As an industry with obvious periodicity, after the explosive growth in 2017, the global semiconductor industry has entered a period of adjustment since the second half of 2018. In 2019, the market is expected to remain at a cyclical bottom due to the declining demand for consumer electronics and other products, and the weak willingness to switch smartphones. Michael Heinrich, the general manager of Asia, agreed with the general trend of media conference held by the world-renowned distributor Ru Zhuoli recently. He also pointed out that even though the market development momentum did slow down in 2019, we still see new applications emerging in the existing market, and the development trend of electrification of vehicles and digitization of industry is expected. Michael Heinrich also predicts that in mid-2019, driven by new applications, the market is expected to reverse the downturn.

The market as a whole has cooled down and hot spots still exist.

Despite the overall cooling of the current market, the heat in some areas remains unchanged. Michael Heinrich is bullish on both automotive and industrial markets. In the automotive field, the most important growth point is the electronization of power assembly system, that is, hybrid electric vehicles with internal combustion engines and motors and electric vehicles. This trend involves not only automobiles, but also all means of transport, including electric bicycles or booster bicycles. The biggest challenge in this area is how to improve the distance of electric vehicles.

In the industrial field, the digitization process is constantly advancing, especially through large data management to achieve a comprehensive networking. This requires upgrading "big data" to "smart data" and extracting relevant parameters and content from it in order to make wise decisions, which applies to all fields and applications. It can also be the entry point of wireless communication to realize the networking of all wireless communication devices, including Bluetooth, LTE, ZigBee and Wifi.

Confucian Zhuoli also attaches great importance to the development of artificial intelligence. He believes that the subject of artificial intelligence is closely related to automotive and industrial applications. There will be application space of AI in the fields of automatic driving, battery management, electric vehicle, sensor technology and networking of industrial and production equipment. In the future, people will use artificial intelligence in an infinite field, which will be a vast market.



Key Layout: Automobile, Industry and AI

In 2019, Rudroli aims to continue investing in the fast-growing market, focusing on automotive electronics, industrial semiconductors and related AI applications.

Michael Heinrich said that electric vehicles are of great significance to China, where the market is growing much faster than in Europe. Electric vehicles need new products and technologies in the electronic field, as well as new materials such as silicon carbide and gallium nitride. These new semiconductor technologies bring us new growth momentum, but also a performance growth point. As a battery supplier, we have good access to customers and strive for the top in all market areas, especially in electric vehicles and even the whole automotive industry, because we can provide a comprehensive product mix. Customer feedback and corporate performance have shown that we are on the right path to development.

In the field of industrial semiconductors, Confucianism focuses on industrial communication. Michael Heinrich said that it would be adjusted directly according to the strategy of Chinese market participants to ensure the best combination of products and systems for customers and achieve growth with China. Ru Zhuoli will further expand its local team in China. Only a Chinese team with a better understanding of local customers and markets can be successful.

As for AI, it is a wide-ranging topic: image processing, image recognition, pattern recognition, pixel recognition and so on, all of which belong to the field of AI. Another aspect is to equip the smallest sensor system with artificial intelligence, especially to describe the physical processes in the model in detail, and then compare them with the collected data accordingly. We attach great importance to this application. To this end, we are investing in the training of employees and the basic components of artificial intelligence.



Asian Strategy to Strengthen Local Service in China

Ru Zhuoli's strategy for Asia in 2019 includes building new warehouses in mainland China and Singapore, and new offices in Tianjin, Korea, Japan, Vietnam and the Philippines.

Michael Heinrich said that the overall expansion strategy includes the establishment of a third warehouse in Asia and the first local warehouse in mainland China. At present, the specific location is still under further discussion, but it is certain that these new facilities will greatly expand Confucian logistics capabilities and give them greater flexibility. In addition, the plan will expand the franchise of Conrad throughout Asia, while expanding the overall product portfolio. Conrad's strategic objectives also include further investment in technological resources and the search for potential independent design partners.

In addition, Michael Heinrich will invest more in sales, FAE and technology marketing, and set up a new office in Tianjin, together with offices in Shenzhen, Shanghai and Chengdu, to provide localized support services to Chinese customers.

Rudroli ranks 11th in the global distribution market, 3rd in the European distribution market, headquartered in Ispringen, Germany. In fiscal year 2018, Conrad's turnover exceeded $1.2 billion (1.05 billion). With more than 1700 employees worldwide, it has logistics centers in Asia, Europe and North America, with annual shipments of more than 80 billion units.