Reborn in 2011, 985 missing from two copies

Chapter 343: A big deal, a strategy to break the billion mark with a thousand-yuan phone!
Once Xingyi Semiconductor becomes bigger, major first-tier cities will inevitably do everything they can to rush to introduce Xingyi Semiconductor.

Not only will they provide factories and land like the imperial capital, but they will also offer various preferential policies.

There is no way. Building a wafer factory costs too much money, currently 200 billion.

Forty billion or even fifty billion in a few years!
If all major cities were rushing to offer land, factories and preferential policies, Wang Yi would only be responsible for providing equipment and technology, and the pressure would be much less.

However, the prerequisite is that Xingyi Semiconductor can grow bigger and stronger and mass-produce advanced processes.

At least surpass SMIC!
The resources in first-tier cities are also limited, and they will give priority to investing in leading mainland companies, allowing them to become stronger and compete with TSMC, Intel, and Samsung Semiconductor.

Instead, they would invest in the mainland's perennial second-place winner and let that perennial second-place winner catch up with the mainland's leading company.

After all, it doesn’t make much sense for the second-largest company to catch up with the leading company in the mainland, as it is still far behind the international giants.

Therefore, only if Xingyi Semiconductor surpasses SMIC and becomes the leader of mainland semiconductors can it obtain the most resource support, have better development, and catch up with the Big Three!

As for SMIC, which has been surpassed, it is likely to become a low-end 40-nanometer foundry.

It took many years before 28 nanometers could be mass-produced, and that was it.

A group of people who only know how to fight for power and have no ability to change their fate!
Especially with the more outstanding Xingyi Semiconductor, the strategic significance and status of SMIC in the previous life will be replaced by Xingyi Semiconductor, thus declining significantly!

Director Qin didn't say these things, but Wang Yi saw through them all.

Since SMIC is in a hopeless situation, Wang Yi will take over and devote all his efforts to building Xingyi Semiconductor into a high-end company.

However, the low-end 40-nanometer orders can be given to SMIC in the future, which can be regarded as supporting SMIC.

After all, Xingyi Semiconductor’s own wafer fab has limited production capacity. Once the 28nm process is successfully mass-produced, it will be used first to produce advanced 28nm and higher processes in the future!

There is no need for the low-end 40-nanometer process to occupy the 12-inch advanced production line. It would be better to outsource it to SMIC.

As for the current mass production of 40 nanometers, it is only because it will take another one or two years to break through 28 nanometers.

Wang Yi had planned all of this.

When we returned to Xingyi Technology Park, it was already seven o'clock in the afternoon.

"Chairman, you're back?" Old Hu was waiting eagerly.

Wang Yi was a little surprised: "You haven't finished get off work yet?"

"Haha, it's okay. It's normal for the semiconductor department to work overtime." Mr. Hu said with a smile.

He had no intention of going back because he didn't know the outcome of the negotiations.

Wang Yi smiled slightly: "Fortunately, we have fulfilled our mission and worked overtime to rush the completion. The first wafer fab building will be delivered next month. Although it is not large, with a monthly production capacity of only 5000 wafers, it is enough!"

"5000 wafers? That's already great, and it's perfect for a research and development plant!"

Mr. Hu was overjoyed.

Wang Yi showed Mr. Hu the wafer fab information he brought back from Director Qin:
"The entire wafer fab is divided into several parts, mainly three major plants. The first small plant has a monthly production capacity of 5,000 wafers. We are working hard to speed up the production and it will be delivered in April."

"The second large plant has a monthly production capacity of 10,000 pieces and will be delivered in August."

"The third large plant also has a monthly production capacity of 10,000 pieces, and it's almost November!"

"Okay, no problem!" Mr. Hu's eyes lit up. "The first small factory will be delivered in April. We will need three or four months to introduce the equipment and debug it. In this way, we can start trial production in July or August. If everything goes well, once the trial production is successful, we can start mass production of 40 nanometers by the end of the year. If the trial production fails, we can make adjustments and start mass production of 40 nanometers in the first half of next year!"

"Very good!" Wang Yi was in a good mood. Forty nanometers have been achieved through self-research, and there is also a promising future for self-production.

"Mr. Hu, I'll leave these materials to you. Also, here are the contact information of the chief engineer and relevant persons in charge of the wafer factory construction. Please arrange for someone to contact them and discuss the handover and equipment move-in next month."

Mr. Hu was delighted and took the information solemnly: "Don't worry, Mr. Wang, I will personally bring people there tomorrow!"

