Mobile phones have a much larger audience than music players, not to mention that mobile phones can also have built-in music playback functions. Therefore, Zhou Xin generously asked Apple to develop iPod Zero instead of using his own brand to create this very futuristic product.
For enterprises, products like iPod Zero can well build user brand recognition. When Xiaomi made the full-screen Mi Mix, it was the time when they had the best hope of establishing a foothold in the high-end market, because the first generation of Xiaomi Mi Mix was the first This truly full-screen phone is stunning.
It’s just that Xiaomi’s subsequent operations have caused the Mix series to lose its characteristics, recognition and user recognition among Xiaomi’s various product lines.
After the release of iPod Zero, sales grew rapidly. Apple's stock price rose by 30% in just two weeks. Investment institutions began to pay attention to Apple again, paying attention to this established company that was once able to compete with Microsoft.
Today's Apple is far from being a giant. Steve Jobs actually wanted to make a smartphone similar to the Mphone, but he was helpless because the first-generation iPod did not raise enough funds for Apple. If he chose to use Apple shares to finance, the market would be willing to pay There are few financial institutions for money.
Zhou Xin’s shares account for 40%. When it comes to financing, it seems that only Zhou Xin is willing to pay. If he increases his shareholding in Apple, he will approach the 51% control line, and other financial institutions will either impose harsh conditions. , or there is no way to give a price that satisfies Apple.
Apple had no choice but to continue research and development along the path of music players, and the first-generation iPod cannot be said to be unsuccessful, but it just did not bring as much profit to Apple as Jobs expected.
The annual sales volume of the first-generation iPod was 800,000 US dollars, and the price was US$299, which meant that the annual revenue was US$240 million, excluding costs and marketing investment, and the profit was limited.
This year the situation is different again. After the launch of iPod Zero, financial institutions quickly raised their expectations for Apple. They believe that the two new generation iPod products can bring Apple more than one billion US dollars in revenue.
Under such expectations, Apple's stock price soared, becoming the fastest-growing company in the past two weeks. As Apple's largest shareholder, Zhou Xin also became the biggest beneficiary.
The increase in Apple's market value alone has brought Zhou Xin about 500 million US dollars in book profits. It is so easy to make money in finance. No matter whether you are doing short-term trading or long-term trading in the secondary market, it is faster compared to the industry. money.
Real industries such as services and manufacturing have zero profit margins or even operate at a loss. In order to keep the business running, experience or belief tells entrepreneurs that if they can earn excess profits one day in the future, they will stick to it.
Samsung bucked the trend and expanded during the cycle of sharp declines in memory chips, further driving down the price of memory chips and forcing its competitors to go bankrupt. In the end, it achieved excess profits as they expected.
The most important thing for the real industry is to maintain operation. As long as it can maintain operation, any miracle may happen. And the old Apple employees who have persisted since 1995 until now have a feeling that they have persevered to clear the clouds.
If the old employees of Apple feel like they are seeing things through the clouds, then the employees of Xinxin (Huahong) feel like they have escaped.
Previously, at Huahong, chip manufacturing was described as half-dead. The overall chip environment was too bad, especially for memory chips. The market price of memory chips has dropped by 90%.
A 90% drop is not scary. A 90% drop is not scary until it reaches the bottom. In such an environment, Samsung bucked the trend and expanded. Samsung was not afraid of it during the Asian financial crisis in 1997, let alone the financial crisis now. In the past, Samsung maintained high capital expenditures and continued to engage in price wars in the field of memory chips.
The price of memory chips was even more exaggerated than the plunge. At this time, Neon Enterprise, which was cooperating with Huahong, had spun off the memory chip business and joined forces with Hitachi to establish Elpida Memory.
The neon semiconductor that Huahong relies on is like this, let alone Huahong NEC, which is at best an adopted son. NEC can't take care of it at all.
We can only allow Huahong Semiconductor to self-destruct. It is obvious that it cannot continue on the path of memory chips, or it cannot simply take the path of memory chips.
