Tuesday, February 21, 2012

Local IC Design Industry Profit Margins is Less Than Overseas

Recently, Linear Technology, Analog IC design to achieve more than 75% of the profit margin of more than Apple and Microsoft, known as "the most profitable company. In semiconductors, the international average level of gross profit is 40%. Last year, IC design, the chairman of the China Semiconductor Industry Association IC Design Branch, Wei Shaojun pointed out, China's  IC design  industry average gross profit level is 12.39% lower than the international average of 31.3%, the average gross profit of China's top ten design enterprises.
Follow the strategy is the main reason. A large number of IC design enterprises due to the lack of the ability of the product definition, have to follow the strategy. In the IC to enter the high-cost era, there is no sufficient size and gross profit, it means the ability to re-enter the enterprise.
Linear demanding industrial, communications infrastructure and automotive markets, focusing on product innovation and performance and to avoid the field of consumer electronics products, this marketing strategy to maintain high profit margins provided a guarantee. Another factor is that most of Linear Technology's products are proprietary, high-performance market segment, there is no direct replacement products. In addition, the link of customer communication, Linear arrangements the most experienced design engineers to communicate with customers to obtain first-hand information of the customer design challenges. Pay more attention to team building, team stability and solidarity, and not deliberately seeking scale.
Linear Technology markets, products, customers and team sufficient efforts and achievements of today's high-profit, and for 30 years to achieve sustainable development.
The reason for China's IC design industry with lower profit margins with a number of reasons: First, the lack of product innovation, market price is not high. A large number of IC design enterprises due to the lack of the ability of the product definition, have to follow the strategy. Therefore, product innovation is not naturally sell at good prices.
Secondly, due to strategy, Pioneer tend to cut prices to suppress the latecomers, so in order to sell the product to the latecomers had to take low-cost strategy. The pioneer in lower prices to sell the products of this generation has been ready for a new generation of products. Through increased sales of a new generation of products, you can still maintain a good price.
Finally, despite the overall costs of the Chinese enterprises in Europe and America compared is low, therefore reduced the occupancy of gross profit. However, due to technical skills is not enough local businesses, often higher than the European and American products, manufacturing processes, this has led to the rise in the cost of products hard. Before and after dropping a liter, its own advantages tend to be offset.
Source: www.hqew.net/events/news-article/2163.html

1 comment:

  1. IC design technology is growing so fast. In many countries developed their system by this technology system. Asic Design

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