The Millennium Semiconductor Survival Guide.

Chapter 280 Three Ways

When Hu Zhengming and Guan Jianying both worked in Silicon Valley in the past, Hu Zhengming could mobilize no more social resources than Guan Jianying.The reason why Hu Zhengming knows so many bosses is because of the professor's professional characteristics.

If hexagons are used to measure the different attributes of the profession of teaching, the attribute of influence will be particularly long.

Hu Zhengming: "This is because UMC has a chance of defeating TSMC only when it comes to the mainland. It is almost impossible for them to surpass TSMC because of their continuous development."

Guan Jianying thought it’s no wonder that the potential of the mainland is recognized. The biggest advantages are the vast market, stable and low-cost water and electricity supply, and a large number of laborers with sufficient basic education. These are the elements needed for the development of the chip industry.

The only flaw in the mainland is the Wassenaar Agreement, but the chip industry not only has advanced manufacturing processes, but also has many aspects that can be developed in the mainland, even if the manufacturing process is a generation behind.

Guan Jianying shook his head: "Cao Xingcheng's thinking is simple. If he wants to surpass TSMC, he must cooperate more closely with Intel. TSMC's biggest partner is Intel."

Hu Zhengming said helplessly: "Then I think it's better to come to the mainland, and want to break the cooperative relationship between TSMC and Intel for more than ten years. Breaking this balance is far more difficult than making a career in the mainland's chip industry.

Without us, it is entirely possible for UMC's mobile phone integrated chips to unify the mainland's mobile phone market, and their revenue can exceed that of the mainland. "

Guan Jianying thought for a while and smiled: "Sometimes you don't have to rely on your own development to surpass your competitors.

It doesn't necessarily depend on your rate of ascent, it can also depend on the rate of your competitors' decline. "

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 grabbed two big orders from TSMC. First, Infineon's DRAM foundry was snatched by SMIC, and then Texas Instruments' 90nm chip foundry was also snatched by SMIC. How much is TSMC? It feels like a thorn in my 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 bought Shida Semiconductor at a price five times higher than the market price, it can also be seen how much Zhang Zhongmou feared Zhang Rujing.I always have a feeling that he thinks Zhang Rujing is a bigger 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."

"Old Zhang believes that only idealists can cross the cycle and become a strong player in the field of chip foundry. Businessmen who only value short-term interests may be able to achieve temporary success, but the chip industry is a long-distance race."

I have to say that Zhang Zhongmou is very accurate. SMIC under the management of Zhang Rujing is not only ruthless to its opponents, but also to itself. The semiconductor market after 2000 was originally difficult to do because of the bursting of the Nasdaq bubble. During the down cycle, demand The end used various reasons to lower the price, the chip could not be sold at a price, and the chip foundry was also bleak.

Under such a premise, SMIC can continue to lower prices, which is to order orders without considering profits at all.

You must know that under the premise of the new core, SMIC is far from getting as much support as the original time and space. Zhang Rujing is well-known in the industry and it depends on who he compares with. Zhou Xin, who is rich and powerful, and Hu Zhengming, who is full of professionalism Compared with the entrepreneurial portfolio, SMIC is not attractive in Huaguo.

SMIC can only rely on Zhang Rujing's personal relationship and a small amount of official capital. Zhang Rujing has the courage to sink the boat.

Guan Jianying said: "Zhang Rujing is really ruthless, if I were in his position, I would definitely not be able to make up my mind, when will I be able to pay back my capital.

In fact, the Huaguo market is very large. Although the global chip industry is at a trough, the Huaguo market is a rare bright spot. Both foreign trade and domestic demand have strong demand for chips.

Judging from our internal statistics, in terms of amount, the chips produced in Huaguo only account for 12.00% of the total demand. In terms of quantity, this figure will be higher, [-]%.

In fact, SMIC does not need to fight like this at all, and there is still room for survival. Compared with Shenhai Belling, Hua Hong, Huajing, and Grace Semiconductor, SMIC's technology still has merits. "

If there is no Xinxin Technology, the main shareholders of SMIC are Zhangjiang Hi-Tech, Yanda Jade Bird Huanyu and Shenhai Industrial from Shenhai, with Shenhai City's capital as the main shareholder.

The current major shareholder of SMIC is also Shenhai, but these companies have been replaced by Shenhai Jiaotong University, an investment platform affiliated to the MH District, and a state-owned enterprise in the Yangtze River Delta region.

The original major shareholder, Zhangjiang Hi-Tech, resold it to the 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 low-end market, build a sales team with sufficient scale, and sell products to local companies in Huaguo.

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: "That's right, Shenhai Belling, Grace Semiconductor and even Hua Hong NEC have all adopted this plan. This is actually relatively safe, and it can achieve profit and loss balance as soon as possible, giving investors confidence."

