Chi­nese ap­pli­ance mak­ers bet on chipsets

Sec­tor strives to break reliance on im­ported tech­nol­ogy

Global Times - - Biz Overview - By Zhang Hong­pei

As China moves along the path of in­tel­li­gent man­u­fac­tur­ing, some do­mes­tic home ap­pli­ance mak­ers have an­nounced plans to in­vest in the chip sec­tor, a new strate­gic arm for their growth amid the coun­try’s quest for in­de­pen­dence in ad­vanced tech­nol­ogy. Gree Elec­tric Ap­pli­ances Inc, based in Zhuhai, South China’s Guang­dong Prov­ince, said that a wholly owned sub­sidiary it re­cently es­tab­lished for the chip in­dus­try has be­come an im­por­tant part of the com­pany’s devel­op­ment plans. The sub­sidiary, Zhuhai Zero-Bound­ary

In­te­grated Cir­cuit, was reg­is­tered on Au­gust 14 with 1 bil­lion yuan ($146 mil­lion) in cap­i­tal and its le­gal representa­tive is Dong Mingzhu, Gree’s chair­woman, ac­cord­ing to do­mes­tic en­ter­prise in­for­ma­tion provider

The new arm will fo­cus on chip de­sign, with the production to be handed over to orig­i­nal equip­ment manufactur­ers. How­ever, the pos­si­bil­ity of Gree mak­ing the chips in the fu­ture is not be­ing ex­cluded, ac­cord­ing to a post on Gree’s of­fi­cial WeChat ac­count on Tues­day.

Gree is con­duct­ing re­search into ad­vanced fre­quency con­ver­sion drive chips and host chips, and it has al­ready achieved its own de­signs for master chips for air con­di­tion­ers, said the post.

Ding Shao­jiang, an in­dus­try ob­server and founder of tech­nol­ogy web­site, told the Global Times Tues­day that com­pared with cen­tral pro­cess­ing unit

“Syn­ergy be­tween the ap­pli­ca­tion of tech­nol­ogy and re­search can be ide­ally achieved.” Ding Shao­jiang, founder of tech­nol­ogy web­site

chips, which are used in per­sonal com­put­ers and mo­bile phones, chips for home ap­pli­ances such as air con­di­tion­ers have a much lower thresh­old.

Fo­cus­ing on one “node” of the chip in­dus­try, for ex­am­ple de­sign, is fea­si­ble for Gree as this seg­ment is rel­a­tively sim­ple. It also re­quires less in­vest­ment in com­par­i­son with chip man­u­fac­tur­ing, which de­mands so­phis­ti­cated tech­nol­ogy and fa­cil­i­ties that only a few big en­ter­prises can af­ford, said Ding.

How­ever, it’s un­clear if the tech­nol­ogy used in chips for ap­pli­ances will sur­pass that of smart­phones, said Ni Guang­nan, a pro­fes­sor at the Chi­nese Academy of En­gi­neer­ing.

“Start­ing from chip de­sign is a wise

move for Gree since it can take ad­van­tage of China’s high-level de­sign stan­dard rep­re­sent­ing years of devel­op­ment and then drive other seg­ments along the chain,” Ni told the Global Times Tues­day. The move will en­able Gree to achieve re­sults within an ex­pected pe­riod.

Gree’s chips will be first used in its own air con­di­tion­ers next year, Dong told Gree’s gen­eral meet­ing of share­hold­ers in June, ac­cord­ing to the post.

In Ding’s view, Gree’s move into the semi­con­duc­tor in­dus­try is mainly in­tended to give it more voice on the up­per part of the sup­ply and value chains. The move will also help it cut costs.

Gree spends bil­lions of yuan an­nu­ally to buy chips, it said in the WeChat post.

Amid China’s rapid move to­ward smart man­u­fac­tur­ing, sev­eral home ap­pli­ance pro­duc­ers are bol­ster­ing their pres­ence in the chipset sec­tor, a key com­po­nent to the shift.

In May, Shen­zhen-based elec­tron­ics man­u­fac­turer Konka Group Co an­nounced plans to ex­pand into the semi­con­duc­tor sec­tor and in­crease its re­search and devel­op­ment in­vest­ment.

“China still lags be­hind de­vel­oped coun­tries in some core com­po­nents in the in­ter­na­tional home ap­pli­ance in­dus­try, yet en­ter­prises should not ne­glect op­por­tu­ni­ties that the huge mar­ket can pro­vide,” Ding noted.

“Syn­ergy be­tween the ap­pli­ca­tion of tech­nol­ogy and re­search can be ide­ally achieved in the mar­ket,” he stressed.

Ni said that “in the process of tech­nol­ogy ap­pli­ca­tion, which is one of China’s ad­van­tages, our weak­ness in ba­sic re­search such as al­go­rithms can be made up.”

Photo: VCG

Cus­tomers choose in­tel­li­gent re­frig­er­a­tors in Changzhou, East China’s Jiangsu Prov­ince.

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