Although it is only the first wafer fab of Xingyi Semiconductor, it starts with the most advanced 12-inch wafer, which Mr. Hu thinks is very rare.

"Okay!" Wang Yi nodded.

If nothing unexpected happens, this wafer fab will be able to fully mass-produce 40-nanometer wafers next year, with a monthly production capacity of 2.5 wafers.

Low-end chips such as the fast charging chip C1 are relatively simple, and more than a thousand C1 chips can be cut from a wafer.

The monthly production capacity is 2.5 wafers, or 2500 million C1 chips.

That’s 3 million pieces a year.

By then, there will be 1 million P1 power management chips, C1 fast charging chips, and H smart home chips each.

If the production capacity is insufficient, TSMC can continue to do the foundry work.

As for the second wafer factory, it will be delivered around the end of 2013 or the beginning of 2014.

Once the 28-nanometer process is successfully developed, it can be used to mass-produce 28-nanometer mobile phone chips.

The 28-nanometer mobile phone chips are more advanced and complex, with many times more transistors, so the number of chips cut out is even smaller, estimated to be only 600-800 pieces.

Wang Yi remembered the Kirin 990 in its previous life, which was 7 nanometers, and could only cut about 640 slices from a wafer.

Taking into account the yield rate and removing the inferior chips, there are only more than 500 pieces!
However, once the 40-nanometer process is successfully mass-produced, Xingyi Semiconductor will have caught up with SMIC and will have completely established itself.

By then, Wang Yi will have more say, and the second wafer factory given by the Imperial Capital will be larger in scale and have greater production capacity.

For example, the monthly production capacity can be as high as 30,000 wafers or even 40,000 wafers!

In this way, more than 28 million -nanometer high-end chips can be produced annually.

Xingyi mobile phones, Xingyi tablets, and Xingyi TVs, all added together, are enough, and even if they are not used, some production capacity can be allocated to other products.

By then, a 12-inch 40-nanometer wafer fab for making low-end chips and a 12-inch 28-nanometer wafer fab for making high-end chips will be sufficient for the time being.

Once the 22nm process is successfully mass-produced next year, the 40nm wafer fab can fully upgrade to the 22nm process. As for the outdated 40nm chip orders, they can be given to SMIC.

Wang Yi had planned all of this.

Next up is waiting!

Wait until April for the first factory to be delivered!
Wait until August for 40nm trial production!

By the end of the year, the entire 12-inch wafer factory will be fully delivered!
By next year, with the 40nm process, the yield rate will soar and it will be put into full mass production!
The future is promising!
Wang Yi was in a good mood, but then he thought of an important question: "Mr. Hu, the 40-nanometer process is not difficult for us, right?"

Mr. Hu waved his hand and said, "It's not difficult. By the end of this year, we will ensure that 40 nanometers are successfully mass-produced! At the same time, we will start the research and development of 28 nanometers and catch up with the three semiconductor giants!"

"Is 28-nanometer research and development very difficult?" Wang Yi said meaningfully.

Mr. Hu nodded. "For 40 nanometers, there is no pressure to develop and mass produce them within a year. But 28 nanometers is one of the most advanced processes at present. It will take a year to develop and mass produce it. At least one and a half years for mass production."

Wang Yi had an idea: "In that case, can we recruit more people and divide them into two groups? One group will continue to develop the 40-nanometer process, and the other group will start developing the 28-nanometer process now. In this way, we will be able to mass produce 28-nanometer by the end of next year!"

Wang Yi knew that TSMC had two R&D teams and two generations of process technology, which were being advanced simultaneously.

For example, right now, a team is working on 22 nanometers.

And another team is already working on 20 nanometers!
This is especially true for Xingyi Semiconductor, which started late.

"This..." Mr. Hu thought for a while and said, "This is feasible, but it requires more manpower and a large investment!"

Wang Yi waved his hand: "Money is not a problem. Now we are behind, and we need to use money to buy time! Just go ahead and do it, I will take care of the funding. If you need anything, just find Jian Ziyan directly. The entire Xingyi Technology will fully cooperate with Xingyi Semiconductor!"

"Okay, okay!" Mr. Hu was in a good mood. "Since Mr. Wang said so, I will split into two groups and work on 40 nanometers and 28 nanometers together. We will strive to mass produce 40 nanometers by the end of this year and 28 nanometers by the end of next year!"

"Director Wang, I'll get ready right away!"

"Good work!"

Looking at Mr. Hu's slightly hunched back, Wang Yi had a complicated expression.