For a chip foundry company, it is only on the right track to achieve breakeven, and it will be much easier to follow-up, whether it is valuation or continued financing.

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 production 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.

"Secondly, they need to spend a lot of effort to maintain different customers, because the chips you produce are low-end chips, and the customers are found by the sales team, whether it is the stability of the other party's company or the stability of your cooperative relationship. These companies have the risk of bankruptcy or reduced demand due to poor management, and the risk of being snatched away by other chip manufacturers.

So the seemingly stable is not so stable.

The third is that the most important thing is that there will be a lack of motivation to follow up with cutting-edge technologies, because their needs may not change for several years. They have always asked for chips with a 0.18 or even 0.25 micron process, and you can satisfy them by doing this. Will you pursue more advanced technology when the demand arises?Obviously not, because it is thankless, it will form path dependence, and then gradually lose competitiveness.

So it seems to be safe, but it is actually risky. "

This is also why the chip foundry companies in Huaguo in the future have only the short and tall ones in SMIC, which can barely sell, and the others are either insufficient in scale or insufficient in technology, which is determined by their initial business strategy.

Guan Jianying seemed to remember 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 that many companies in the chip field died because they lived too comfortably, ignored industry changes, and were finally eliminated by technological progress. "

"Yes, I also know many similar cases, so for Zhang Rujing's strategic planning, the demand side he chose is mainly large enterprises 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, it all proves this logic. "Hu Zhengming said.

Hu Zhengming concluded: "It is precisely because of the cooperation with these companies that SMIC has a certain reputation in the minds of chip design companies.

For example, Hua Hong 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. At first, they found TSMC as an OEM. Large-scale mass production has begun to find SMIC.

This strategic line does not need to put too much energy on sales. According to my understanding and understanding, 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 said with a smile: "Because we are rich and powerful, we can open up several fronts at the same time, so we are taking the third road.

And we are the only ones who have walked this path. "

Hu Zhengming is very proud, because he constructed this set of strategies, which fully utilized the advantages of Xinxin Technology: rich money and good reputation.

After the success of Xiaomi Electronics, Huaguo state-owned media summarized the success of Xinxin Technology and wrote:

"Xinxin Technology has two pillars of the semiconductor industry and the consumer electronics industry at the same time. Among them, Xiaomi Computer, a representative product of the consumer electronics industry, has cut down more than 20.00% of the market share of Huaguo's personal PC in just half a year. The new one is another hit.

For Zhou Xin, success is as easy as weeds on the roadside, but this time the success is still different, because the success of Xinxin Technology has gradually shown the benchmarking of Sony, Samsung, Toshiba, Nikon and other semiconductor and consumer products. The demeanor of giants in the two major fields of electronics.

However, unlike several other giants who first started with personal electronic products and then gradually developed to the upstream of the industrial chain, Xinxin Technology is one of the few companies that first develops the upstream industrial chain and then develops personal electronic products.

Xinxin Technology first has the 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: "Precisely because our current chip foundry business is almost meeting our internal needs, we don't actually 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 sell millions of chip orders. This is the trust in the stability of our product quality. It is very helpless that I have no way to repay this trust, because our production capacity is limited, and we even own internal production capacity. Demand cannot be met.

We even have to give a lot of orders to other chip foundries, where there is capacity to take orders from other companies.

What I mean by this is that I hope you can calm down. We are developing very well. For the B-series chips, it is more important to do it slowly than to do it quickly. "

Hu Zhengming and Guan Jianying discussed the future development strategy of Xinxin Technology in Zhangjiang. At this time, the video of Zhou Xin participating in the Charlie Ross show was widely circulated, and both the video version and the written version can be easily found on the Internet.

Among them, what everyone pays most attention to is the opportunities of the mobile Internet. Whether entrepreneurs or ordinary people, everyone is very concerned.

The myth of creating wealth in the Internet age is still vivid. Now that the upgraded version of the Internet, the mobile Internet, has come, how to follow the trend and become a pig on the wind is a question that everyone is curious about.

This also caused a large number of start-up companies in Silicon Valley to chat with venture capital institutions for a while, and they kept their mouths shut:

"We are a company focused on the mobile Internet."

"Sir, can you tell me exactly what you do?"

"We mainly provide services for users of Mphone, iphone, Sony Ericsson, Motorola and other smart phones. Our applications have been released on the above platforms, and the number of customers is currently growing rapidly."

Investors think that it sounds like it has great potential. Now everyone is making smart phone applications, and there are not many companies that can release applications on these major platforms at the same time. First, because of the review mechanism, they have to queue for a long time. They released an explanation At least I have been doing this for a period of time. Second, being able to release so many platforms at the same time, the technical specifications between the 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 high rate of [-]% every month."

　I wish everyone a happy Qixi Festival, and the crows have not forgotten the codes on Qixi Festival, so it is not too much to ask for a monthly ticket!
　　
　
(End of this chapter)