In recent years, the “core shortage tide” has triggered a series of industrial changes, the most important of which is the rapid development of domestic substitution. Compared with the one-year delivery period of materials from major manufacturers, many domestic materials have lower prices and shorter delivery times under the premise of realizing functional replacement, and have become the first choice of terminal manufacturers.
The macro environment is becoming more and more changeable, and the self-sufficiency of domestic chips must be continuously deepened in order to better “escort” the major industrial chains. This means that whether it is at the policy level or the industry level, the issue of domestic chip replacement will definitely become more and more hot. Not only relatively low-end analog devices and MCUs, but also relatively high-end car-standard materials will also be fully rolled out. Dachang materials start a “head-to-head” fight.
As an organic whole, the chip industry chain is shaped by the long-term linkage between original factories, distribution channels and production terminals, and the bridging role of distribution channels in the industry chain is still key. Existing statistics show that less than 1% of super customers purchase directly from the original factory, accounting for 44% of the total; the remaining 99% of customers purchase the remaining 56% of the amount through distributors. It can be seen that local emerging original manufacturers still need to use distribution channels to promote products more efficiently.
On the other hand, in recent years, international original factories have pursued direct sales and consciously alienated distribution channels, which has created challenges for many distributors. Nowadays, domestic substitution is developing rapidly, and distributors’ access to domestic materials is also an important link for continued development. However, the process of serving domestic substitution also has its particularity. Distributors need more complete comprehensive service capabilities in order to be relatively comfortable.
In the chip industry, the original factory has long been responsible for the R&D and manufacturing of products, while the promotion and circulation of products have to be handed over to distribution channels. At present, many local original manufacturers are still in their infancy and development stage, and in-depth research and development cannot take into account promotion and marketing. What’s more, the vast majority of terminal manufacturers switch to domestic materials, and they also need distributors to help them screen and test. In this process, the technical support provided by distributors and the guarantee of material supply are two core elements.
Model selection is the starting point for end customers to replace. How to choose the right chip from a wide variety of domestic chips is not an easy task. When the original factory’s technical support has no time to take care of it, the task of assisting model selection must rely extensively on competent Distributor. Whether it is an in-situ replacement that is less difficult and has a clearer process, or a functional replacement that requires modification of the design or even a redo of the scheme, the full participation of the distributor is required. Especially in terms of functional replacement, distributors and original manufacturers are often required to coordinate a feasible solution, which further requires distributors to cooperate tacitly with the original factory, so as to help customers smoothly transition to domestic alternatives.
After solving the material selection problem, the distributor will start to supply materials to customers. After experiencing the tide of core shortage, many end customers have a deep memory of the out-of-stock and price increase of materials from major manufacturers, and the difficulty of finding one material. Now they switch to domestic materials, which must require more reasonable material prices and stable supply, which requires distribution. Businesses should not only establish advantages in the traditional warehousing and logistics field, but also use emerging big data technology to analyze market conditions and help customers establish a complete inventory management mechanism to reduce the cost of the entire industry chain for end customers and prevent unexpected situations Material supply is affected.
Of course, the role of the distributor’s supply chain hub is not only for end customers, the original factory also needs to use the market information collected by the distributor to deeply analyze the market demand trend and industry development trend, so as to develop products more targeted . For example, when consumer electronics is currently in the cold, local original manufacturers are transforming into automotive and industrial control applications. It is indispensable to refer to the information collected from distribution channels to determine the pain points to be solved and the indicators to be achieved by new products, so as to carry out product research and development in a targeted manner. Try to avoid detours in the process of transformation.
All in all, the wave of domestic substitution requires distributors to have comprehensive competitiveness. Whether it is technology accumulation, team building, or supply chain integration, it is a test of the “internal strength” of distributors. Distributors who dealt with foreign materials in the early stage and accumulated deep customer resources and service experience will be more active in the wave of domestic substitution. Once end customers start the domestic substitution process, these competitive distributors will be the first to connect and form a solid cooperative relationship with customers.
This round of domestic substitution of chips is a rare opportunity, but it also means that the local industrial chain will have more collisions with the ecological pattern of international manufacturers. At present, major international manufacturers are expanding their production one after another. After the supply of materials recovers, they may regain their domestic market share. During this domestic substitution window period, local original manufacturers and distributors need to give full play to their respective advantages in order to preserve the previous accumulation of domestic substitution and open up a larger market.