Abstract:
The purpose of this study is to analyze the Integrated Circuit (IC) industry
profitability performance in China. This study is urgently important due to the impact
of the Sino-US trade war that happens recently. Also, the Sino-US trade war is
predicted to influence seriously the economic development speed and un-employment
issue in China and the United States. In this regard, the study analyses the financial
performance of the five big IC corporations in China, such as the sales volume, the
percentage of R&D personnel, the percentage of top 5 customers, and the percentage
of top 5 suppliers as independent variables. Then, this study employs net profit and
ROAE as the proxies of profitability analysis that represent dependent variables. The
research methodology is panel data general least square (GLS) regression by STATA
M-64. The result of the study is that the sales volume, the percentage of R&D
personnel, the percentage of top 5 customers, and the percentage of top 5 suppliers
has a significant influence on the corporation profitability. In addition, this study
shows that the percentage of personnel in R&D has the greatest influence on the
corporate profitability. Through this finding, this study confirms that in China IC
industry, the percentage of personnel in R&D plays important role to generate its
profitability, therefore, this study encourages the future researcher to emphasis on the
human capital characteristics that will be needed to sustain IC corporations in China
in the future.
