"In 2023, the industry may experience a process from the bottom of the cycle to a shift in demand. The mentality and consumption desire of the industry, as well as a series of economic policies at the national level, will be implemented and produce results," Jiang Tao, deputy general manager of Ruifan Microelectronics, said. At the same time, he also pointed out that as customers’ destocking is coming to an end, customers will become more dependent on a stable and reliable supply chain, and the value of distributors will become even more important.
According to OMIDA estimates, China's MCU market size will grow at a compound annual growth rate of 10% from 2020 to 2025. In 2021 alone, China's overall MCU market size will exceed US$7 billion. However, more than 75% of the supply is monopolized by overseas manufacturers, and domestic production accounts for less than 15%. However, in recent years, driven by multiple favorable factors such as policies, industry chain , and talent cultivation, the development of China's local MCU industry has also achieved certain achievements.
"China's local brands of MCU products cover a wide range of products, from low-end 8-bit and M0 to high-end ARM9. They are also involved in a wide range of applications and have high market acceptance." Jiang Tao, deputy general manager of Ruifan Microelectronics (RUIFAN), said in an interview with an analyst from "International Electronic Business News" during the 2022 International Integrated Circuit Exhibition and Seminar (IIC Shenzhen).
Jiang Tao, deputy general manager of Ruifan Microelectronics
Following localization upgrades and forging strength
Jiang Tao pointed out that Ruifan Microelectronics represents multiple domestic MCU lines. Because their product design positioning is differentiated, they may only be able to benchmark against major international brands in some different or the same local applications. When the delivery time, peripheral applications, and MCU internal resources just meet customer requirements, there will be some advantages.
According to him, the sales of domestic MCU products currently represented by Ruifanwei account for more than 45% of the company's total MCU products. The annual output value of China's domestic semiconductors has reached 1 trillion yuan. Compared with the total industry value of 500 billion U.S. dollars, the overall localization rate of Chinese components has exceeded 30%. I believe that with the country's continued investment and the gathering of a large number of chip elites, the localization rate of chips will become higher and higher, and the sky will always have that touch of Chinese red.
From the perspective of MCU downstream application proportion, throughout the world, the automotive market is the field with the highest proportion of MCU product applications, with a market share of up to 35%. Comparing domestically, due to the differences between China's local economy and product structure and overseas, the domestic MCU downstream market is dominated by consumer electronics , while the local automotive MCU market share is only 16%.
In the field of automotive applications, vehicle-mounted MCU chips are mainly responsible for the calculation and processing of various information. They are used in the fields of body control, driving control, engine control, infotainment, automatic driving and assisted driving. They have the function of improving the power, safety and economy of the vehicle. Therefore, vehicle-mounted MCUs have always been regarded as representatives of high-end. According to
data, the global automotive MCU market size will be approximately US$8.7 billion in 2022, and is expected to reach US$12 billion in 2025, with a CAGR of 11.3%. In terms of market structure, with relatively comprehensive product coverage, the top three giants have a combined market share of over 70%, indicating a high degree of industry concentration. In recent years, some local Chinese manufacturers have begun to enter the field of mid- to low-end consumer-grade MCUs, and gradually extended to high-end automotive MCUs required for intelligence. Jiang Tao said: "The automotive industry application is a track that we at Ruifanwei attach great importance to, and it is also an industry with high requirements for reliability and technical safety."
It is understood that Ruifanwei has established an automotive electronics sales team, and the original manufacturers such as Nuvoton, which it represents, already have MCUs for automotive product lines. At present, Ruifanwei is beginning to actively deploy, starting from assisted driving applications such as body control and entertainment systems, and gradually accumulating experience with other signal chain devices, power devices, protection devices, etc., to enhance its supply support capabilities in the automotive field.
Distribution welcomes new opportunities
In addition to MCU products, Ruifan Micro is also actively developing operations in other categories such as communications and analog devices.
According to Jiang Tao, after the sales of Ruifanwei's communication devices exceeded 50 million last year, the promotion of Bluetooth and 5G modules is also accelerating. These products have certain highlights in POS, AIOT, communication small base stations and notebook computer applications.
In terms of analog device products, Ruifan Micro currently only cooperates with 3PEAK and has become one of its head agents.It is reported that the cooperation between the two parties is huge, and Ruifanwei also has high hopes for this product line.
