Push into chip sector speeding up

Chinese home appliance manufacturers have accelerated their push into the chip sector, as part of a broader drive to ensure the safety and stability of supply chains and reduce their dependence on foreign chip companies, industry experts said.

Home appliance giant Midea Group has entered the chip sector by establishing the subsidiary Shanghai Meiren Semiconductor Co Ltd, which is engaged in the research and development, design and sales of micro control unit chips used for electrical control systems and intelligent power module chips in advanced power switch devices that are designed to increase system reliability and efficiency.

The company started mass production of micro control unit chips in 2021, and its shipments are expected to reach 10 million units this year. It also plans to expand its presence in the fields of industrial control, the internet of things and vehicle-mounted chips.

In addition, Midea has formed a strategic partnership with artificial intelligence chip company Cambricon Technologies Corp to carry out cooperation in intelligent home appliance products and intelligent robots.

Gree Electric Appliances has invested heavily in the research and development of chips. The revenue of its wholly owned subsidiary Zhuhai Edgeless Integrated Circuit Co Ltd increased by more than 50 percent year-on-year in 2021, with its chip shipments exceeding 70 million units.

The company's micro control unit chips have been widely applied in the consumer electronics, wearable devices, smart home appliances and medical equipment sectors. The company, which is based in Zhuhai, Guangdong province, expects its chip shipments to reach 135 million by the end of this year.

"Currently, the market share of domestic home appliance chips is relatively low, and more than 90 percent of such chips rely on imports," said Chen Hui, general manager of AVC Revo, a unit of Beijing-based market consultancy firm AVC.

"Against the backdrop of an increasingly complicated international situation, Chinese household appliance makers have to step up their efforts to bolster independent research and development and production of vital electronic components."

"The chip industry requires a great deal of investment and the introduction of state-of-the-art technologies, which sets a high threshold for home appliance enterprises aspiring to jump onto the chip bandwagon," Chen said.

Domestic home appliance enterprises also hope to diversify their product portfolios and seek new sources of revenue by expanding their reach into the chip sector, Chen said, adding that domestic companies should increase their R&D input and strengthen independent innovation to establish a relatively complete semiconductor industry chain system.

Statistics from AVC showed that the sales revenue of China's home appliances sector reached 760.3 billion yuan ($111.7 billion) in 2021, up 3.6 percent year-on-year. However, this figure represented a drop of 7.4 percent compared with 2019.

In addition, Chinese television manufacturers have independently engaged in the R&D of 8K image quality processing chips.

As 8K (8,000-pixel resolution) decoding chips should be combined with AI technology, Chinese tech giant TCL Technology Group Corp has strategically invested in AI chip enterprises such as SenseTime and Cambricon.

Chinese home appliance company Hisense Group has launched a self-developed image processing chip that supports 8K TVs. Wang Wei, vice-president of home appliance maker Hisense Visual Technology Co Ltd, a subsidiary of Hisense Group, said in an earlier interview that it will launch more AI-powered chips over the next few years, and the usage rate of its self-developed image chips will exceed 90 percent.

Li Hongdao, vice-president of Chinese TV manufacturer Konka Group Co Ltd, said its proportion of domestically made TV chips is rising year by year and the company's TVs have started to use its own memory products.