Union Semi is one of China's most established and successful fabless chip firms. So it's not surprising to see them taking this next step. But what about the dozens/hundreds of smaller fabless chip firms in China? How will they react to the lull in the domestic market?
Union knew very well they cannot compete the high end ones, so they choose the fancy way in terms of features and low price to attract western market. This is all about the same tactic of Makers of Chinese products, much of the time they are not emphasize reliabilities test in their manufacturing process. If they are quality products, their own Chinese should buying from them more and more. Right ?
I am sorry to answer that your are completely wrong.
We Chinese only want to earn money as quickly as possible. Seldom company has the patience to wait for several years to improve their products' qulity.
Therefor, many companies from China only sell cheap procuts comparing with U.S.A or Europe or Japan' to the area in which common consumers pay much attention on price.
In my opinion, China's fabless companies need to take a more global perspective, pursue broad markets and embrace innovation as well as efficiency if they are ever going to get on the road to being truly successful. Union is among the few on this road.