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.
Great story, Junko!
Well told, and I loved the background and regional history part of the story.
The past two decades have moved the Chinese fabless companies into mainstream markets for volume in Mobile. And the story of this company's renewal shows the importance of location and restructuring, building on a good foundation.
Zhuhai really does seem to be located historically close enough to Hong Kong that they captured engineers from Korea, and Taiwan to supplement the local talent. The Riviera of China? That idea will stick. All they seem to need is cellular connectivity talent and perhaps IP. Good luck to them in 2013.
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