Jiangxi's electronic information industry surpassed one trillion yuan in output value long ago, yet more than seventy percent of that output remains concentrated in assembly and contract manufacturing.
As chip prices have broadly risen this year, fuller order books have translated into thinner profits.
The old logic of trading scale for growth is being pushed into a corner by round after round of raw material price increases.
Can Jiangxi successfully break through against the backdrop of widespread chip price hikes? Can it complete the turn from earning processing fees to earning technology money?
The company located in Ganzhou, Jiangxi, is a contract manufacturer of precision electronic components and consumer electronic products.
Since the start of this year, international memory chip prices have continued to climb, with memory chips nearly doubling their share of overall material costs, placing sustained pressure on many downstream assembly contractors in Jiangxi.
Xiao Lei, general manager of Ruide Electronics (Xinfeng) Co., Ltd. in Xinfeng County, Ganzhou City, said procurement costs and spot costs are rising in tandem, up more than twenty percent compared with last year, and profits are being severely squeezed.
In addition, supplier delivery cycles have lengthened; what used to take roughly three to four months now cannot be delivered even in five months.
Faced with this severe situation, government departments conducted in-depth surveys of multiple electronic information contract manufacturers to assess cost pressures and supply chain bottlenecks.
Based on those findings, the industry and information technology authorities have pushed enterprises to broaden diversified supply channels and carry out strategic stockpiling to buffer the impact of price volatility on gross margins, while guiding enterprises to accelerate their extension into high value-added new tracks such as AI smart terminals and intelligent robots.
Such new track arrangements have already seen considerable practice in the Nanchang High-Tech Zone.
In August and September this year, embodied intelligent robot projects by companies such as Longcheer Technology and Huaqin Technology were signed successively in Nanchang.
On the production line of this factory, eight embodied robots, deeply involved in joint research, development and design by the enterprise, are screwing in screws.
The application of humanoid robots in production scenarios, gradually extending to the manufacture of robot bodies and core components, has become the starting point for contract manufacturers to leap into the embodied intelligence track, and is also a miniature portrait of contract manufacturers exploring upgrade and transformation.
Yang Chun, deputy general manager of the robotics business unit at Longcheer Group, said the company wants to do more ODM original design manufacturing participation in the embodied field, whether from the perspective of robot bodies or key modules, it wants to do more work.
During the survey, reporters also found that although Jiangxi ranks first nationwide in LED chip production capacity, the industry has long suffered from a structural contradiction of a big head and thin legs, with companies mostly concentrated in upstream chips and midstream packaging, while the downstream display application segment lacks leading enterprises to drive it forward, and the match between technology and industry is not high, directly leading to the awkward situation of large scale but thin profits.
Targeting this pain point, Jiangxi's industry and information technology authorities pursued precise investment promotion under the approach of filling whatever is missing, successfully bringing in a leading enterprise in the downstream display sector, Zhaochi Jingxian, to push the LED industry chain toward higher value-added segments.
Du Rongqiang, deputy director of the Investment Promotion Bureau of Nanchang High-Tech Zone in Jiangxi Province, said that in the past local LED chips were mainly sold externally as intermediate products, and prices were controlled by others.
Now that leading enterprises have come in, local LED chips have a stable outlet.
At the same time, local chip companies and terminal manufacturers are being pushed to jointly build laboratories, so that research and development follows the market and technology revolves around applications, and the passive situation of having capacity but no market is gradually improving.
From January to September this year, the value added of high-tech manufacturing above designated size in Jiangxi Province grew 9.5 percent year on year, 0.3 percentage points faster than in the first half, with the electronic information industry becoming the sector contributing the most to Jiangxi's industrial growth.
At present, Jiangxi is focusing on building three trillion-yuan-level industries in electronic information, non-ferrous metals, and equipment manufacturing, and by the end of the 15th Five-Year Plan period, the province aims to reach 1.6 trillion yuan in electronic information industry scale.
Yu Guojian, director of the Electronic Information Division of the Jiangxi Provincial Department of Industry and Information Technology, said the focus will be on laying out a batch of major projects in fields such as next-generation smart terminals and new displays, and promoting collaborative innovation across the upstream and downstream of the electronic information industry chain.
A collaborative research mechanism of chain-leading enterprises plus universities and institutes plus industrial funds will be established, and a batch of key technology open competition projects will be carried out on a rolling basis every year, promoting the local transformation of scientific and technological achievements and truly turning technological advantages into product advantages and market competitive advantages.
Comments