China's current fabless chip market -- fragmented among too many little players fighting for the low-margin smartphone, tablet, and set-top box chip business in the domestic market -- isn't sustainable. To break that cycle, fabless companies require fresh focus, more distinct market/product differentiation, fewer and more patient investors, and probably a few more grown-up managers.
By going private, these companies become state-owned entities and look for a fresh infusion of state funds. But this tactic doesn't guarantee success. It's simply the latest angle Chinese fabless companies are taking in hopes of growth and profitability.
Chinese firms delist to gain access to public funds
Posted on Thursday, August 14 2014 @ 10:07 CEST by Thomas De MaesschalckEE Times notes there's a growing trend of Chinese fabless firms delisting from Nasdaq to become quasi-state enterprises. The site names Spreadtrum Communications and RDA Microelectronics as examples from firms who go "private" to be able to get a fresh infusion of state funds:
