks of working with one.”

Crayfish.io observed that CML was not only enabling its Chinese customers to improve their design capabilities – but also to catch up on their Western counterparts in the process.

Bickley observed: “China is rapidly catching up, and in many cases leading. If you take Huawei for example, they are one of the best innovators of mobile phones in the world.

“So that gap between China and Western companies is closing very rapidly and we see a difference even over two to three years. We originally started in China on a consultancy basis with a customer support team.

“We very rapidly moved them to CML employed personnel and you know we’re expanding even now, but you need local people.

“Sometimes we get requests that are very demanding, very fast. Our local people will explain to us and get us to understand why we need to respond in a certain way because this is the way the Chinese market works.

“Western companies can get a little bit caught up in the process of ‘let’s do this with thorough documentation,’ whereas Chinese companies want it done right now. I think our local teams bridge the gap, between doing it right now and the Western companies that want to take a different approach.”

Communication between the Cambridge team and those in Shanghai and Shenzhen is vital, Bickley added.

“The magic is when you have a talented Chinese local organisation and, in our case, the UK innovation organisation which understands the dynamics and the way of working in a Chinese market.

“If you try to impose Western ways of working into the Chinese market, you will fail. Our local organisation and our local talent are keeping us educated in terms of what success means for our Chinese customers and how we have to support that.”

CML has shipped over 70 million devices in the past four years. From one product a few years ago to 45 products now – just six years later –with 40 out of the 45 products for Chinese customers. China has been CML’s focused market.

The majority of CML’s licensees, such as TDK, ZET, and GalaxyCore, are Chinese as they all have manufacturing in China. Huawei Honor and Xiaomi are among the well-known Chinese brands that have adopted CML’s SMA technology – fascinating growth throughout the pandemic.

Bickley cites Huawei as “a highly innovative company with fantastic engineers. They’re also very demanding. They produce the best products because they are demanding and they drive for success.

“So part of our success is being very well aligned with Huawei in terms of their roadmaps, their requirements, and their vision for what needs to happen in the camera application in the next two to three to five years forward.

”And then we need to be able to demonstrate to Huawei that they’re with the right partner and that we are capable of giving them the solutions that they need in three to five years.

“What you have to do is tune your roadmaps and your technology into a lead customer like Huawei. And you’ve got to be prepared to have dedicated teams which understand how to work with demanding customers who are driving for the best possible products.

“You’ve got to ring-fence those resources and have them dedicated to people like Huawei so that they learn from Project One, and then they go on to Project 2, and Project 3. And we take all of those learnings to become a highly efficient design partner with Huawei.”

To other Western tech companies, would CML recommend setting up sites in multiple locations for different purposes when they go to China?

Bickley says: “I definitely would because if you’re supporting your customers regularly there, you’re visiting them regularly every week. Also, there is the on-demand that you need to react to.

“If we have partners or customers in Shanghai who call us up in the morning and explain an issue we want to be with them within an hour. I think you have to have multi-site facilities across China. China is so big so you need to choose carefully.

“The guidance I would give to anybody is you need to be close to your customers and put the design support and resources very close to them. Being able to be on-site with customers within an hour or an hour and a half if a critical problem comes up is really important.”

In terms of cultural differences, Bickley says Western companies trying to operate in China need to leave the Western mentality behind. “You have to have a completely open mind. There are going to be approaches and ways of working, communication styles, and meeting environments which are totally new and different.

“You need to embrace that and absorb it, but you must be complemented by your local team who will navigate you through some of these things. There are many meetings that I’ve been into that I’ve come out a little bit confused and my local team has been able to explain to me what actually had happened, what had been communicated and what it meant.”

Obstacles that CML has had to overcome, working in China? Bickley says: “Some of these obstacles will not be a surprise. The first one is IP protection. If we’re going to be operational and support customers in China we need to make sure we have our IP protected and that’s for the benefit of our customers and our supply chain partners. So I think an extra effort around IP protection for China is always an obstacle that you need to address.

“The other one is competition. Local competition develops much faster in China than it does in Western countries. That means if you’re developing a product portfolio for China you have to be super fast because Chinese local competitors make advances quite rapidly.

“Staying ahead of the game on road maps and product development and innovation, that’s really important and it’s a different pace in China.”

Bickley cites the challenge presented by the geopolitical landscape. “We need to be sensitive to that. It means you need to have local Chinese supply chains so that you’re not influenced by maybe restrictions or other things that are going to come up around the geopolitical landscape.”

Does CML have any concerns about the fact that most of its business comes from China when it has to present the company to investors or other interested parties?

Bickley says not – “because we’re diversifying our business. The China smartphone market is very important. It’s been our first market but we have other markets that we are pursuing.

“We have the medical market which is global. Actuators and precision actuation and control, our ICs apply to that market. That will take us into markets outside of China. We have been operating in the AR and VR market, which is predominantly outside of China right now.

“So in terms of when we were going through the investment rounds, the diversification of our business was an important point, but so too is the potential of the technology that we have.

“Our technology can go into multiple applications. It’s just that we’ve been very successful in the Chinese market and we will be successful in markets outside of China as well.”

Bickley said China was an incredibly important market for CML and the company wanted to “sell more of our system solutions in China. Our controller IC platform and our silicon platform are very important. We will be having multiple products which will give benefits to our customers. They will be higher performance. They will be lower power. There will be lower costs. There will be better tools and a better service.

“We will expand in China and would expect over the next three years our business would easily double in value there. We see a good future in China. We are investing in our core semiconductor capabilities and in some efficiencies and tools that will give our customers the best possible experience when they engage with CML. We are expanding our teams.”

• With operations in Cambridge UK and Beijing, Crayfish.io is a trusted adviser and partner dedicated to helping UK businesses to succeed in China. It provides comprehensive UK-China business services in strategic consultancy, IP protection and commercialisation as well as a digital platform.