Sept. 30 (NBD) – China's home appliance maker Galanz announced a strategic partnership with SiFive China, a fabless semiconductor company, to produce chips for IoT (Internet of Things)-enabled home appliances, and unveiled the plan to venture into edge computing by partnering with German tech startup Bragi GmbH on an event dubbed Galanz Next 2019 held on Saturday.

At the event, Galanz released an IoT-driven home appliance chip collaboratively made with SiFive and disclosed another chip will be soon published. Both chips will be applied in all Galanz products.

Photo/Chen Pengli (NBD)

The new move signals the company's transformation from a traditional manufacturer into a sci-tech firm, said Liang Zhaoxian, president of Galanz.

In the future, Galanz is aimed at integrating chips, edge computing technologies and wireless power to create IoT solutions, revealed Liang Huiqiang, deputy chairman of Galanz.

National Business Daily (NBD) observed that Galanz is not the first home appliance maker that has been ambitious for a foothold in the chip industry.

In 2018, Gree Electric Appliances Inc. began to independently develop chips for air conditioners. In August last year, it established a chip company with a registered capital of 1 billion yuan (141.4 million U.S. dollars) to strengthen the research and development. Late that year, the home appliance giant invested 3 billion yuan to indirectly participate in the acquisition of Nexperia, a unit spun off from Netherlands-based NXP Semiconductors.

Midea Group, another leading electrical appliance producer in China, is also eyeing the chip market. In March this year, it formed a partnership with Alibaba Cloud, a cloud computing unit of tech titan Alibaba, to make chips customized for AliOS Things, an operating system for IoT. In April, Midea revealed to NBD that the company has mastered technologies for the independent development of IPM modules for air-conditioner chips.

Explaining the reasons for home appliance companies' successive deployment in the chip sector, Zhang Yanbin, a home appliance industry analyst, told NBD that through developing chips themselves, home appliance makers hope to grasp more core resources and get involved in all links along the industry chain, so as to curb the operating costs and strengthen their competitiveness.

In addition, these manufacturers are also seeking to expand the business amid the rise of the smart home market. 

Statistics from global analysis firm IDC showcased that the global sales of smart home appliances soared by 37 percent year on year to 169 million units for the first quarter of 2019, and is expected to reach around 1.5 billion units in 2023 with a compound annual growth rate of 14.9 percent.

According to industry observer Liang Zhenpeng, currently most chips for home appliances are procured from overseas companies. With the advent of a smart home era, there will be huge demand for chips. Therefore companies like Galanz are trying to shake off the reliance on outside chip makers, Liang added.

Email: lansuying@nbd.com.cn