ADI swears by Chinese market
Despite current supply shortages bedeviling the semiconductor industry in both China and the rest of the world, Analog Devices Inc, a US semiconductor company, said it is eyeing the Chinese market for big growth opportunities, following double-digit growth in the country in the fiscal year of 2021, and given the pent-up demand.
Known as ADI, the company recognizes that China is its fastest-growing market that accounts for more than 20 percent of its total sales, comparable to the European market, said Zhao Yimiao, general manager of ADI China Technology Groups.
"China has always been a very important market for ADI. The massive efforts to contain the COVID-19 pandemic have helped economic activities to recover quickly in China. And local customers are also moving fast to restore production," Zhao said.
In August, China's State Administration for Market Regulation gave antitrust clearance for ADI's $21 billion acquisition of Maxim Integrated Products Inc, another US semiconductor company.
Any semiconductor company that has significant exposure to the Chinese market, the world's biggest, is required to get Chinese regulatory approval when it merges with, or acquires, another company anywhere in the world. This regulation is in line with similar ones in the United States, the European Union and other markets.
Maxim is strong in chips used in the automotive and data center markets, while ADI's chip products serve broad industrial, communications and healthcare needs.
The deal could help ADI better meet the Chinese market's growing demand for a wide range of chips, said Fu Liang, an independent tech analyst.
ADI was the world's second-largest supplier of analog integrated circuits in 2020 with a market share of 9 percent, trailing only Texas Instruments, a US semiconductor company, according to data from IC Insights, the market research company.
According to ADI, as China deepens its efforts to promote industrial upgrade and digital transformation, the Chinese market plays an important role in the world. The implementation of national strategies like "new infrastructure" projects has brought unprecedented development opportunities for the industry.
Zhao said ADI China currently has five independent product lines covering multiple application fields like automotive, communication, industrial, healthcare and consumer electronics.
"On the one hand, we need to quickly respond to the needs of the Chinese market, where everything is developing very fast. On the other, we are based on ADI's global research and development system, which can help bring innovative products to the local market," Zhao said.
Meanwhile, the company is striving to boost product supplies to China. "In addition to using the international semiconductor supply chain system, we are also actively working with local supply chain partners in the hope of establishing a more complete local supply system, covering manufacturing, packaging and testing, to offer more substantial support to Chinese customers," Zhao said.
ADI said earlier it also plans to set up a logistics and warehousing center in China, as part of its broader efforts to double down on its investment plans for the market.