The problem is that logic chips are not that easy. It is not difficult to transform the memory chip production line into a logic chip production line. There are very few changes that need to be made.
The memory chip has a single function and is just a stack of memory modules. It is easy to design and manufacture. This was around 2000. The chip manufacturing process at that time was not as small as it was later, so it was easier to manufacture memory chips. As the manufacturing process became smaller, the difficulties of memory chips began to become more prominent.
Logic chips involve a variety of design rules, making them very complex to design and not easy to produce.
China lacks chip design companies, and it also lacks chip design companies that can match Huahong Semiconductor's process, such as Huahong's most advanced 0.18 micron process. Currently, apart from New Core Technology, there are still no organizations in China that can design chips with this level of technology. It remains at the laboratory stage and is still far away from commercial use.
Laboratory products do not need to consider cost and market, which is relatively easier.
It is mentioned here that the memory chip production line was converted into a logic chip production line. When the mobile Internet broke out, Samsung did this and did it on a large scale. They transformed a memory chip production line into a logic chip production line in the first quarter of 2012. Chip production line. And we started doing this on a large scale in the second quarter of 2012.
And in the chip industry, newly built chip factories generally start with memory, because this kind of product has a single variety, a huge quantity, complex processes, and a strong dependence on equipment, which is conducive to the rapid completion of the running-in of all aspects of the new production line.
After mature chip manufacturing companies achieve a certain level of memory, the production line is opened, and the equipment operates normally, they will slowly shift from logic chips to complex and diverse logic chips.
The core product designed by Xinxin Technology, the A1E chip, involves a process that is more advanced, or more sophisticated, than Huahong's. This has caused Huahong Semiconductor to fall into an embarrassing situation.
Without a market, producing memory chips at current prices means losing money every time you produce them. This is unacceptable for a state-owned enterprise. The more I produce, the more losses I make, so why do I still produce memory chips?
At that time, managers of state-owned enterprises in the chip industry like Huahong lacked the mindset of expansion against the trend. They had not benefited from expansion against the trend. It would be difficult for them to have such an understanding if they walked through the river in person.
From a God's perspective or just looking at the data, you will think that this is a natural thing to do. In cyclical industries, you have to endure the losses caused by the down cycle in order to enjoy the dividends from the up cycle.
But when you really see the losses on the books getting bigger and bigger, and your competitors are still expanding production, and the upward cycle is far away, few managers can have such determination and persistence.
Not to mention that for a company like Huahong, managers don’t have the final say. There are too many things to consider. One is that no one dares to take responsibility, and the other is that people who can make decisions can’t control what they want to. People don't have this ability.
In the first quarter of 2001, in just two months, the unit price of 128m memory chips fell from US$18 to US$0.99. This is an exaggeration.
Even US$0.99 is not a bottom, it is just a phased bottom. When the price of memory chips plummeted, Samsung continued to announce the expansion of the existing P series foundries. The lowest price of 128m memory chips fell to about US$0.7, which caused China to Hong's chip production line suffered huge losses throughout 2001.
If chip prices hadn't plummeted, Xinxin Technology would not have been able to accept Motorola's two 8-inch chip production lines in Tianjin at ultra-low prices.
Of course, this is a good thing for consumer electronics companies and consumers. The plummeting price of memory chips has caused a drop in logic chip OEM prices. If Mphone packages all chip production and screen production to Samsung for help, the manufacturing cost can drop to US$150. the following.
It's just that Zhou Xin doesn't want Samsung to grow bigger because of his own existence. With the support of unlimited low-interest funds, a model like Samsung can burst out super potential. Zhou Xin doesn't want Samsung to be stronger than the original time and space.
Back to Huahong, Huahong completed its cooperation with Xinxin Technology at the end of the first quarter. Xinxin (Huahong), a joint venture, fell into full load operation as soon as it completed debugging.
