BEIJING, China– Lenovo, the second largest smartphone supplier in China, will get into the chip design business with a special focus on smartphones and tablets, EE Times has learned.
The company, which has maintained a small IC design team consisting of about 10 people over the last decade, is now committed to expanding this team to about 100 engineers by the middle of this year, according to a China-based industry source with direct knowledge of Lenovo’s recruitment of chip designers.
Lenovo will be hiring 40 engineers in Shenzhen area and 60 in Beijing, according to the source, who asked to remain anonymous.
Lenovo, based in Beijing, did not immediately respond to questions about these plans.
This initiative appears to be driven by the company’s desire to control its own destiny in smartphones and tablets--a la HiSilicon at Huawei. (HiSilicon is a chip division of Huawei.)
Unlike Samsung or Apple, Lenovo has a checkered history of adopting different apps processors from a variety of suppliers for its smartphones. The company adopted MediaTek’s MT6573 in the Lenovo A60 smartphone in 2011, while it became the first company--outside Samsung --in 2012 to design in Samsung Electronics’ quad-core apps processor Exynos 4 in its LePhone K860.
Lenovo, however, announced earlier this year a 5.5-inch smartphone, dubbed K900, by integrating Intel’s first dual-core Atom chip for phones. The Atom Z2580 is said to have roughly doubled the CPU performance of Intel’s single-core Medfield processor used in Lenovo’s K800 phone, which was introduced a year ago.
While Lenovo might have been enjoying its freedom in choosing the best apps processor available on the market, reality bit hard, sources said, when Samsung Electronics refused to supply its newest version of the Exynos apps processor to the Chinese company.
Market share of the top five vendors for China’s
smartphone market in 2012
Source: Strategy Analytics
Indeed, on the growing Chinese smartphone market last year, Lenovo became Samsung’s biggest rival--with Samsung holding a 17.7 percent share, with Lenovo at 13.2 percent and Apple at 11 percent.
Meanwhile, Lenovo has been beefing up its senior management team to prepare itself to become a leading consumer electronics vendor.
The world's second-largest supplier of personal computers last month (February) named Jerry Yang, the co-founder and former CEO of Yahoo, as a "board observer.” Further, Lenovo added Tudor Brown, one of the founders of ARM, as a non-executive director to Lenovo's roster of seasoned veterans.
It’s far from clear if an internal group of mere 100 IC engineers can make a dent in the already crowded apps processor market. And yet, as Shao Yang, CMO of Huawei Device, recently said in an interview with EE Times, having a chip division of its own could help [the handset company] “negotiate better with other semiconductor companies.”
Very true. But I am also seeing this vertical integration trend lately among companies wanting to differentiate. I used to think that's a move already discredited by this industry,..but apparently not.
I remember Motorola's genius idea of spinning out their semiconductor division, and then realizing after the fact that it's hard to differentiate your product when you're using exactly the same chips as everyone else.
But, OTOH, the scale required to compete in apps processors or integrated transceivers is so huge as to be daunting.
It is always better to define your own destiny. When the supplier of an important component is also your competitor, as soon as your demand is not fulfilled, what would you do?
On the other hands, sooner or later, China's electronics will go to build their own chips, processors, flash memory, power controller, what not. It is a logical move and given they can still compete in cost, why not?
Competition is a good thing. To a big picture, it is a good thing. Question is how the other ex-leading company and current leaders will react to keep or to expand their market position.
Another argument against this Lenovo move is they may be too late to the party. But considering good reputation Lenovo has among Chinese engineers, they could snatch up the best and the brightest for this new team to get the job done.
"Lenovo, the second largest smartphone supplier in China, will get into the chip design business with a special focus on smartphones and tablets" No clue what exactly in smartphones they are planning to do. But if its something like App processors, its a bad move. Too much competition in high end(Qcomm,Nvidia,samsung) and in the low end (Mediatek & others). Hard to make any differentiation.
It would have much easier, if they simply bought out STE before it died.
I wonder if 100 engineers is enough to do the entire task of development. Will they license an ARM core and just implement it in silicon or will they need to add to the core? It seems like such a large task and a small team.
If they plan to simply buy ARM+imagination +peripherals core, stick together, fab it. Then 100 EE team should be sufficient I guess. Making a differentiation through architectural re-design etc is another story.
Why do you link to Strategy Analytics data in your article? Do you trust Strategy Analytics? I think they mostly come up with totally bad data. I think Apple has a much smaller market share than 11% of the smartphone market in China.
Someone needs to spend the time and effort noting all the data that all these different analysts regularly spread among Techmeme blogs, and then later show clearly how wrong each analyst has proven to be. I'm sure you can easily find at least a dozen times where Strategy Analytics can be proven to be completely wrong just in the last 4 months.
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