In terms of storage products, Ruifanwei has invested a lot in the past year. At present, Ruifanwei's products have covered NOREMMCSSD memory modules, and have completed the span from consumer level to industry level, and its product lines have also increased to four.
In addition, as Ruifanwei successfully obtained the agency rights for domestically produced Zhaoxin CPUs, the Xinchuang PC industry may bring considerable growth to its business next year. In terms of power device products, although Ruifan Micro has been in business for a short time, with the company's continued investment in the fields of new energy, energy storage and automotive electronics, Jiang Tao firmly believes that the power device category business will fly as fast as MCU in the future.
has gone from operating international and local brand MCU products to defining the company as an "excellent technology distributor". On the surface, it seems that the company's role is changing. However, in fact, it has a deeper meaning for Ruifanwei. In this regard, Jiang Tao said that Ruifanwei has always insisted on delivering value in the distribution field.
In Ruifanwei's view, technological investment can bring about differentiated competition, create business opportunities for customers and original manufacturers, and enhance distributor value; from the perspective of business operations, regardless of trade or agency, the models are diverse, and the purpose is to make the company more professional and stronger; standing against the background of the wave of localization, for Ruifanwei's enterprises or teams, they are industry veterans with more than 20 years, and they also hope to contribute to the development of China's semiconductor career.
In addition, Jiang Tao also pointed out that after the explosive growth of the original factory in the past two years, some integrations and mergers and acquisitions will occur, which will also create new opportunities for distributors. Distributors that truly invest in Demand Creation, MASS MARKET, large customer resources, or have invested heavily in important industry tracks will win the favor of the original factory.
Digital initiatives ensure supply chain security
Current supply chain management capabilities are particularly important given the opportunity of changes in the distribution industry. A high-quality and efficient supply chain is the core for improving product quality, upgrading product standards, reducing costs and increasing efficiency. It is also the key to breaking through in a highly homogeneous competitive market, and it is also the core competitiveness of brand development. How does
help terminal customers resolve supply risks and reduce costs? This is Ruifanwei's goal to achieve continuous self-improvement and progress. To this end, Ruifanwei uses customer predictions to prepare spot inventory and original factory orders, and regularly REVIEW the BACKLOG in transit to increase customer dependence on it.
In terms of product design, Ruifan Micro focuses on track promotion to create star products, reduces the complexity of product raw materials, and makes centralized stocking.
considers the replaceability and versatility of domestic and foreign brands when recommending products. When there is a shortage of foreign brands, Ruifanwei's technical team can help customers make quick replacement selections.
In terms of processing of customers' sluggish inventory, Ruifanwei combines functions such as business opportunity push in the internal system to match inquiry data and match transactions , thereby comprehensively reducing supply chain risks and reducing customers' inventory holding costs.
In order to collect and feedback market information more efficiently, by building a database, component distributors can provide more accurate market information and make quick decisions for the upstream and downstream industries. As a person who understands the Chinese market, local component distributors have launched digital attempts and layouts. For example, Ruifan Micro Application's big data can quickly and accurately match market spot information and customers' spot needs, significantly reducing customers' delay costs. It can also help customers find solution providers, develop ecological chains, and shorten the time for developing new products and .
In addition, Ruifanwei launched its own quotation inquiry system this year, and combined with the professional technical background of its agent's product line, it solved the supply pain points of customers in the short term, and at the same time helped customers with domestic substitution, continued to help customers reduce costs and increase efficiency in the long term, and better ensure the security of the supply chain.
Conclusion:
As the semiconductor industry gradually enters the downward callback stage in the second half of 2022, semiconductor sales and demand growth slow down significantly; wafer manufacturers in the industry that are chasing growth and expansion will significantly reduce their capital expenditures. Under the influence of a new round of sanctions, it is predicted that the overall capital expenditures of the industry in 2023 may not be optimistic.
However, even under this background, as a local professional hybrid electronic components distributor in China, Ruifanwei's business goals are still very clear - to focus on its own product line resources, become bigger, stronger and more specialized, increase investment in new energy, industry, information and innovation, medical and automotive industries, and strive to become a leading company in the local IC distribution industry.
Editor: Zengde.Xia
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