The full load here is based on the full load under the current situation, not the full load of the production line itself. Switching from memory chip production to logic chip production requires an adaptation time, both for the machine and the operator. .
The first batch of Bluetooth chip orders from Xinxin Technology is enough to ensure that Xinxin (Huahong)'s production line will be at full capacity for half a year.
After the release of iPod Zero and iPod 2, Xinxin Technology internally evaluated that Apple’s Bluetooth chip order alone was enough to keep the production line of Xinxin (Huahong) in production until the entire production line equipment loss accrual was exhausted.
The bulk of the annual cost of a chip foundry is equipment wear and tear. Generally, the book value of equipment will be cleared after seven years.
"Master Zhao, I finally understand why it is said that you are so busy that you are so busy and you are so idle. Since I was taken over by Xinxin, I feel that I do more work in one day than in the previous month." During lunch that day, Xiao Zhang and Master Zhao complained.
They used to have a lot of time to complain during the day, but now they almost only have time to chat during lunch.
As the technical director of Huahong, Master Zhao has much more to do than Xiao Zhang when the entire 8-inch production line is running at full load. He has no time to chat with Xiao Zhang when he has nothing to do like before. Zhang said a few sentences.
"Isn't it bad? Overtime wages are tripled, not to mention that after the merger of Yi and Xinxin, the wages were at least doubled.
Xinxin's management is indeed strict, but the benefits they offer are also real. "
Xiao Zhang said with emotion: "Boss Zhou is indeed very wealthy. I finally know how wonderful it is to work in a foreign company. Including overtime wages, our front-line engineers' salary is almost 10,000 yuan."
They are almost at the same level as IBM Research. Even if we only count ordinary wages, we are at the same level as Intel. "
Master Zhao curiously asked: "Come on, tell me about the treatment of companies such as IBM and Intel in their offices in China?
I do have classmates at places like IBM and Microsoft, but they are not fresh graduates. They have all worked for many years. Because their situations are different and their treatment is very different, they cannot be used as a reference factor.
Also, to correct you, Xinxin is not a foreign company, it is a purely Chinese company. "
Xiao Zhang mouthed: "Why is it not considered a foreign company? Although Boss Zhou is Chinese, his money comes from Americen. Judging from the source of funds, it is not an exaggeration to say that Xinxin is a foreign company.
Not to mention that most of their management are Chinese Americans and Chinese with green cards. "
Master Zhao waved his hand: "You don't understand."
Xiao Zhang saw that Master Zhao had no intention of arguing with him, so he answered the question just mentioned by the other party: "Microsoft's research institute in Yanjing can offer a monthly salary of 8k, and IBM's monthly salary is 5,400. If it is sales, it will be with sales The commission is also linked to the number of business trip days. Including the business trip commission, it can reach the level of 7 to 8k.
In addition, IBM's research institute can open more than 10,000 yuan, while Intel's is 7k, but Intel will pay double salary at the end of the year, but it seems that Intel only recruits graduate students, IBM recruits undergraduate students, and IBM Research Institute only recruits graduate students.
Microsoft Research does recruit undergraduate students. "
Master Zhao said: "You understand it quite clearly."
Xiao Zhang was a little embarrassed: "When I graduated from college, the female high school classmate I liked was about to graduate from Fudan. She wanted to go to a foreign company, and I helped her find out. Unfortunately, she couldn't join these companies. Don’t even think about those from the Second Polytechnic University.
But now Xinxin's treatment is comparable to that of big companies like Intel and Microsoft. If it were now, I might not be able to join. "
Master Zhao complained in his heart, if it were now, you would definitely not be able to get in. With Xinxin's salary, you can already recruit graduates of the level of Jiaotong University and Fudan University.
"So sometimes fate is very important, and some people are just born with good luck, like you, Xiao Zhang."
The historical process is extremely important. Driven by Xinxin, the entire semiconductor industry in China is showing signs of prosperity. In the first half of 2002 alone, the total investment in the Pudong Microelectronics Industry Zone planned by Zhangjiang Hi-Tech Park has been close to 100%. billion dollars.
