IC ENTREPRENEUR GROWS FROM ONE-MAN BAND TO A TEAM OF 300
“The key assets of an IC design house are its innovations and in Hong Kong such assets are protected by the city’s well-established legal system and its robust intellectual property laws. That is why all our core technologies are developed here”
Chuck Cheng, CEO and President, AppoTech
Through investing heavily in R&D, AppoTech achieves 578 percent growth over the last 3 years to HK$300 million revenue per annum.
Chuck Cheng moved from Silicon Valley to Hong Kong in 2003 to set up his own integrated circuits (IC) design house AppoTech Ltd. Starting as an incubatee of the Hong Kong Science and Technology Parks, AppoTech has since grown to a company with 300 employees and an annual revenue of HK$300 million. The company was ranked 23rd in 2010 Deloitte China Technology Fast 50 Report. In 2011, Cheng envisages the company’s revenue to grow three-fold to hit the HK$1 billion mark.
Cheng noted that the IC market in China is worth over RMB 1 trillion, 60 percent of which is concentrated in the Pearl River Delta (PRD), the world’s most vibrant manufacturing base for electronic products. Most of the world’s leading consumer electronics companies have OEM operations in the PRD, yet Mainland China still relies heavily on imported IC, with only 20 percent of the IC supply being manufactured locally. “The Mainland IC market is like a gold mine, sitting there waiting to be explored,” said Cheng.
Hong Kong as an R&D hub
“The key assets of an IC design house are its innovations and in Hong Kong such assets are protected by the city’s well-established legal system and its robust intellectual property laws. That is why all our core technologies are developed here,” Cheng said.
AppoTech manufactures its chips in Mainland China to benefit from the low-cost of manufacturing thus enabling it to supply high-quality chips at more competitive prices. Hong Kong’s proximity to the PRD also allows AppoTech to differentiate itself from overseas competitors by providing comprehensive technical support and aftersales service to clients, many of whom are based in the PRD.
“In addition to supplying ICs to clients, we also provide reference designs. Our engineers visit clients’ manufacturing plants to provide technical support during the production process. We collaborate closely with our clients to fine-tune our products to suit their needs,” Cheng said. Top quality products at a reasonable price together with this kind of tailor-made service have been instrumental in winning the trust and loyalty of their clients.
In 2010, AppoTech entered the solid state memory market by developing its own USB 3.0 technology. Only around 10 companies in the world have such technology, and AppoTech is one of them. “Although we were the last to enter this market, with our high quality and low cost formula we quickly gained market share. We are now the largest player in Mainland China,” Cheng said. Looking ahead, he plans to continue to use Hong Kong as the company’s base, move up the value-chain and expand from consumer electronics IC to the more technologically demanding industrial and automotive IC market.
Fast Facts: AppoTech
- IC design house AppoTech Ltd provides one-stop IC design solutions. It offers a wide range of consumer chips applicable to wireless baby monitors, digital picture frames, car stereo sets, MP3/MP4/MP5 players, SD card readers, USB flash drives and home appliances
- President of the company Chuck Cheng has over 20 years of experience in designing and managing the business of microprocessor architecture/IC. He has founded three Silicon Valley companies and is the owner of nine US patents. He was named the Most Promising Entrepreneur in the Asia Pacific Entrepreneurship Awards 2009
- In 2008, AppoTech won the Hong Kong Award for Industries in the technological achievement category and the DHL/SCMP Hong Kong Business Award for SME. The company was ranked 23rd in the 2010 Deloitte China Technology Fast 50 Report
- In 2011, it plans to expand its Hong Kong operation and achieve HK$1 billion annual revenue