In the past, when Hu Zhengming and Guan Jianying were both working in Silicon Valley, Hu Zhengming was not able to mobilize more social resources than Guan Jianying. The reason why Hu Zhengming knows many big people is because of the professional characteristics of professors.
If the different attributes of the profession of professor are measured using a hexagon, the attribute of influence will be particularly long.
Hu Zhengming: "This is because UMC can only have a chance to defeat TSMC by coming to the mainland. They have been developing in a meandering way and it is almost impossible to surpass TSMC."
No wonder, Guan Jianying thought. Mainland China's potential is recognized. Its biggest advantages are its vast market, stable and low-cost water and electricity supply, and a large number of labor forces with sufficient basic education. These are all elements needed for the development of the chip industry.
The only flaw in the mainland is the Wassenaar Agreement, but the chip industry is not just about advanced processes. There are many aspects that can be developed in the mainland. Even processes that are one generation behind have great potential.
Guan Jianying shook his head: "Cao Xingcheng thinks simply. If he wants to surpass TSMC, he must have closer cooperation with Intel. TSMC's largest partner is Intel."
Hu Zhengming said helplessly: "Then I think it is better to come to the mainland and break the more than ten-year cooperative relationship between TSMC and Intel. Breaking this balance is far more difficult than making a career in the mainland's chip industry.
Without us, UMC's integrated mobile phone chips would have been entirely possible to unify the mainland's mobile phone market, and their revenue would have surpassed that of the mainland alone. "
Guan Jianying thought for a while and smiled: "Sometimes you don't have to rely on how well you develop to surpass your competitors.
It doesn’t necessarily depend on how fast you rise, it can also depend on how fast your competitors fall. "
Hu Zhengming knew what the other party meant. He nodded and said, "That's right. SMIC has put too much pressure on TSMC. If it weren't for SMIC's rapid development in the past three years, TSMC would not have joined forces with electricians."
Hu Zhengming continued: "This year, SMIC has snatched two big orders from TSMC. First, Infineon's DRAM foundry was snatched away by SMIC, and then Texas Instruments' 90nm chip foundry was also snatched away by SMIC. How much is TSMC's? It feels like a thorn in the back.”
Guan Jianying agreed: "Zhang Rujing is indeed very courageous. No wonder Zhang Zhongmou has always regarded Zhang Rujing as a thorn in his side.
When TSMC purchased Shida Semiconductor at a price five times higher than the market price, it can also be seen how afraid Zhang Zhongmou was of Zhang Rujing. I always have a feeling that he thinks Zhang Rujing is a greater threat than UMC. "
"This is because compared with Zhang Rujing, Cao Xingcheng is a pure businessman. Businessmen in this field are the easiest to deal with. They value short-term interests too much, which makes it difficult for them to have the determination to expand against the trend." Hu Zhengming explained: " Zhang Rujing is a purer idealist, similar to Lao Zhang to some extent."
"Lao Zhang believes that only idealists can transcend cycles and become strong players in the chip foundry field. Businessmen who only value short-term interests may achieve temporary success, but the chip industry is a long-term race."
I have to say that Zhang Zhongmou saw it very accurately. SMIC, run by Zhang Rujing, was not only ruthless to its opponents, but even more ruthless to itself. Two thousand years later, the semiconductor market was already difficult to do because of the bursting of the Nasdaq bubble. Demand in the down cycle Duan uses various reasons to lower prices, chips cannot be sold at high prices, and chip foundry is also in a bleak situation.
Under such a premise, SMIC can continue to lower prices because it is placing orders without considering profits at all.
You must know that under the premise of Xinxin, SMIC is far from getting as much support as the original time and space. Zhang Rujing is famous in the industry and it depends on who he can compete with. With Xinxin’s wealthy Zhou Xin and professional Hu Zhengming, the pair Compared with the entrepreneurial portfolio, SMIC is not attractive in China.
SMIC can only rely on Zhang Rujing's personal connections and a small amount of official capital, and Zhang Rujing has the courage to burn everything.
Guan Jianying said: "Zhang Rujing is really ruthless. If I were in his position, I definitely wouldn't be able to make this determination. How long will it take for me to get my money back?"
