Cytech Systems Shows up at the electronica South China 2024, Tapping into the New Growth Cycle of the Semiconductor Industry
Recently, the electronica South China (hereinafter referred to as the Exhibition) was grandly unveiled at the Shenzhen World Exhibition & Convention Center. Taking foothold in the Guangdong-Hong Kong-Macao Greater Bay Area, this Exhibition radiates to the markets in South China, Southwest China and Southeast Asia, brings together popular technologies and applications such as artificial intelligence(AI), data center, new energy storage, wireless communication, hardware security, new-energy vehicle (NEV), third-generation semiconductors, edge computing, industrial Internet and Internet of Things (IoT), and hosts numerous well-known enterprises from home and abroad. It not only displays the cutting-edge technologies on the electronic innovation industry chain in an all-around manner, but also attracts a large number of high-quality buyers and elites in the industry, further promoting the industry’s crossover cooperation and in-depth collaboration.
Cytech Systems Limited (hereinafter referred to as "Cytech Systems" or the Company) is an industry leading electronic component distributor that takes the Greater Bay Area as its foothold. Together with its subsidiary CHCHIP that focuses on the promotion of domestic chips and modules, Cytech Systems also made its appearance at Booth 3A09 in Hall 3 of the Exhibition, hoping to promote all of its business lines through this high-quality innovation display platform and to enhance its brand awareness in the electronic component distribution industry.
Figure 1. Cytech Systems shows up at the electronica South China, strengthening its industry status
The distribution industry still survive under pressures amid the upbeat global semiconductor market of 2024-2025
With the increase of global demands for artificial intelligence (AI) and high-performance computing (HPC), as well as the recovery of demands in markets such as smartphones, PC, servers and automobiles, the semiconductor industry is seeing a new round of growth. In June, the World Semiconductor Trade Statistics (WSTS) adjusted up its forecast for the global semiconductor market, expecting a 16% growth and a market value of US$611 billion in 2024. It’s learned that this growth is mainly attributed to the strong performance in the past two quarters, especially in the computing terminal market. In contrast, WSTS estimated at the beginning of this year that the size of the global semiconductor market in 2024 would increase 13.1% on a yearly basis to reach US$588.36 billion. WSTS even expects a robust growth in both 2024 and 2025.
Figure 2. WSTS estimates that the global semiconductor market grows in both 2024 and 2025
However, the electronic component distribution market is still under multiple pressures. Due to the Long Tail Effect resulting from the previous sluggish market, the profit margin of the distribution industry is being further curtailed. Currently, the global electronic component distribution industry shows a concentration effect at the top, especially among international players. Compared with overseas markets, the concentration degree of domestic electronic component distribution industry is relatively low. With the ever-increasing requirements for technical complexity and specialized application in the electronic information industry, the traditional distribution model is far from enough to meet customer demands.
Cytech Systems remarked that at present, customers require distributors to provide more values, such as price, delivery time, technical support. When the under-supply market ends, distribution practitioners must do the business they excel in on a more professional and dedicated basis.
Sources from Cytech Systems said that to cope with this round of industry changes, Cytech Systems has developed overseas and domestic brand agency business step by step, attempting to transform from independent distribution, turn it into the Company’s new business growth point, and enhance the Company's diversity and participation in the market. By doing so, the Company will speed up the improvement of value-added services in its independent distribution business. In addition, the design schemes with agency lines can match the support from original manufacturers, providing customers with in-depth implementation services. On the other hand, the Company also classifies and manages the massive customer groups it has amassed. In the meantime, the Company takes foothold in successful cases to broaden the brand awareness and industry influence of Cytech Systems and even CHCHIP, extending its customer groups to global OEM, EMS and ODM.
Expansion of both international & domestic agency business lines, further improvement made in competitive areas
The shortage cycle of electronic components from 2023 to 2024 has come to an end, and exploring new business opportunities has become a common concern in the electronic component distribution industry. As mentioned earlier, Cytech Systems currently aims to strongly develop the agency business division and the PPV scheduling service, in order to promote the rapid growth of the agency line business while steadily advancing the distribution business.
