Editor's note: Gu Ge, formerly known as Gu Rongxiang, is currently the chairman and general manager of Xi'an CHINA Star He continued to serialize a series of essays on his personal WeChat public account, recording his own cognition and perception of the sensor and Internet of Things industry, and China Exportsemi authorized to reprint his article, so that readers can look at the past, current situation and development of this industry from the perspective of a senior industry person. For ease of reading, the article has been reprinted and you can find the original text at the end of the article if necessary.
In this article, Gu Ge traveled to Deyang, Sichuan Province by high-speed rail to participate in the 2024 China Electronic Components Association Summit and related sensor industry development conference, sharing what he saw and heard during the trip. During the conference, he made new friends, learned about economic analysis within the industry and new developments in the sensor industry. At the same time, he also observed the phenomenon of industry involution under the current economic situation, involving many fields such as entity enterprises, certification bodies and government investment.
There are different views in the industry on the phenomenon of involution. Some people believe that involution is an important means to promote the progress and promotion of the industry, leaving high-quality enterprises through competition and reshuffle; Others are worried about cannibalism and excessive competition brought about by involution, believing that this will weaken the overall competitiveness of domestic enterprises.
Gu Ge believes that there are positive and negative voices in the involution phenomenon, but positive voices and optimistic attitudes are the driving force for the development of the industry. Under the current complex and changeable economic situation, the phenomenon of involution is becoming more and more significant, which has become a common challenge for enterprises. However, the key lies in how enterprises look at involution rationally, actively respond to challenges, and find a development path suitable for themselves.
The editor of China Exportsemi believes that although the involution phenomenon has brought pressure and challenges, it also provides opportunities and impetus for enterprises. The government and all sectors of society should strengthen the attention and guidance of the involution phenomenon, promote the coordinated development of the industry, reduce unnecessary competition and internal friction, and jointly create a healthy and orderly market environment to achieve the sustainable and healthy development of the industry. The following is the original text shared by Gu Ge:
High-speed rail has really shortened our travel time and made us more efficient. Technological progress has unconsciously brought convenience to each of us; The system is civilized, quietly and silently brings us joy.
Yesterday afternoon, I took the high-speed train from Xi'an to Deyang, Sichuan Province to participate in part of the 2024 China Electronic Components Association Summit, and the fourth council of the ninth session of the Sensitive Components and Sensors Branch of the China Electronic Components Association.
At the same time, I listened to the analysis of the major component manufacturers on this year's and next year's economy, of course, in combination with the industry. The situation is forcing people to fight, and the situation is not optimistic. Whether it is competition or involution, it has become the norm in the post-epidemic era. From the perspective of some sub-industries, it is difficult to fully judge the current situation of China's economy, but "a glimpse of the whole leopard" can also understand a thing or two. Gu Ge agrees with the one-sentence analysis of the boss of AVIC Optoelectronics, "2025 will have a cautious and optimistic attitude".
Figure: The site of the 2024 Sensor Industry Development Conference held by the Sensitive Components and Sensors Branch of the China Electronic Components Industry Association
This morning, I arrived at the Deyang Wen Germany Inter-German Exhibition and Convention Center, which is the venue for this conference. From the north side of the convention and exhibition center, the scenery of the convention and exhibition center is pleasant, beautiful and exquisite, although the golden autumn Deyang is still hot, but the morning is still refreshing, like a beautiful architectural model.
This morning, I participated in the 2024 Sensor Industry Development Conference held by the Sensitive Components and Sensors Branch of the China Electronic Components Industry Association, and learned a little new situation, increased a little new knowledge, and met some new faces.
In the afternoon, the comprehensive group of the sensitive branch, a pole of people, sat together and chatted about the situation of their respective companies, the bitter 2023, the sour 2024, and the sweet 2025, which seems to be the current situation and future of most sensor companies. Please say that "involution" has become a hot word in the business world in 2024, just like the weather in China's big cities in the summer and autumn of 2024.
Under the current economic situation, entity enterprises are involuted, certified enterprises are also involuted, and government investment is more involuted. How to look at the involution, it is really a matter of opinion, and the wise are wise. Enterprises that make products are the most severe in involution. The involution of large-scale products is more obvious, the product quality is almost the same, only the price reduction, a "Golden Road" that can be accepted by customers; Varistors, thermistor industry is particularly prominent, "the volume can't move", I want to change the channel to the MEMS industry, don't you know that the MEMS industry is also tragic.
Picture: The site of the 2024 China Electronic Components Industry Summit
The large-scale application market is exhausted from rat race, it will be transferred to the after-sales market segment. For example, the encoder market in the general machine tool industry, including optoelectronic encoders and magnetic encoders; Automotive, including passenger cars and commercial vehicles, rear-mounted pressure and temperature sensor market. If the civilian sensor market can't be rolled, it will be rolled into the military sensor market; The big track sensor market can't be rolled, so it will be rolled to the small track sensor market; If the domestic market is not moving, it will inevitably be rolled into the foreign market. The involution of the real economy has also infected the certification bodies, whether it is domestic certification bodies or foreign certification bodies in China. The price of the same CE certification is several times different, and foreign customers are also uneven, and some only look at the certification, and do not look at which agency is more authoritative. It has created opportunities for some "company certification mill", and has also reduced the overall quality of Chinese sensor companies. This kind of rat race is harmful to others and oneself.
The economy is difficult to operate, and the financial pressure of governments at all levels is also great, so investment promotion has also reached a new height. Tax incentives, land incentives, rental concessions, financial subsidies, as long as you can attract business, everything is easy to do. We cannot develop local advantageous industries according to local conditions, but rather converge on the same side. Sensor valleys, sensor bases, and sensor parks all over the country emerge in an endless stream, and they do not seriously analyze the sensor industry, where is the problem of difficulty in attracting investment for sensor enterprises?
The previous competition has now changed its name to involution, and the industry's attitude towards involution is different. Involution is always stronger than lying flat, involution is more positive than lying flat, and action is faster, which is a positive factor and a sound. Involution is an important means to promote the progress of the industry and improve the industry. The industry shuffle, wash away inferior enterprises, and leave high-quality enterprises, so that the country can progress, this is another loud voice. Gu Ge believes that these are two positive voices, an optimistic attitude and an enterprising spirit. Involution is cannibalism, leaving room for foreign investment, reducing involution, and coordinated development, which is the third voice. Involution is a measure of survival, and it is hoped that in this difficult economic period, involution will be reduced and everyone will survive, which is the fourth voice. Gu Ge believes that this is negative, and it is by no means the words and actions of the strong.
Original：When traveling on a business trip Gu Ge talks about sensors (124)