In fact, the Chinese market is very large. Although the global chip industry is at a low ebb, the Chinese market is a rare bright spot. There is a strong demand for chips in both foreign trade and domestic demand.
Judging from our internal statistics, in terms of amount, the chips produced in China only account for 3% of the total demand. In terms of quantity, this number is higher, 12%.
In fact, SMIC doesn’t have to work so hard at all, and there is still room for survival. Compared with Shenhai Beiling, Huahong, Huajing, and Grace Semiconductor, SMIC’s technology still has merits. "
Without Xinxin Technology, SMIC's main shareholders are Zhangjiang Hi-Tech, Yanda Jade Bird Huanyu and Shenhai Industrial from Shenhai, with Shenhai City Capital as the main shareholder.
The current major shareholders of SMIC are also Shenhai, but they have been replaced by Shenhai Jiaotong University, MH District investment platform and a state-owned enterprise in the Yangtze River Delta region.
The original major shareholder, Zhangjiang Hi-Tech, was sold to a school-run enterprise of Jiaotong University at the original price.
Hu Zhengming said: "These are two strategic directions. The solution you mentioned is to focus on the mid-to-low-end market, build a sales team of sufficient scale, and sell products to local Chinese companies.
Their demand for chips is not that high, and SMIC's mainstream 0.18 micron and 0.25 micron processes can fully meet their needs. "
Guan Jianying nodded: "Yes, Shenhai Beiling, Grace Semiconductor and even Huahong NEC have all adopted this plan. This is actually more secure and can achieve breakeven as soon as possible, giving investors confidence."
Achieving breakeven is considered to be on the right track for a chip foundry company, and subsequent valuation and continued financing will be much easier.
Hu Zhengming said: "Yes, the first way is very simple. Most Chinese companies do this. They introduce production lines that are one to two generations behind from abroad, and then find demanders to sell the products to them to achieve breakeven. .
There will be several problems with this. First of all, your revenue depends on the sales team, and there is no obvious advantage in terms of yield rate and price. Then your core competitiveness is the company's sales ability, which means that you completely rely on the sales team.
For a chip manufacturing company, the core competitiveness lies in the sales team, so the resources and support for R&D are destined to be very limited. "
As an example here, you can refer to Xiaomi. A company whose core competitiveness is in supply chain management, its research and development is destined to become a shortcoming. The same is true for Lenovo.
"The second is that they need to make great efforts to maintain different customers, because the chips you produce are mid- to low-end chips, and the customers are found by the sales team, whether it is the stability of the other company or the stability of the cooperative relationship between you. These companies are at risk of bankruptcy or reduced demand due to poor management, and there is a risk of being snatched away by other chip manufacturers.
So what seems to be stable is actually not that stable.
Third, the most important thing is that there will be a lack of motivation to follow up on cutting-edge technology, because the needs of such demanders may not change for several years. They have always required chips with 0.18 or even 0.25 micron processes. You can satisfy them by doing this. If the demand is met, will you pursue more advanced technology? Obviously not, because it is thankless and will form path dependence, and then gradually lose competitiveness.
So what seems safe is actually risky. "
This is also why among the chip foundry companies in China in later generations, only SMIC is the taller among the short ones, and can barely handle it. The others are either insufficient in scale or lacking in technology. This is determined by their original business strategy.
Guan Jianying seemed to have remembered something. As an industry veteran, he could understand what Hu Zhengming described, "You are right, there are indeed risks in this regard.
When we were in Silicon Valley, we saw many companies in the chip field die from being too comfortable, ignoring industry changes and eventually being eliminated by technological advancements. "
“Yes, I know many similar cases, so for Zhang Rujing’s strategic planning, the demand parties he chose were mainly large companies such as Texas Instruments, Infineon, and Qualcomm.
What they can provide is not only orders, but also technically helping SMIC optimize their production processes. In order to maintain a long-term and stable cooperative relationship, these giants will force SMIC to make technological progress.
Whether it is Infineon transferring more advanced chip production lines to SMIC, or Texas Instruments handing over the second half of the 90-nanometer process to SMIC, this logic is proven. "Hu Zhengming said.
Hu Zhengming concluded: “It is precisely because of cooperation with these companies that SMIC has a certain reputation in the minds of chip design companies.
