Silicon Power Technology was elected as a member of the Sichuan Province Integrated Circuit Industry Alliance
On January 15th, the inauguration conference of the Sichuan Province Integrated Circuit Industry Alliance was held, which marked the official establishment of the Sichuan Province Integrated Circuit Industry Alliance. The conference voted and approved the candidate list of the first council chairman, vice chairman, expert committee, and director. At the conference, Chengdu Silicon Power Technology was elected as the member unit of the industry alliance. The conference also held the establishment ceremony of the co-governance council of the integrated circuit industry in Chengdu Hi-tech Zone. Jesse Parker, the general manager of Silicon Power Technology, unveiled the establishment of the co-government council and delivered a keynote speech entitled "Finding Opportunities in Integration and Discrete" .
The establishment of the Chengdu High-tech Industrial Development Zone's Integrated Co-Governance Council aims to solve the "pain points" of the traditional government-led industry development model, build a new model of industrial development with the participation of the government, industry and academia. It will promote Integrated circuit enterprises to change from being managed and served to self-managed and self-service subjects, thereby improving the efficiency of resource allocation, enhancing industrial advancement and the level of professionalization of enterprise services. The scale of the co-governance council for the integrated circuit industry established this time is 70 governing units, composed of representatives from industry enterprises, colleges and universities, and social organizations. The members of the board of directors have been negotiated and elected from the leaders of key enterprises and institutions who have made important contributions to the development of the Chengdu integrated circuit industry and are willing to participate in the co-governance of the Chengdu Hi-tech Industrial Development Zone.
In his keynote speech, Jesse Parker said that by reviewing the development history and development context of integrated circuits in China and the United States, we should find some regular phenomena. In the field of digital logic such as system chips and memory, the integrated circuit industry generally shows a trend from discrete towards virtual IDM. However, in the field of power semiconductors, the requirements of a close combination of process and packaging technology in design as well as improving the design level, efficiency, and gaining market recognition determine that physical IDMs have the advantage in this field. Integration and Discrete is the general scale of the development of the integrated circuit industry, and it is also an automatic adjustment and optimization of the industry by the market. In the development process, it can create many useful opportunities for us. Jesse Parker said that integration and discrete is not only an industrial phenomenon, but also a way for companies to optimize their own businesses. Companies will divest, split and sell non-critical and non-competitive businesses and departments, and focus on the core direction, which is conducive to concentrating resources for disruptive technology, thereby improving product competitiveness. Similarly, mergers and integrations in core areas will also help achieve scale advantages and improve product competitiveness. Jesse Parker cited the case of TI and NXP's enterprise integration to prove his own point of view. Jesse Parker said that during the development process, TI adopted a series of acquisition, divestiture and business termination measures to eliminate the bad operating assets, focusing resources on the areas of analog and power, and improving the market competitiveness of core products and technologies. TI's average operating profit increased from less than 10% to 40% in 2017. So is NXP. It has also achieved profit growth through the divestiture of non-core businesses, which has strengthened the company's development potential. Facts have proven that two companies with the same business and the same size, achieving professionalization through acquisition and divestiture, win 10% more operating profit than companies that did not do acquisition and divestiture. On the other hand, the three major EDA vendors in the world, Synopsys, Cadence, and Mentor Graphics, are typical examples of growing into industry leaders through the acquisition of other companies. As of the end of 2019, there are nearly 1,800 design companies in mainland China, of which the number of companies with a turnover of more than RMB 100 million yuan accounts for only about 14%. There will be many corporate mergers and acquisitions in the next five years, which will bring many changes to the semiconductor market. During this period, relevant enterprises should give full play to their own endowment advantages, look for opportunities between "splitting" and "combining," and expand and strengthen their own enterprises.