Homegrown Chinese mobile phone makers have seen a high-end chip supply shortage become a big obstacle on their expansion way.
Gu Wenjun, a senior analyst with iSuppli, said in an interview recently that China imported USD 192 billion worth integrated circuit (IC) chips in 2012, compared to USD 120 billion of crude oil. The shortage in high-end chip supply was much critical because homegrown Chinese mobile phone makers were always poor in the R&D.
A report released by the development and research center of the State Council, the Chinese cabinet, shows that China is still a net importer in terms of technology and intellectual property. Its dependence on core foreign technologies is very high and up to 80 percent of the chips used per year are imported ones.
Available data also shows that China produces 1.18 billion mobile phones, 350 million computers, and 130 million color TV sets per year currently, ranking No.1 in the world, each. However, it should pay huge patent fee for high-end chips adopted.
It seems to have become a trend for high-end mobile phone makers in the world to adopt chips by US-based Qualcomm and low- and medium-end ones to adopt those by Taiwan-based MediaTek. Qualcomm owns many patents and is the sole chip maker around the globe that supports software platforms of Apple, Google and Microsoft. While, MediaTek shoots to fame in a war among coppycat mobile phone makers in the Chinese mainland. And in the global IC design industry, Qualcomm ranked No.1 in the US market with sales of about USD 12.98 billion last year. MediaTek took the first place in Taiwan with sales of about USD 3.4 billion. Shenzhen-based Hisilicon Technologies ranked No.1 in the Chinese mainland with sales of CNY 7.45 billion, or about USD 1.19 billion.
Xu Guoxiang, chairman of a homegrown Chinese mobile phone maker, disclosed that it focused on the manufacture and sale of CDMA terminals and in the field, Qualcomm was a leader in terms of chips. The US firm saw its platform be a multi-mode and -band one and based on the platform, there was no need for mobile phone makers to develop different products for different telecom operators. Notably, cooperating with it indicated that a mobile phone maker had initially entered the high-end mobile phone sector. Under such an environment, homegrown Chinese mobile phone makers cast eye on chips by it in succession. However, it always chose to well satisfy the demand of smartphone giants including Apple and Samsung Electronics first.
