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.
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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