Of the tens of billions of dollars, Zhou Xin has invested about two billion, and the rest includes Chinese official capital, foreign capital, and a small amount of private capital. It gathers nearly a hundred chip R&D, design, manufacturing, packaging and testing companies as well as semiconductor materials, equipment, devices and other supporting companies. The total investment accounts for half of China's chip industry.
In addition to Xinxin, there are 11 companies with investments exceeding US$100 million, including: SMIC, Grace, Huahong NEC, Intel, etc.
Pudong has become the main force of mainland China's chip industry. The leap-forward development of Pudong's chip industry has improved China's chip manufacturing level and enabled domestic related industries to initially have the ability to compete with global peers. Currently, there are 5 8-inch chip production lines in production in mainland China, including 3 in Pudong.
However, these five 8-inch production lines and the two 8-inch production lines in Tianjin are actually managed by Shenhai Enterprises headquartered in Zhangjiang.
Driven by Zhou Xin, the cluster effect has gradually taken effect. At the same time, Bluetooth chips have also allowed Chinese chip practitioners to see the power of innovation.
"Is it possible for Huahong to build a model like Xinxin Technology? That is, similar to Samsung's IDM vertical manufacturing. The chip industry, from design to manufacturing to packaging and testing, is all contracted by Huahong." This is what Huahong officials are doing when investigating Huahong questions raised at the time.
Because the cooperation between Huahong and Xinxin Technology is the first time in China that a state-owned enterprise and a private enterprise have cooperated to establish a subsidiary, and the subsidiary adopts a structure of same shares but different rights.
Huahong owns 80% of the equity of Xinxin (Huahong), but it can only enjoy dividends and supervision rights, but has no actual management rights.
In the first quarter after its establishment, that is, the second quarter of 2002, Xinxin (Huahong)'s data was quite impressive. In May, its production capacity exceeded 10,000 pieces, and in June, its production capacity reached 30,000 pieces. Its production capacity was fully reached. Under normal circumstances, the monthly production capacity can reach 50,000 pieces.
Later, TSMC set up an 8-inch factory in Shenhai. Among the two production lines, one had a monthly production capacity of 35,000 pieces and the other had a monthly production capacity of 75,000 pieces.
In fact, when the market was good, Huahong's monthly production capacity could reach 50,000 pieces, but those were memory chips, and logic chips were more difficult than memory chips.
The factory price of a single Bluetooth chip designed by Xinxin is US$20, which means that Xinxin receives the Bluetooth chip from Huahong at a unit price of US$20, and then sells it to Sony and Apple for US$50.
In 2002, the world's major Bluetooth chip manufacturer Cambridge Silicon Radio Company, the ex-factory price of their Bluetooth chips fluctuated between 8 and 10 US dollars. Before Xinxin Technology launched Bluetooth chips, the Bluetooth chips produced by Cambridge Silicon accounted for 50% of the market share.
Sony is also an investor in Cambridge Silicon. After the launch of Xinxin's Bluetooth chip, Cambridge Silicon's valuation plummeted by 70%, and several investors wanted to divest from Cambridge Silicon, including Sony.
Xinxin Technology can exclusively enjoy the dividends brought by the advancement of Bluetooth technology and enjoy high premiums.
When there is no way to enjoy the premium, you can still rely on technology licensing to collect technology licensing fees. This is the Qualcomm model.
From a purely profit perspective, the Qualcomm model is actually a more efficient way to make money.
"Actually, Huahong has a chip design company. When we started the 909 project, we designed it according to Samsung's IDM model." A representative from Huahong replied.
"Then why did Huahong's chip design company not play its due role? Before cooperating with Xinxin, Huahong had always proposed to adopt the chip foundry model, unable to achieve self-sufficiency and design its own chips?" Huahong official the researcher asked.
Huahong’s representative found that the researchers from higher levels had no understanding of Huahong’s business. He explained: “Huahong has always been engaged in chip design business.
