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◎He Jun believes that when the semiconductor industry enters a downturn, companies begin to focus on innovation in existing factories, cost reduction, and efficiency improvement, and also become more aware of the importance of strategic supply chain management. For a company like Getech, this is not a risk but more of an opportunity.

Reporter: Chen Pengli     Editor: Wen Duo    

On July 6th, the 2023 TCL Global Ecosystem Partners Conference was held in Wuhan. That day, He Jun, Vice President of TCL Industries and CEO of Getech, was interviewed by reporters from Daily Economic News and other media. When discussing the progress of domestic substitution in industrial software, He Jun stated that in recent years, driven by national policies and the manufacturing industry's own needs, domestic industrial software has indeed made significant progress. "For example, in areas like DDL, simulation, and core semiconductor software, three years ago there were basically no domestic manufacturers." He remarked that now "more and more Chinese companies are appearing in these fields."

However, despite the progress, overall, China's industrial software industry is still in its early stages, with a significant gap compared to overseas industrial software. During the interview, He Jun also mentioned that in recent years, many small new companies have entered the highly barrier-intensive industrial software industry. "This actually makes the industry very unhealthy; I think it's a big misconception." He expressed that while in the past people believed internet companies could also develop industrial software, it is now increasingly understood that industrial DNA and manufacturing experience are essential to excel.

Image source: Provided by the company

He Jun also told reporters that Getech's next strategic plan is to vertically 'deepen' the new energy and semiconductor industrial chains while horizontally empowering other industries.

Companies with Industrial DNA Excel in Industrial Software

Among home appliance giants, TCL, Midea, and Haier have each incubated their own industrial internet platforms. Getech was incubated by TCL Huaxing. Based in the semiconductor industry, Getech has now extended its digital business to vertical sectors such as pan-semiconductor, new energy, and 3C electronics.

At the July 6th 2023 TCL Global Ecosystem Partners Conference, Getech officially announced its establishment in Hubei. He Jun was also interviewed in Wuhan by media including Daily Economic News.

When discussing domestic industrial software, He Jun stated that it has made significant progress in recent years. Industrial software R&D often requires large investments and high technical difficulty, and in the past, few manufacturers were willing to invest. Now, in some 'bottleneck' software areas, many Chinese manufacturers have emerged. Secondly, Chinese software companies' solution capabilities and production understanding have also improved. It is increasingly understood that industrial DNA is essential to excel in industrial software. "Without a deep understanding of production, processes, techniques, and equipment, it is impossible to develop good software or truly improve efficiency in factories... Top overseas software companies almost always have manufacturing backgrounds."

Despite some progress, He Jun emphasized that China's industrial software development is still in its early stages. On one hand, from the perspective of software service providers, there are very few companies nationwide with pure software revenues exceeding 2 billion yuan, indicating small overall company size. Small size means poor investment capacity. On the other hand, companies lack strategic determination and are unwilling to make long-term investments. Furthermore, some companies still lack sufficient industrial experience. "Many investors or industry insiders believe that industrial software can be developed by gathering a few software experts to start a business and achieve digitalization from scratch in factories," he said. "I think this is a big misconception."

He Jun added that TCL adopts a long-term perspective towards Getech's development, focusing not on current operational performance but on building core capabilities at this stage.

Semiconductor Industry Downturn Presents an Opportunity

"We believe that to truly excel in industrial internet platforms, we must focus on technology, not overemphasize business models or connection numbers. The core is always technology," said He Jun.

When asked whether the semiconductor industry downturn poses challenges, He Jun responded that the entire semiconductor downturn is longer than expected, but for a company like Getech, it is not a risk but more of an opportunity.

When the semiconductor industry is in a high-growth phase, the focus is often on quickly building factories and increasing capacity. For factory digitalization, companies typically use foreign equipment and packages, leaving no opportunity for domestic companies to try. However, when the semiconductor industry enters a downturn, companies start to focus on innovation in existing factories, cost reduction, and efficiency improvement, and become more aware of the importance of strategic supply chain management. This semiconductor downturn provides an opportunity for Chinese software companies to collaborate with semiconductor companies on independent innovation.

Regarding Getech's next strategic plan, He Jun stated that the company will firmly deepen and specialize in the new energy and semiconductor industrial chains. "Industrial integration is an important direction for our next steps." Secondly, the company hopes to leverage its role as a 'dual-cross' platform to empower as many industries as possible, which is the responsibility of a 'dual-cross' platform.