Chip maker puts faith in China
Despite current supply shortages bedeviling the semiconductor industry in China and the rest of the world, Analog Devices Inc., a U.S. semiconductor company, said it is eyeing the Chinese market for big growth opportunities following double-digit growth in the country in the 2021 fiscal year, and given pent-up demand.
The company, known as ADI, recognizes that China is its fastest-growing market that accounts for more than 20% of its total sales, comparable to the European market, said Zhao Yimiao, general manager of ADI China Technology Groups.
“China has always been a very important market for ADI. The massive efforts to contain the COVID-19 pandemic have helped economic activities to recover quickly in China. And local customers are also moving fast to restore production.”
In August China’s State Administration for Market Regulation gave antitrust clearance for ADI’s $21 billion acquisition of Maxim Integrated Products Inc., another U.S. semiconductor company.
Any semiconductor company that has significant exposure to the Chinese market, the world’s biggest, is required to obtain Chinese regulatory approval when it merges with, or acquires, another company anywhere in the world. This regulation is in line with similar ones in the United States, the European Union and other markets.
Maxim is strong in chips used in the automotive and data center markets, while ADI’s chip products serve broad industrial, communications and healthcare needs.
The deal could help ADI better meet the Chinese market’s growing demand for a wide range of chips, said Fu Liang, a technology analyst.
As China deepens efforts to promote industrial upgrade and digital transformation, the Chinese market plays an important role in the world, ADI said. The implementation of national strategies such as new infrastructure projects has brought unprecedented development opportunities for the industry.
“On the one hand we need to quickly respond to the needs of the Chinese market, where everything is developing very fast. On the other we are based on ADI’s global research and development system, which can help bring innovative products to the local market,” Zhao said.
“In addition to using the international semiconductor supply chain system, we are also working with local supply chain partners in the hope of establishing a more complete local supply system, covering manufacturing, packaging and testing, to offer more substantial support to Chinese customers.”