ZHUHAI, China – Seeing Actions Semiconductors’ headquarters in Zhuhai might come as a shock to anyone who has already written off Actions as a shrinking chip company in the diminishing MP3 player market.
By Silicon Valley standards, Actions’ campus and the main building designed to house its 614 employees are massive. Actions today designs chips for mobile audio (automotive, boom box and MP3), mobile video and mobile Internet device (tablet), with a clear focus on portable consumer electronics.
Actions Semiconductor’s 10-year history, however, is a microcosm of the failures among first-generation China fabless companies. But under new management, Actions has also proven its resilience, as it pursues opportunities in new markets such as media tablets.
Actions’ ability to compete in an already crowded apps processor market remains to be seen. But it hopes to take advantage of its business focus on a vast network of whitebox vendors--many also located in the Pearl River Delta near Actions’ HQ.
Actions’ stated strategy is to go after the so-called “non-Apple” market.
Whether it’s MP3 players, boom boxes, personal video/game devices or tablets, the company claims that the available market for such non-Apple products is nothing to sneer at. The company estimates the non-Apple product market compatible with Actions chips reached $660 million last year. That total in 2013 is expected to jump to $920 million, the company estimates.
Actions, traditionally known as an MP3 player chip vendor, took on China’s rapidly growing tablet market in earnest only last year--several quarters after China’s two leading apps processor vendors--Rockchip and Allwinner--established their dominance.
Still, Zhenyu Zhou, Actions' CEO, remains optimistic. He believes that in today’s booming tablet market, competition remains volatile. Actions’ goal is to take a 10 to 20 percent share in media tablet apps processors, said Zhou in a recent interview here with EE Times.
Actions Semiconductor CEO Zhenyu Zhou at the company's lobby
Among challenges the company faces is the hard reality of competitive pricing and lowering margins. Actions also must decide on potentially big investments in connectivity technologies--including the cellular basebands that the company currently lacks.
Where Actions came from
To understand Actions is to understand the turbulent history of the electronics industry in China. Actions dates back to the 1990’s, when a group of engineers from Taiwan, Hong Kong and Korea came to Zhuhai, organized a local talent pool and organized one of the first IC design teams in China.
i been to Zhuhai, I think it's just a less crowded and more touristy version of Shenzhen. Don't know about "Riviera of China" though, that's more Hainan I think. (Though Hainan is more often called the Hawaii of China)
Anyways, there is a travelogue of Zhuhai for people going to Honeymoon there, some picture are in the end.
Actually government investment is in a completely different sector, namely Fab and precision analog and pure processors. Which I always viewed as supporting of the military industrial complex as these things are blocked by sanctions imposed on China after 1989 and worry about backdoors in foreign made products.
Fabless houses like Action, Allwinner, Spreadtrum, Rockchip etc, are really dark horses with little government support. The only benefits they get is tax breaks that was applied across the technology sector and infrastructure that was built to support this sector.
If you have time, there is the long story of the Chinese semiconductor industry, from first IC in 1964 to 2008.
Thanks for the story between actions and allwinner technology.
It let's me know some information behind chinese semiconductor industry.
Actions is a famous company in china, you can read a lot information in some technology websites in china.
I want to find a job from allwinner at the of last year.
I visited the allwinner technology HQs in zhuhai last year.
It take about one hour from guangzhou south station to zhuhai by CRH and bus.
There is no message until now,I should be not pass the interveiw.
I don't know there is some relationship between actions and allwinner technology.
Chinese's fabless company are struggling very hard to make a life in consumer electronics.
China seems to take over everything except semiconductor business. Top Chinese Official and business leaders already realized importance of semiconductor business 10 years ago and invest lots of Money into it. But end result seems less satisfying. What is difference between Semiconductor Business and other business? Here are a few of my opinions:
1. Low cost could not offset low performance. Unless other industry, 5 years, sometimes 2 years old, semiconductor technology is already antique. People might still pay you 80% price toy built using 10 years old technology. 5 years old semiconductor product? I'm not sure people will use it even free;
2. Semiconductor business require long term strategic investment. With easy and fast money from real estate and others, no many Companies in China are willing to invest on it;
3. In general, Chinese are extremely good followers but not technology leaders. Unfortunately, this is leaders take all business;
Thanks for your kind words.
I wouldn't have been able to find out the 'Riviera of China' and the actual environment Actions in, unless I visited there. I was truly surprised when I saw this huge HQ there!
Well put. I hear more and more companies are instituting a discipline: if you aren't number one or two in the market, get out.
I wonder how long it takes for the tablet apps processor maker to get settled.
"For a chip company to survive in the consumer market, Zhou observed, “You need to be number one. Only the top player makes a lot of money. The number two can make some money, but the number three will find a hard time” surviving."
It should be noted that this is true in pretty much *any* industry. when a new market is created, lots of folks jump in. Gradually, consolidation occurs, and you are left with a couple of dominant players and perhaps some smaller niche firms serving areas the big boys don't target.
The only difference with consumer electronics is the speed at which it occurs. What may take decades in other industries can happen in years in consumer electronics, and anyone in the consumer electronics space must be aware of that and plan accordingly.
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