BEIJING – It’s hard to argue against the widely held notion that the weaknesses of China’s fabless companies lies in their inability to go beyond the Chinese market. Put more bluntly, Chinese companies are content with making cheaper products for the domestic market.
[Get a 10% discount on ARM TechCon 2012 conference passes by using promo code EDIT. Click here to learn about the show and register.] Yiming Zhu, CEO and president of fabless company GigaDevice, takes the argument to another level: The target market for Chinese fabless chip companies should extend beyond the 1.3 billion people in China and reach out to the 6 billion inhabitants of the the developing world.
Of the earth’s current population of more than 7 billion, Zhu points out, “one billion people in the developed countries have already had a chance to try or buy iPhones. There are six billion people in the pool who also want digital life, but can’t afford iPhones.”
If China’s fabless companies can play a role in filling the digital divide with low-cost products, more power to China. (Rockchip, China’s fabless apps processor vendor, for example, is supplying its CPU to 7-inch media tablets made in China. They are being purchased by Thai government for its “One Tablet Per Child” program.)
Zhu also stressed that noted that this strategy might actually buy time for China to buy time, hone its digital skills and catch up with the West. Pursuing a market of 6 billion poor consumers over the next decade “will give China time to grow,” he said.
The view may be a little too utopian.
Moreover, I don’t subscribe to the notion of China being Africa’s "new colonialists" cultivating a new geopolitical market.