At Booth 3A09 in Hall 3 of electronica South China 2024, Cytech Systems and CHCHIP worked together again for joint demonstration. Cytech Systems showcased the Demos and chip solutions of Torex, a top-class Japanese power management IC manufacturer, for different applications such as smart ring, AR/VR glasses, vehicle-mounted camera and hearing aid. As is known to all, Torex linear voltage regulator boasts small size, low energy, low noise and simplified design, making it very suitable for scenarios with high requirements for space and performance.
Figure 4. Major products displayed by Cytech Systems at the electronica South China
In addition, power line communication (PLC), electric vehicle communication controller (EVCC) and SECC were also highlighted by Cytech Systems in the display, and they were developed by Unicomsemi, which specializes in industrial communication. It’s learned that these technical solutions have been successfully applied in such fields as smart meters, smart energy, smart city and electric vehicle charging system. CHCHIP focused on displaying excellent samples developed by AIPUPOWER, WCH, PHY PLUS, MOT, BICAI and other companies in their respective fields.
As a matter of fact, when choosing agency product lines, Cytech Systems has its own considerations and analyses. For example, Torex enjoys the advantage of being an international famous brand. In addition, the original manufacturer itself is seeking new changes, attempting to bring new vigor to brand and product promotion by changing agents, in hopes of achieving business growth.
This has partially echoed with the Company's appeal to broaden its agency business, namely to build a reputation for the agency business by seeking original manufacturer with brand influence. On the other hand, Cytech Systems also values the upbeat momentum of domestic manufacturers amid the significant growth of the global semiconductor industry’s market scale.
Recently, WSTS adjusted up its forecast for the year 2024, mentioning that in terms of regional business growth, the Americas and the Asia-Pacific region are expected to achieve significant growth of 25.1% and 17.5% respectively. In 2025, the business in all regions will continue to expand, and it is expected to maintain a two-digit growth on a yearly basis in the Americas and the Asia-Pacific region. Besides WSTS, the international semiconductor organization SEMI is optimistic about the recovery of the semiconductor industry. SEMI estimates that the global semiconductor industry is expected to grow by more than 10% in 2024, and the market size will approach US$600 billion. Ju Long, vice president of SEMI Global and president of SEMI China, also noted that the China is still the largest semiconductor market in the world.
Integrated circuit (IC) is the key technology of the electronic information industry, and its R&D and production have always been the top priorities during the development of China's electronic information industry. Thanks to years of efforts and technology development, China's high-end electronic component industry has achieved initial success, but it is still uncompetitive in brand and product as compared to international leading manufacturers. For this reason, domestic original manufacturers have a strong demand for promotion. With the continuous improvement of their technical level and production capacity, domestic original manufacturers eagerly demand local distributors to provide targeted promotion services.
Cytech Systems has learned through in-depth market research that the development potential of Chinese chip industry is huge and the market space is broad. Quite a number of overseas OEMs have changed their attitudes towards the Chinese chip industry and accepted domestic chips little by little. For electronic component distributors, they need to enrich premium domestic agency product lines and improve service capabilities.
Figure 5: Cytech Systems exchanges views with visitors at the electronica South China
PHYPLUS TECHNOLOGIES is one of the manufacturers that take CHCHIP as the agent. It focuses on the development of low-energy Bluetooth master chips, and boasts proprietary Bluetooth protocol stack as well as market product application development capabilities. MOT is a domestic famous high-tech enterprise in semiconductor packaging and testing, and also a state-level “Specialized, Sophisticated, Distinctive, and Innovative” little giant enterprise, enjoying rich product varieties and applications in the power device field.
Cytech Systems and CHCHIP choose these agency lines not only based on the product lines’ extensive application and popularity in the market, but for fitting their market positioning, making improvement in competitive areas such as industry, new energy, and automobile, empowering the company to expand from single product supply to overall solution, and continuously bringing more values for customers.
Today, the ever-increasing demands in the global semiconductor market are driven by the booming development of new energy vehicle (NEV), 5G/6G, autonomous driving, and artificial intelligence (e.g., AIGC and AIPC), etc. Cytech Systems and CHCHIP, which are committed to exploiting the front-line market, have long been aware of the market trend. Amid the market changes, it is crucial to seek appropriate opportunities to expand the agency or distribution business and to increase the Company's participation and brand awareness in the industrial chain. This is also the original aspiration of Cytech Systems to participate in a series of exhibitions.
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