4 Reasons for Low Profits of China's IC Design

According recently media report: analog IC designer -  Linear  achieve profit margins above 75%, more than Apple and Microsoft, known as "the most profitable company.

The reason for Linear Technology's focus on product innovation and performance demanding industrial, communications infrastructure and automotive markets, 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 makes sufficient efforts in markets, products, customers and team, then achievements of today's high-profit, and for 30 years to achieve sustainable development.

The chairman of the China  Semiconductor  Industry Association IC Design Branch,  Wei Shaojun pointed out in the field of semiconductors, the average gross margin level of 40%, the Chinese IC design industry average gross profit level is 12.39% lower than the international average, the average gross of the top ten design companies profit of 31.3%.

Then, Wei Shaojun pointed out 4 reasons for low profits of China's IC design industry.

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.

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