China must go beyond Big Fund

An article written by Junko Yoshida for EETIMES – In addition to the Big Fund, the Chinese government might also want to pursue vertical integration models to fast-track self-sufficiency in the electronics industry.

We get an earful, all the time, about China’s yen to have its own semiconductor industry and supply chain, independent of the United States. But is China on the right track to do it?

When I visited China this month, I popped the question to domestic and foreign electronics industry executives and a few analysts.

While China’s Big Fund is widely believed to be the right vehicle to deliver the goods, Jean-Christophe Eloy, the president and CEO of Yole Développement, is not so sure.

When I met him in Shenzhen at the Global CEO Summit, I asked him: If you were working for the Chinese government, what advice do you have for China’s electronics industry? While the Big Fund is currently China’s ticket to ride, Eloy said the government might also want to pursue vertical integration models to fast-track self-sufficiency in the electronics industry.

“Take a look at BYD or Huawei,” noted Eloy. Vertical integration is “a model that is very important to China at the moment,” he said, “because it is a good way to make very short connections between the need of the market and supply chain without too many layers in between.” Full discussion

Source: http://www.eetimes.com

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