Companies like Huahong NEC, Huajing, Shenhai Belling, and Grace Semiconductor mainly make memory chips, and few make logic chips. Only SMIC has the ability to mass-produce logic chips.
I also talked with the bosses of some chip design companies in Zhangjiang Park. They initially turned to TSMC for OEM work. TSMC was expensive. Later, they started to turn to SMIC for tape-out. Finally, they turned to TSMC for large-scale mass production. Now they are even Large-scale mass production is beginning to turn to SMIC.
This strategic route does not need to focus too much on sales. According to my understanding and knowledge, this is in line with the long-term development of chip production enterprises. "
Guan Jianying nodded and said, "We are taking the third path."
Hu Zhengming smiled and said: “Because we have deep pockets and can open up several fronts at the same time, we are taking the third path.
And we are the only ones who have walked this path. "
Hu Zhengming is very proud because he built this strategy, which fully leverages the advantages of Xinxin Technology: money and good reputation.
After the success of Xiaomi Electronics, Chinese state-owned media summarized the success of Xinxin Technology and wrote:
"Xinxin Technology has two pillars, the semiconductor industry and the consumer electronics industry. Among them, Xiaomi Computer, a representative product of the consumer electronics industry, has captured more than 20% of China's personal PC market share in just six months. There is no doubt that Proving Zhou Xin another success.
Success is as easy to come by as weeds on the roadside for Zhou Xin, but this success is still different, because the success of Xinxin Technology has gradually shown that it can compete with Sony, Samsung, Toshiba, and Nikon across the semiconductor and consumer industries. The style of giants in the two major fields of electronics.
However, unlike other giants that start with personal electronic products and then gradually develop upstream of the industry chain, Xinxin Technology is one of the few that first develops the upstream industry chain and then develops personal electronic products.
Xinxin Technology first has more upstream industry chain links such as chip foundry, chip design and even chip equipment, and then designs personal computers and mobile phones."
Hu Zhengming said: “It is precisely because our current chip foundry business is almost all meeting our internal needs, so we actually don’t have much to worry about.
When I talked with the bosses of chip design companies in Zhangjiang Park, they generally said that they wanted to come to Xinxin Technology for tape-out and mass production because they believed in Xinxin Technology’s technical strength.
There are many companies that can place millions of chip orders. This is a trust in the quality and stability of our products. Unfortunately, I cannot repay this trust because our production capacity is limited. We can’t even increase our own internal production capacity. The needs cannot be met.
We even have to place a lot of orders to other chip foundry companies, and wherever there is the production capacity, we can take orders from other companies.
What I mean by saying this is that I hope you can calm down. We are developing very well. For B-series chips, it is more important to take your time and do it well than to do it quickly. "
Hu Zhengming and Guan Jianying were discussing the future development strategy of Xinxin Technology in Zhangjiang. At this time, the video of Zhou Xin participating in the Charlie Rose Show was widely circulated, and both the video version and the text version can be easily found on the Internet.
Among them, what attracts the most attention is what are the opportunities of the mobile Internet. Whether entrepreneurs or ordinary people, everyone is very concerned about it.
The myth of wealth creation in the Internet era is still vivid in our minds. Now that the upgraded version of the Internet, the mobile Internet, has arrived, how can we follow the trend and become a pig in the spotlight? This is a question that everyone is curious about.
This also resulted in a large number of startups in Silicon Valley talking to venture capital institutions for a while, and they kept saying:
"We are a company focused on mobile Internet."
"Sir, can you tell me exactly what you do?"
"We mainly provide services for users of different smartphones such as Mphone, iPhone, Sony Ericsson, and Motorola. Our applications have been released on the above platforms, and the number of customers is currently growing rapidly."
Investors think it sounds like it has great potential. Now everyone is making smartphone applications. There are not many companies that can release applications on these major platforms at the same time. First, because of the review mechanism, there will be long queues. They issued a description At least it has been doing this for a while. Secondly, it can release so many platforms at the same time. The technical specifications between platforms are different, which proves that this company still has technical strength.
"Sounds good, how many customers do you have?"
"Our customers are growing at a rapid rate of 100% every month."
I wish everyone a happy Chinese Valentine's Day. The crow didn't forget to code the Chinese Valentine's Day. Please don't ask for a monthly ticket too much!
(End of chapter)
