Zhuhai offers a good environment, said David Lee, chairman of Actions’
board of directors. Zhuhai, featuring a long palm-lined coastal road and a network of
hot springs, is known as the Riviera of China. “It’s easy to gain
access to local talent, and it’s easy to travel,” Lee said. He jokingly added,
“Zhuhai, close to Macao, was known as the only place where you could get
Hong Kong TV signals back in the ‘90’s.”
Before it became
Actions in 2001, the company was funded by private money, with its
business focused on toys, melody chips and gaming ICs. But the team’s
real claim to fame was its expertise in mixed signals, such as power
management units. It still is, explained Zhou. “We have the best mixed
signal team, and most of our IPs were developed by ourselves,” he said.
2003, Actions went after the booming MP3 player market, competing
head-on with fellow digital audio chip companies like PortalPlayer and
SigmaTel. While PortalPlayer built its business around Apple’s iPod
design wins, Actions went after the non-Apple market, by leveraging its
location--China--which offers a growing domestic consumer market and a
“factory of the world” primed to pump out and distribute digital music
players in massive volume at low cost for the rest of the world.
those days, more than 100 companies–although many of them very small–were producing MP3 players in Zhuhai, said Lee, and 80 to 90 percent of
the customers’ customers were in Shenzhen, only an hour-and-half ferry
ride from Zhuhai. Channels for MP3 players were growing quickly and
Actions was in the thick of the action.
By November, 2005,
Actions went public in the United States, with its stocks traded on the
Nasdaq exchange. At this juncture, Actions began to learn how brutal the
consumer electronics market can be. 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.
dominated the non-Apple MP3 player market, but it quickly became a
victim of its own success. Actions became the poster child of “one-trick
pony” China fabless companies.
Meanwhile, Actions faced an
eruption of internal fighting over the shares of money earned after the
company’s IPO. By 2007, 70 percent of Actions’ senior engineers left the
company. “That set Actions back at least for several years,” said Lee.
Worse, those who left Actions formed a competing company called
Allwinner in Actions’ backyard. Allwinner, starting afresh, took
everything they learned at Actions with them, making improvements and
setting its sight on the new media tablets market.
insists that transitioning from supplying MP3 player chips to offering
portable video players featuring screens (and eventually media tablets)
wasn’t such a huge hurdle. The company even had plans for this by the
time of its IPO, according to Lee. But Actions didn’t actually act on
its plan until Zhou was appointed CEO in late 2011.
part of Actions’ acquisition in 2010 of Mavrix Technology, a mobile TV
SoC startup, which Zhou founded. When he joined Actions, Zhou became
senior vice president, responsible for the company’s tablet R&D team
Lee noted that by early 2011, Actions’ board was
fed up with the company’s “old fashioned, slow changing style” and
decided on a fundamental change at the top. The board found Zhou an
ideal CEO, valuing his wealth of experience in various executive
positions in U.S. companies. Zhou was an executive at ESS Technology
before founding Mavrix. He was also a founder and CEO of NetRidium
(which was acquired by ESS), and held a number of senior level
engineering positions at Conexant/Rockwell.
Actions' HQ in Zhuhai