[The Korea Industry Post, Oct. 16. 2015(=Seoul)]

Korea’s parts and materials industry, which had faced hardships because of saturation of smartphone•TV market and China’s fierce supply strength, rather seized opportunity as China’s set-making industry matured.

Also, the companies earned diverse customer company because not only Samsung Electronics•LG Electronics but also Huawei, ZTE, and rising dark horse Xiaomi tend to adopt products of Korea’s partner companies.

Semiconductor industry joining hands with Xiaomi

PMIC (power management integrated circuit) company Silicon Mitus was known to supply PMIC to smartwatch, which would be released in end of October. Even with the aggressive low-cost marketing of U.S.’s companies like TI, Fairchild, and Maxim Integrated, Silicon Mitus was chosen as reference partner. Even though the main business was PMIC for medium-large sized LCD and OLED, Silicon Mitus started to expand the field because of urgency to diversify its customer companies.

Xiaomi’s smartphone Redmi note 2 is installed with Samsung Electronics’ 13.0 megapixel CMOS image sensor (CIS) and Dongwoon Anatech’s auto-focus (AF) chip. Even though over-10.0 megapixel CIS was released by Samsung Electronics and Sony, but currently Sony is dominating the market. Until 2014, Samsung Electronics only sustained high market share in low profitable below-5.0 megapixel business. Since Xiaomi chose Samsung CIS, Samsung Electronics’ high megapixel now have bigger chance to be sold outside the captive market.

With Samsung CIS, Xiaomi applied Dongwoon anatech’s AF chip and Samsung SEM’s OIS. It is notable that all the core parts of camera module were not made in Japan but made in Korea.

Xiaomi is currently seeking for biometric authentication system and reviewing CrucialTec Co., which is supplying module for fingerprint verification to Huwei, as a strong candidate.

China fishing Korea’s technology

Samsung Display’s TG and module collaborating company Chemtronics faced with sales deficit on the first two quarter of this year. The company is expecting for turnover as Samsung Display’s supply increased to companies like Huawei in the latter half of the year. The supplies increased because Samsung reduced the supply prepared for mobile communications division to increase supplies to China.

China’s set-makers are bringing Korea’s parts industry to their business because China’s overall standards increased. Unlike the past when smartphone was assembled with Mediatek’s reference board and was sold in shanzai gray market, it became hard to find fake ones anymore in Shenzhen’s Hua qiang bei market. Chinese customers’ expectation increased.

Intensified competition in China’s smartphone industry also acted as another reason. There are more than over 30 companies that dreams 2nd Xiaomi in China’s domestic market meaning that it is hard to survive without differentiated function and technology.

Using Korea’s parts, which are rather free from patent issues than China’s parts, is more convenient to make global model smartphones.

Also higher chances of bargaining price adjustment of Korean companies than Japanese companies acted as advantage.

There are concerns of technology leakage. An industry official worried that “Like Korean industry actively used Japanese parts in the past, China is also earning ideas from Korean parts” adding “Soon China will catch-up with the technology and reverse the situation.” However, representative of company supplies products for Chinese company said “Missing the chance by concerning technology leakage is unconvincing,” commenting “rather aggressive product’s localization strategy to capture the market will be helpful for future R&D and sales expantion.”
 

by Jerry

onz@kipost.net

translated by Taegeun Kim

ktg1130@kipost.net