Legend Silicon, once a red-hot China-U.S. startup focused on DTV chips, closed its U.S. operation in late 2011. What went wrong and what did we learn?
Naturally, Karamchedu has analyzed the lessons he learned, reducing his
insights to the comprehensive list of “disconnects” laid out in his
But during the interview, he highlighted the following
five points--as something that either caught him by surprise, or what
he saw his team struggling with at the U.S.-China chip company.
1. Never underestimate the political environment
read the political environment correctly is a serious challenge--both
in China and the United States. While many EE Times readers often advise
us to keep politics out of stories, the consequences of not knowing
how politics works in a certain region (or being clueless about who is
favoring whom in that region due to which reasons) are dire.
At the time
of Legend Silicon’s startup, the transition to DTV in China was moving
more slowly than anyone had expected (despite the Olympics).
who was going to pay the transition cost--necessary to make changes in
China’s broadcasting infrastructure--remained in question. Chinese
officials might unexpectedly ask for financial assistance, expect
kickbacks or decide to do nothing. Simply put, there was no orderly
transition process in place, and there was, hence, no conventional open
market ready for chip vendors like Legend Silicon to jump in. Instead,
the small new company found itself doing the heavy lifting needed for a
nation’s DTV transition.
2. Novelty vs. innovation
in the Western technology field, what used to be considered “invention”
is now reduced to “innovation,” which often amounts to the simple
addition of new bells and whistles to systems. China is now taking that
trend to another level. They love grabbing onto “novelty” (whether it is
a new trend for 5-inch screen smartphones or quad-core apps processors)
and developing those gimmicks quickly. They know how to add
“innovation-cum-novelties” at low cost.
It’s almost as though
the Chinese have learned how to “blast” gimmick innovations made by the
West and they’re now beating the Western companies at their own game,