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OFC2024: About De-Chinaization and its Countermeasures

2024-04-22    Carol

The biggest feature of this year's OFC is definitely "de-Chinaization", and everyone has their own strategies and strengths.

First of all, this year there is no particularly distinctive exhibition area in mainland China, although there are still some Chinese companies, but relatively concentrated.

Secondly, the angle of the booth, a little more direct with the name of the Southeast Asian company exhibitors, or participate in the name of foreign partners. There is no such convenience to hide, such as a leading domestic companies directly hide to the last row. In the booth, invite foreigners to see the booth is also more and more.

This is the first time that such a situation has appeared in the history of OFC in these recent years.


More than 20 years ago, when I first attended OFC, the number of manufacturers from mainland China was still in the single digits, but now it is already in the triple digits, which is a big change, and its direct impact is the impact on this industry. Nothing is more intuitive than the impact on Taiwanese manufacturers of the same language and race. When participating in the OFC Taiwan businessmen in both quantity and quality than the mainland, today the situation is diametrically opposed.


Standing in the position of non-Chinese manufacturers to see, a variety of preventive and even restrict the introduction of competitive measures from the Chinese counterparts can be understood. Standing in the Chinese manufacturers' point of view, we should also reflect on what we should do next? I think this is also the bosses are generally concerned about the issue.


Yellen came to China to say that China's overcapacity. No matter how the Chinese government argues, I think at least in our industry this is an indisputable fact. In OFC a passive boss told me, he gave foreign quotes, turn a corner another domestic counterparts to pull down the price of more than ten points. If it were not for overcapacity, there would not be such price competition. Of course, there may be some popular products there is not enough capacity, but that is only a temporary phenomenon, and the price is also generally in a sharp decline.


A domestic boss asked me if it was worthwhile for my peers to pull out all the stops to try to curry favor with Western customers, and if there was a better way. Even if we meet the requirements of the U.S. government, but will not end up being export restrictions, "de-Chinaization" in the end to what extent? What is the fundamental solution?


The first thing to say is that behind this predicament is that we do not have a core advantage in the industrial chain. Downstream customers such as NVIDIA determines the demand, upstream chip suppliers such as Broadcom, Marvell determines the supply chain. Even our most headline companies are still advanced packaging. Therefore, the fundamental way to solve the problem is to develop the so-called "new quality of productivity", transformation and upgrading, but this is a problem that is easy to know and difficult to implement.


In fact, we might as well look at the performance of Korean counterparts in OFC2024. OE Solutions was originally and many domestic companies in the same class of module companies, this year they focused on the launch of a series of special features of the following 400Gbps products. Startup Lessenger, on the other hand, is directly ahead of its foreign counterparts in terms of technology. Closer to us, Taiwanese companies are also either transforming specific markets or finding a niche and developing corresponding products.


South Korean enterprises or Taiwan enterprises, in the face of competition from mainland Chinese counterparts, they have come out of a market-oriented response to the road. The greater problem to mainland counterparts, after all, the number of mainland manufacturers much more, behind the non-market-oriented resources more.


These two times to the United States a big feeling is that the United States prices have risen a lot, especially associated with human services. Why the U.S. house car cell phone is not expensive, the U.S. catering travel service is very expensive? The fundamental difference is that the United States of America's labor is more valuable, we save the labor of Chinese employees, we are sacrificing the welfare of Chinese employees to help Americans maintain their standard of living. From this perspective, Chinese bosses really need to reflect on the low price strategy.


Two days ago, I went to Wutai Mountain in Shanxi, China to pray for blessings, and I feel that the temples there are actually very voluminous, and I realized that I can't worship a little bit after I went to a few famous temples, and the Bodhisattvas and Buddhas are all the same, so in the end, which temple should I go to? Until I saw the Seven Buddhas Temple, to see that they have a different way to worship seven different Buddhas, only a little bit of enlightenment. Getting out of low-quality competition comes down to quieting down and doing something different.


If our overcapacity and the United States of America's "de-Chinaization" is the general trend, in line with this trend, but also to enhance our competitiveness and employee welfare level, which is the history of the new generation of Chinese entrepreneurs to the examination. What Cordacord and HeGuangHui can do is to call on industry leaders to take the lead in fulfilling their social responsibilities and resisting unreasonable low-priced competition, and to encourage industry players to find their own characteristics and to look for the top three in a particular Niche market. From the economic sense, only when there are enterprises to achieve a certain degree of monopoly, can we really get out of the price war. As seen recently in the multimode fiber optic market.