Specifically, there are two meanings: one is to transfer from the origin of technology, from areas with relatively advanced technology to areas with backward technology. Changes in the distribution market When it comes to changes in the distribution market, in Pang Jun’s view, th

Category：hotcomm

2025-03-18

At the second day of the 2018 Global Double Summit hosted by ASPENCORE, the global distribution and supply chain leader summit, Pang Jun, deputy general manager of local technology distributor Runxin Technology, gave a keynote speech on "IC Technology Transfer and Local Design Ecology". He believes that the essence of distributors should be the technology trading industry, that is, assisting in technology transfer. Specifically, there are two meanings: one is to transfer from the origin of technology, from areas with relatively advanced technology to areas with backward technology; the other is to transfer from basic IC design technology to IC application technology.

Figure 1: Pang Jun, deputy general manager of Runxin Technology.

Changes in the distribution market

Speaking of changes in the distribution market, in Pang Jun's view, there are three main changes: one is the changing environment; the second is the division of labor in design and manufacturing; and the third is the thinning profits.

In his speech, Pang Jun mentioned that when he entered the industry, there were about 3,000 IC design and manufacturing companies, and to this day, only 500 are left. Why are such a large merger and acquisition? He believes that the real reason is that industrial capital is worried that the annual design investment will not be recovered. Since the consortium behind it is one, after the two companies merge, they can withdraw some cash, reducing R&D and design investment to a certain extent.

"In 2017, these 500 IC design and manufacturing companies sold US$390 billion, invested approximately US$59 billion in R&D, and covered 1 million electronic products manufacturers, which is still at this level. This means that the environment in the distribution market is changing," said Pang Jun.

In terms of design and manufacturing division of labor, Pang Jun believes that design and manufacturing division of labor have a long history, not only the division of labor in the industry, but also two majors. He explained, "For example, in the clothing industry, clothing design and clothing manufacturing are completely two majors. Clothing manufacturing people only care about whether a piece of cloth is pulled six pairs of pants or seven pairs of pants, and how much does a button cost. The fashion design industry will not think about these. Semiconductor design and manufacturing are two majors. It is not only a division of labor, but two majors."

Then why is the profit thinner now? In his speech, Pang Jun said, "There is a distribution of the 28 principle in economics. For example, Apple only produces 20% of mobile phones every year, but accounts for 80% of the profits. This is the natural distribution of economic resources and funds. If it has a lot of room for improvement, like when technology just entered China in early 2000, the entire industry has very high profits. Now Runxin Technology is my original supplier. At that time, I was at UT Starkon, and I worked there for 12 years. At that time, I was my supplier. The profit margin for terminal electronic products was 50%, sometimes doubled. Because the profits of the entire industry are very rich."

But now the entire distribution industry feels that the profits have become thinner, and at the same time, I feel that the upstream and downstream days have become sad. "I remember 10 years ago, a chip was sold for US$19 and a router was US$26. Basically, this chip was this. Today, it costs about 85 cents. A dual-screen 2×2 chip is used on the Internet of Things, which is about 85 cents. It is still working, which means that there is still profit. But the profit is not as high as before. The same is true for , Qualcomm . We are also a distributor of Qualcomm. Qualcomm suffered losses in the third quarter financial report. Ten years ago, Qualcomm had to take first class cabin when flying in China, and stayed in a five-star hotel and also had to live in a business suite. But now it is not possible. Even if you are on a business trip in the United States, the vice president of China can only take economy class." Pang Jun said. This means that not only the profits of the distributor industry have become thinner, but also the profits of the original suppliers have become thinner.

Figure 2: Customer changes in the distribution market over the past decade.

and customers are also changing. Pang Jun said that in 2008, this distribution industry was divided into Tier-1, Tier-2 and long-tail markets. But Tier-2's customer share has been decreasing for the past decade. He took Qualcomm's statistics last year as an example, "Last Qualcomm counted that there were 4 Tier-2 companies and 3 Tier-1 companies. This distribution has an impact on distributors. Tier-1 customers are generally directly responsible for the original chip manufacturer, and Tier-2 customers are a large number of customers of the main distributors. If this level disappears, it will actually have an impact on our business. We also analyze the changes in this market.There are also many companies that do long-tail markets, but companies in long-tail markets usually have relatively weak technical capabilities. "

Pang Jun admitted that the previous changes are somewhat negative for distributors, but there is no need to be pessimistic. He said, "At present, 80% of the mobile phone industry chain in the information industry is deposited in Greater China, and 50% of the automobile industry chain is deposited in Greater China. From a historical perspective, the automobile supply chain emerged in Europe a hundred years ago, and now good automobile sensor manufacturers are basically in Europe; although the Japanese electronics industry has declined significantly in the past 20 years, this is mainly because cameras, DVDs, TVs and other products have been eroded by smartphones, the best image sensors, display screens and basic material manufacturers are basically in Japan. There is also Taiwan’s PC industry for many years, but it has not been removed yet. All these fully demonstrate that the design ecology of the large industrial chain is not easily removed. "

distributors also look at market opportunities," the opportunity we see is that some good sensors of the Internet of Things are now used on mobile phones, and then ported to industries other than mobile phones. OEMs in China, such as smart POS machines, look more like mobile phones, are basically in China's top five in the world. Of course, this is also related to the leadership of large manufacturers. If you find the application of large industrial chains, you can develop well in the market. "Pang Jun pointed out.

Internet of Things is a good opportunity

Runxin Technology is a distributor company established in Shanghai in 2000. The products distributed are relatively specialized, focusing on wireless connections and sensors. Pang Jun introduced that Runxin Technology's current idea is to transplant some algorithms running on the original mobile phone processor into an embedded system. He also introduced their newly launched module product---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- , self-organized networking and routing, as well as ultra-low power consumption and other features. It can be widely used in commercial air conditioners, sweeping robots, warehouses, and intelligent driving systems.

Pang Jun believes that the Internet of Things is a good opportunity for practitioners in the electronics industry. Runxin Technology has invested in the Internet of Things since 2013, and this year is the fifth year. He admitted that there was basically no output in the previous years,

"I remember in 2014, the R&D team invested more than 150 projects a year, and in the end, less than 10 were mass-produced. At that time, the market was very impetuous, with mass innovation, crowd creation spaces, and BATs everywhere. There were many projects, but not many of them were mass-produced in the end. However, the situation has improved in recent years. For example, we only had 80 projects last year and mass-produced about 10. There are only 26 projects this year, and 5 are mass-produced. In fact, when the market is not good, it is closer to the real situation, and there will not be so many slogan-style products. Like DJI, we provide it with chips of US$30 million every year, and we do its image transmission and RF point-to-point chips. Midea uses more than 15 million WiFi chips every year, used in air conditioners, refrigerators, washing machines, and kitchen appliances. "

Figure 3: Local industry and design ecology.

In addition, Pang Jun also talked about local industry and design ecology. He said that the above design ecology diagram looks complicated, but if we want to cooperate in the fragmented market, there will be so many partners to do projects.

He believes that the domestic design ecology is poor, it is not easy to receive orders, and it is not easy to make money. There are two main reasons: one is that the professional level of oneself is insufficient, whether it is individual, school education, enterprise operation model, or capital, there are insufficient professional level; but it is more eager for quick success and instant benefits, which are performance-oriented, and the company needs to ensure profitability. However, the cycle of R&D from input to output is relatively long.

Finally, Pang Jun emphasized that Runxin Technology has always chosen to make professional investments. The scale of the company does not have to be large, but it must increase the professionalism of the company.

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