Gree Electric boss Dong Mingzhu has clearly never seen a challenge she didn’t relish. Despite doubts about her plans to self-develop microchips for the Zhuhai-based home-appliance giant, she is pushing ahead with a RMB50 billion (US$7.3 billion) investment project over the next three years.
The company told Caixin Global it has already started using self-developed chips in some of its air conditioners, and it plans to have them installed in all of them by the end of the year. This is less of a gamble and more of a prudent diversification strategy than it might at first appear. Gree is currently spending RMB4 billion a year on microchip purchases. Developing its own chips is clearly a response to the U.S. attack on ZTE and Huawei.
Investors in the Shenzhen-listed company (SHE: 000651) appear to be of two minds about Gree’s plan, bouncing the stock up and down over the past month. However, since the start of the year, it has made a robust 57% return. Read more.