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A New Journey for Chinese Semiconductor Industry

At the [2024 International Component Industry Chain Global Expansion Forum] held on November 8, Luo Hairong, a semiconductor industry expert from Furui Human Resources Consulting Technology Co., Ltd., delivered an in-depth speech on "Semiconductor Going Global - The Next Wave of Nuggets", discussing the new roles and opportunities of Chinese semiconductor companies in the global market.

The status quo of the industry and the process of intelligence

Luo Hairong first pointed out that semiconductors and electronic components are the key factors driving global technological progress. With the acceleration of the intelligent process, the complexity of the use of electronic components will increase, bringing new challenges and opportunities to the semiconductor industry. Intelligence not only improves the performance requirements of products, but also opens up new market space for semiconductor companies.

Actions and opportunities

Despite the strong performance of some companies in the global market, China's semiconductor industry as a whole is still slow to act. Luo Hairong stressed that many companies are still in a wait-and-see mode, missing out on the huge opportunities that can be brought by positive actions during the epidemic. He mentioned that those companies that actively adjusted their strategies, reduced costs, and improved efficiency during the pandemic eventually achieved a leap in performance.

Figure: Luo Hairong, an expert in the semiconductor industry, delivered a keynote speech on

Figure: Luo Hairong, an expert in the semiconductor industry, delivered a keynote speech on "Semiconductors Going Global - The Next Wave of Nuggets".

Success case

In his speech, expert Luo Hairong mentioned a case of a company that has achieved remarkable success through cost reduction, efficiency improvement and all-out investment strategy during the epidemic. When the epidemic broke out in early 2020, the company adopted a strategy of "reducing costs and increasing efficiency", formulating a plan to "live a hard life" and "cross the snowy mountains and grasslands" to cut all unnecessary expenses. The owner even mortgaged the property and put all the resources into the company's development. In the end, the company achieved tenfold revenue in five years, and expects to exceed 1 million units of single cleaning robots sold globally in 2024, becoming the world's second largest brand.

Opportunities for Chinese companies to go global

Luo Hairong believes that the export of white goods and small household appliances of Chinese enterprises has swept the world, for example, Haier acquired General Electric's home appliance business around 2016 and became the world's largest home appliance company. In addition, Shenzhen has other of the world's largest export brands of small household appliances. And the popularity of smart devices in overseas markets is also increasing. Chinese companies need to use speed, efficiency and cost management capabilities to impact overseas markets. A large number of electronic components and chips will be used in these household appliances, and in the future, algorithms, radar and other technologies will be involved. This is also a trend of semiconductors going overseas. The competitiveness of Chinese companies in the global market is not only reflected in speed and efficiency, but also in cost management, hard-working spirit and strong organizational resilience. Compared with the slower decision-making speed in global markets, he stressed that Chinese companies should rely on these characteristics to gain an advantage in the international market.

Figure: Going Global is the best solution for Chinese enterprises to fight against uncertainties

Figure: Going Global is the best solution for Chinese enterprises to fight against uncertainties

Trends and strategies for going global

Expert Luo Hairong analyzed the overseas situation of A-share listed companies, and suggested that enterprises should go all out to go overseas when they have spare money. He proposed four ways to go to sea: products going to sea, building factories going to sea, supply chain going to sea and ecological alliances going to sea, providing diversified ways for different enterprises to go to sea. These strategies involve not only exporting products, but also establishing production bases in other countries, partnering with local companies, and forming a global supply chain network.

Policy support and globalization challenges

The encouragement of national policies and the trend of globalization provide opportunities for Chinese enterprises to go global, but they also face political, economic and legal challenges. Speakers emphasized the need for companies to be prepared in terms of product, branding, marketing planning, organizational systems, and tax compliance. He mentioned that companies need to pay attention to the global market dynamics, understand the laws and regulations of the target market, and formulate corresponding response strategies.

Figure: Encouragement and globalization trends provide opportunities for Chinese companies to go global

Figure: Encouragement and globalization trends provide opportunities for Chinese companies to go global

Conclusion

The speech concluded by emphasizing that going overseas is the best solution for Chinese enterprises to combat uncertainty, and encouraged enterprises to make up their minds now, prepare and go all out to seize the next wave of global industrial and supply chain transfer opportunities.

With the continuous changes in the global market, Chinese semiconductor companies are standing at a new historical starting point. By actively going Global, we can not only expand new markets, but also occupy a more favorable position in the global industrial chain. The presentation provided the industry with deep insights and practical strategies, heralding a new wave of gold nuggets in China's semiconductor industry. Chinese semiconductor companies need to seize this historic opportunity to win a place in the global market through innovation and strategic adjustment.


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