Opportunities and challenges faced by semiconductor manufacturers in China

      For China semiconductor, you want to chase the global semiconductor market leader first, need to make clear the first question is, what is the direction of your first focus?

Wafer factory or integrated business model? Storage? Analog chip?

      Any of the above requires the most basic IP and innovative support, but also need to have a talent to promote the engineer. These factors for the market leader, is a unique precious wealth, and for the new players, even if it is a new player with a strong capital, this is a great puzzle.

Wafer plant is a big challenge for China, especially for the wafer plant of the logic chip, because it seems, they all need a lot of cutting-edge technology manufacturing. Even China's own fabless in the design of the product after only the use of Taiwan or abroad to help them produce a chip to chip.

      In the past few decades, Samsung and TSMC and other companies to maintain their competitiveness, has been voted hundreds of billions of dollars to strengthen research and development. In fact, the model is very interesting on behalf of the plant, and China has to include smart phones, tablet light equipment to create a strong low-cost ecosystem.

      At the same time, the Chinese manufacturers from the previous assembly role to the system design, with their own cheap ecology, expanding the global influence of these consumer terminals. Many of these players do not need a very sophisticated technology and manufacturing capabilities. For example: SMIC China though technically fall back TSMC advanced game player one or two generations, but to meet the demand Chinese ease.

      The storage industry has undergone many changes in the past few decades, from the United States to Japan to South Korea to now possible Chinese, and Chinese have seen among the law, to build its leading position in the field of storage.

      But like many other areas, Chinese companies have no technical advantage in the field of storage. Such as Wuhan new core, they and Cypress semiconductor jointly announced a $24 billion investment plan for many years, in order to improve the capacity of its storage chip. In July this year, the new core was also Chinese merger giants reverted purple group name.

      The rise of the Internet of things detonated the market demand for sensors, power management chips and signal processors, which also gave China a chance to simulate the chip market.

China's radical in the field of electric vehicles and new energy to let the international players have a massive simulation of the will to attack china. Taking into account the dispersion of the whole industry, China may have the opportunity to selectively consolidate the analog alliance. This is also a great opportunity for SMIC and other Chinese players.

      China semiconductor manufacturers face different opportunities, they should pay more attention to explore opportunities for cooperation, to find a place to live in in the market, and lay a solid foundation for success:

1, the natural growth is expected to achieve the scale is almost impossible challenge, so China vendors should actively seek cooperation (usually found with a strong intellectual property following the market, these companies will benefit from the cooperation brings abundant funds, and more likely to enter the market at the same time, Chinese) at home and abroad pay attention to those who wish to from the semiconductor industry or investment company's enterprise, looking for mobile phone will.

In 2, the level of cooperation, win-win cooperation China manufacturers should pay attention to and multi-national companies, joint development, adjustment and production for the China ecosystem than the simple technology, low cost competition or transfer of intellectual property strategy is more effective.

3, Chinese manufacturers should also be targeted to lock the opportunity to build, so as to build capacity and win the talent. By actively dealing with regulatory and intellectual property issues, the implementation of effective post merger integration plan, they will be able to ensure the success of mergers and acquisitions, retain outstanding talent. The semiconductor market is not large, mergers and acquisitions fail to reduce the success rate of the next M & a transactions.

4. From a strategic point of view, the focus strategy is more likely to succeed than a broad or generally applicable approach. Successful companies focus on specific areas of supply and demand gap in the Chinese market, with market demand to achieve a leading position, followed by the Chinese government's focus on strategic and incentive policies. With the continuous evolution of the Chinese market and rapid growth, becoming the leader in a certain field will bring sustainable value returns.


 

(Source: Inside information)

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