SHENZHEN, China – Will China ever create an enterprise comparable in size, creativity and impact to Texas Instruments?
So far, it hasn't come close. For now, there’s not much chance it will.
With
surprising candor, Chinese executives here acknowledge last week (Sept.
7) that they face a long road ahead before China can give birth to a
chip company of TI’s caliber. An industry panel including Chinese
fabless CEOs, executives working for EDA vendors and a foundry along
with a professor from Tsinghua University, debated the matter during the
China Fabless CEO Forum & Awards event, organized by EE Times-China, a sister publication of EE Times.
China
is rapidly transitioning from its role as a manufacturing center to a
design center for the electronics industry. The latest annual China
Fabless Survey by EE Times-China revealed that volume production of
digital ICs at 45 nm or below by mainland China local fabless companies
has grown by 33.3 percent over the previous year.
The panel
discussion lacked the usual chest-thumping by the Chinese executives.
Instead, there was soul searching and a list of seven reasons why China
is still better at tea than TI.
1. Many Chinese fabless companies are too overwhelmed to survive.//大多数中国的Fablesss公司还在迫于生计,尚未解决温饱问题。
Jeff
Ju, president and CEO of Dioo Microcircuits Co. (Shanghai), said,
“Local guys are under tremendous pressure to survive.” Local Chinese
fabless with no IP of their own are starting their own R&D from
scratch. They can’t, at this point, imagine a way to catch up with a
behemoth like TI. Sometimes, because they’re consumed by day-to-day
operation, “local Chinese fabless aren’t even familiar with the
technologies and IPs that foundries can offer them,” Ju added.
2. Lacking multiple product lines.//缺乏多产品线。
Few
Chinese fabless companies have multiple product lines. Many, too busy
chasing what they perceive to be the hottest market of the moment, are
one-trick ponies. In contrast, TI has revenue coming from multiple
sources ranging from
Analog to embedded (microcontrollers), wireless and
others.
3. They don’t know how to get bigger.//不知道如何做大。
Many
international companies grow “big to bigger by mergers and
acquisitions,” but this isn’t so for Chinese fabless companies, said
Shaojun Wei, professor at Tsinghua University (Beijing). The
first-generation CEOs of small local fabless companies are “too
emotionally attached” to the companies they founded, and they find it
very difficult to merge with other companies, he explained. “That’s a
big problem here.”
They suck at forecasting
4. They’re not open minded.//思想不够开放。
“Fundamental to mergers is to agree with other companies,” said Luo Yi,
CEO of X’ian Semipower Electronic Technology Co. (X’ian). Chinese
executives, generally speaking, don’t communicate with other companies
with an open mind about the possibility of a mutually beneficial deal.
“Except for Huawei, I don’t see many Chinese fabless companies that can
pull that off.”
5. They’re not identifying the right segments.//国内的fabless公司和TI完全还不是一个量级。
“To beat TI, China has a long way to go,” said Zhang Jin fang, CEO of
Chipone (Shenzhen). The most important thing for us is to find the right
segments of the market that we should be in, he added. “To identify
that strategic market is hard.” So far, what usually happens is that a
whole bunch of China fabless firms spot the same opportunity and go
after the same or similar market segments en masse. Then, they all try
to beat each other on price.
6. They suck at forecasting.//中国的Fabless公司不擅长预测市场。
Chinese fabless companies are terrible at forecasting the market demand
for their chips. A Chinese market environment that tends to favor the
reselling of chips in Hong Kong, for example, creates a broad impression
that there’s a chip shortage. The inevitable result is overproduction
and an oversupply of chips, thus fueling price competition and a buyer’s
market.
7. The "spirit" to match TI is willing, but the substance is weak.//赶超TI只是一种精神上的愿望,离实际差地太远。
China fabless companies aspire toward TI’s example, but “TI has
something special Chinese companies can’t touch,” said X’ian Semipower’s
CEO Luo. “TI has the big bucks it takes to invest in the future.” It’s
hard for most Chinese companies caught up in today’s market forecast to
think five to 10 years into the future. Even if they were tempted to
invest for the long-term, they simply don’t have the capital to spare.
They either need a sure thing — which is impossible when you’re
envisioning scenarios that have yet to develop — or a whole lot more
money than they have right now.
Huawei could be China’s TI someday, Luo predicted. But he’s not betting on it.
-- Additional reporting by Miya Kong