By Kathryn Chiu, The China Post
TAIPEI, Taiwan — The Wintel camp’s favoritism of component suppliers on the mainland is putting the local high-tech industry between hammer and anvil, says Taiwan’s Market Intelligence & Consulting Institute (MIC, 資策會產業情報研究所). Wintel refers to the combination of the Windows operating system running on Intel microprocessors. The term is often used to indicate the close alliance between Intel and Microsoft. MIC analyst Yang Cheng-yu (楊正瑀) recently said in a industry research report that the government should be much more vigilant of the Wintel camp’s patronage of mainland-based suppliers of flat panels and smartphones. MIC is a division of the Taipei-based Institute for Information Industry (III, 財團法人資訊工業策進會). Yang remarked that amid the weakening demand PCs and the lowering of prices of mobile devices including smartphones and tablets is managing to simulate the end-market growth in China while raising the importance of local suppliers. For example, Yang said, mainland suppliers have already provided up to 80 percent of components of an entry-level tablet sold in the Chinese market. The focus is mainly on the market segment of tablets priced between US$39 to US$59. To gain more market share in the world’s second largest economy, the Wintel camp has charted a new course by supporting the development of the “Red-cap Supply Chain,” a newly minted term of Yang’s, that indicates those Chinese developers, vendors and component manufacturers favored by the Wintel camp through refunds in the form of subsidies or lower-than-average, even free, licensing. Mainland Suppliers
Pose Real Threat Standing on the shoulders of giants, in this case the mainland market and Wintel, those red-cap suppliers are becoming a force to be reckoned with, said Yang. Chinese companies wearing red caps include integrated chip designers of Fuzhou Rockchip Electronics Co. (瑞芯微), Allwinner Technology (全志), Amlogic Inc. (晶晨), Shanghai InfoTM Micro-Electronics Co. (盈方微), flat panel and touch panel makers such as Tianma Micro-electronics Co. (天馬微), Kunshan InfoVision Optoelectronics (龍騰), Century Display Co. (深超), BOE Co. (京東方), Shenzhen O-Film Tech. (歐菲光), smartphone camera module makers such as Sunny Optical Technology Co. (舜宇), Truly Opto.(信利), Wuxi A-kerr Tech. (凱爾), Kunshan Q Tech. (丘鈦), as well as battery makers such as Desay Corp. (德賽), BYD Co.(比亞迪), and Shenzhen BAK Battery Co. (比克) Intel Confirms Investments At the same time, Intel last weekend confirmed that it will invest in mainland cellphone chip designer Spreadtrum Communications Inc. (展訊通訊), taking a 20-percent stake for 1.5 billion renminbi. Spreadtrum is making a comeback to the Wideband Code Division Multiple Access (WCDMA) market and aims to enter mass production for long-term evolution (LTE) chips in the first quarter of 2015, which could further impact the industry’s overall gross margins, given Spreadtrum’s well-known low-price approach, Yang said.