Including last year, we cooperated with Huawei and Neon’s Fujitsu to jointly develop China’s first communication chip.
Huahong provides process technology and a complete set of front-end and back-end design libraries, Huawei completes the front-end system, code design, synthesis, and simulation, and Fujitsu completes packaging design and test program development.
But there is no market for it because the price/performance ratio is not high and the performance does not have advantages. In a fully competitive market environment, there is no room for survival.
Currently, only Huawei's communication equipment is purchasing this communication chip in small quantities. In addition, we are also currently developing chips used for U-shield.
Huahong has never given up exploring the field of chip design since its establishment. However, the chips we designed can only be said to be usable. It lacks technical advantages and even less market-level advantages.
Xinxin Technology has a large number of mature engineers, outstanding talents and mature R&D mechanisms. They are more mature than us in all aspects.
Xinxin Technology can recruit people from Silicon Valley, Neon, Korea, etc. They can recruit people from all over the world and put their R&D centers in Silicon Valley, the Lion City, Tokyo, and London. We can't do that.
We can only recruit people from the Lion City and Wanwan area, and even now, we are facing poaching from the Lion City.
The Lion City has gathered more and more chip design companies. Last year, the Lion City established a special enterprise incubation center specifically for chip design.
The treatment in the Lion City is similar to that of America, and the overall cultural environment is similar to that in China. Many engineers who have returned from Silicon Valley choose to go to the Lion City after actually working.
Lack of funds, backward technology, and a disconnect between product thinking and market competition are all problems we face in reality. "
There are very few Chinese semiconductor companies that can offer engineers a monthly salary of 10,000 yuan like New Core. SMIC’s salary is only more than 3,000 yuan, including overtime pay, which is only 4,000 yuan.
The salary in Lion City is also 3,000 yuan, but the unit is lion yuan, which is equivalent to 15,000 yuan rmb.
SMIC alone has faced a poaching crisis in the Lion City since its establishment.
Not to mention Huahong, whose treatment is not as good as SMIC.
It is simply unrealistic to ask employees to create a value of 30 million yuan with a salary of 3,000 yuan.
The researchers asked: “Is there any way we can avoid this phenomenon?
I have heard that these domestic chip companies have a serious brain drain. They often train people for two or three years and then go abroad or join foreign companies.
Can we avoid similar risks by signing a non-competition agreement? "
A representative from Huahong smiled bitterly: “We have thought about it, but signing a non-competition agreement also requires increased costs. If you sign a non-competition agreement, you need to pay compensation for non-competition restrictions.
It is impossible for us to sign this agreement with every engineer. Unless they are technical personnel in key positions, we will sign a non-competition agreement with them.
This year, due to the overall bad environment in the chip industry, the phenomenon of poaching has improved.
For engineers, they think that going out to work is gold-plated, and it is easier to get promoted and get a salary increase when they come back.
For enterprises, the chip industry attaches great importance to work experience. Generally, it takes 2 to 3 years to master the work content. For example, engineers on the front line of chip manufacturing need to work 2 to 3 years to ensure a relatively high yield rate.
During these 2 to 3 years, it is actually a free training period.
Therefore, we are also exploring how to manage employees to avoid training one and poaching the other. "
Huahong representatives also know that the best and most effective way is to add money. There is no problem that cannot be solved by adding money.
None of the Huahong employees who were recruited by Xinxin wanted to leave.
The researcher then asked: “Has Huahong ever thought about benchmarking Xinxin Technology in chip design and learning from them?
For example, assign front-line R&D personnel to study at Xinxin Technology? Based on our good cooperative relationship with Xinxin Technology, it should be possible to send a few people to Xinxin Technology to study. "
The 6k promised yesterday, and 200 more words added today!
There are no pigeons today.
Even though we were able to retreat halfway through the fight last night, Crow, as a perennial political observer on the keyboard, could no longer understand what was going on.
(End of chapter)
