Many Chinese firms part of wearable technology’s supply chain

February 26, 2014 Leave a comment

Many Chinese firms part of wearable technology’s supply chain

Staff Reporter

2014-02-19

A total of 23 listed companies from China are involved in manufacturing parts of wearable devices and 19 of them or 82.6% belong to the upper and middle stream in the supply chain, in contrast to the leading foreign vendors who concentrate on manufacturing end-products.

Different smart devices, such as navigation railroad bracelets, smartwatches, monitoring gloves for smart health care and smart golf gloves have become increasingly popular.

The supply chain for wearable electronics contains several elements: In the upstream of the supply chain there are sensors, amorphous alloys, flexible displays, processors, memory and other hardware. Touch modules, bone conduction headphones, MEMS microphones, receivers and software comprise the mid-stream. The downstream mainly comprises end-product vendors, including Google Glass, Apple’s iwatch and Microsoft’s smart watch.

In a report released by Shanghai-based Shenyin & Wanguo Securities, the company said that MEMS sensors are the key to wearable technology and the key in the upstream supply chain.

According to the Guangzhou-based Money Week magazine, nine Chinese firms in the upstream of the supply chain are listed on exchange, including suppliers of MEMS sensors, amorphous alloys, batteries and processors.

The magazine said that the major problem these Chinese firms were facing was that they were incapable of integrating the supply chain.

Since the convenience of wearable devices is that users can use their hands freely, voice control and voice exchange technologies have become a critical part of the middle stream. Bone conduction headphones are also the most basic equipment used with wearable devices.

The development of independent systems is the key for end products. However, the downstream end-product market is dominated by leading foreign tech giants. China only has four listed companies involved in the downstream of the supply chain in the wearable technology sector.

 

Filed under TMT Trends

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (www.heroinnovator.com), the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

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