Mr. Hu was born in 1947 and is already 65 years old this year!

But there is no other way. Xingyi Semiconductor needs to develop and needs big names, so we can only let Mr. Hu work hard until his death...

In fact, Mr. Hu and Mr. Liang are very similar. They both come from technical and scientific research backgrounds. They are not good at bullying the weak and will not say anything they are not sure about.

But Mr. Jiang is different. He is good at mediating power and is deeply loved by Morris Chang...

But Wang Yi is not optimistic about this kind of people, and still appreciates the practical people like Mr. Hu and Mr. Liang!
Mr. Hu said that 2012-nanometer chips will be put into mass production by the end of 40, and 2013-nanometer chips will be put into mass production by the end of 28. That’s almost certain!

By then, the 2014 Xingyi mobile phone will be able to use the self-developed and produced 28nm processor.

However, in 2014, Qualcomm's processors were all 20 nanometers, still two generations ahead of Xingyi Semiconductor.

But when Wang Yi thought about the fact that Qualcomm's first 20nm processor was the Snapdragon 810, he felt no pressure.

The famous Snapdragon 810 is so awesome that it almost wiped out several half-dead international brands!

"With Mr. Hu, Xingyi Semiconductor has a promising future!" Wang Yi was in a good mood.

Next year, Xingyi mobile phones, Xingyi tablets, and Xingyi TVs will all be able to use self-developed and self-produced processors.

The next day, Mr. Hu personally took people to the wafer factory.

Wang Yi sat in the office and began to carefully plan the thousand-yuan phone!
The price of a thousand-yuan phone is there, and the cost has to be reduced. It is impossible to use a 300-yuan Qualcomm processor.

In 2013, the first generation of Redmi developed by Lei Jun failed.

It was not until February 2014 that Xiaomi successfully launched the Redmi 2S, which was also the first successful Redmi phone.

It is equipped with MediaTek's low-end quad-core processor and Qualcomm's low-end quad-core processor Snapdragon 400. Both are 28nm process and are low-end SOCs with integrated baseband.

Wang Yi's thousand-yuan phone will most likely be released in mid-2013, half a year earlier than the previous Redmi.

However, in order to control costs and support the development of the domestic industrial chain, thousand-yuan mobile phones mostly use domestic components.

However, domestic component suppliers are just starting out and developing, and many aspects are still immature.

The previous generation of Redmi failed because some of its components were not good enough, and 50 million yuan of R&D funds were lost.

Similarly, Wang Yi’s thousand-yuan phone will face similar problems.

The construction of an industrial chain requires a development process; rushing into it will only lead to complete failure.

Therefore, the research and development cycle of the first thousand-yuan phone is almost catching up with that of the flagship phone.

Various problems in the industrial chain of domestic components must be solved one by one.

Otherwise, they will have to follow the footsteps of the first generation of Redmi. Moreover, Wang Yi will not hand over the development of the thousand-yuan phone to Zhu Changlin's department.

They are developing Xingyi mobile phones, and only produce high-end ones.

The thousand-yuan phone is a brand-new brand, located in Jeju, and a brand-new department is created from scratch.

Two product lines, two positionings, completely different.

Xingyi mobile phones can be high-cost, high-quality, and highly innovative, aiming to give consumers the best mobile phones, even regardless of cost.

For a thousand yuan phone, the first thing to do is to control costs!
Simply put, for Xingyi mobile phones, you can use whatever is good, and for thousand-yuan phones, you can use whatever is cheap and does not affect normal use!
There is nothing we can do about this.

It seems that when I return to Jeju in a few days, I will have to talk to Song Si Ning about the thousand-dollar phone.

The thousand-yuan phone will be released in the middle of next year, so we have to start recruiting people, doing research and development, and promoting industrial chain negotiations now.

As for the choice of processor, it is also a big problem.

Next year’s Qualcomm mobile phone processors will all be SOCs with integrated baseband, and the selling price will be the total price of the processor + baseband.

For example, Qualcomm’s high-end chip Snapdragon 800 will cost around 300 yuan next year.

Compared to Qualcomm's flagship processor that costs more than a thousand dollars many years later, this price is considered cheap.

Of course, most of the current domestic mobile phones only cost 2000 yuan, not yuan many years later.

As for next year's mid-range processor Snapdragon 600, it will cost around 200!

The low-end processor Snapdragon 400, used in thousand-yuan phones, costs around 150 yuan.

Nvidia's processor is cheap, but it doesn't have a baseband. Plus, the price of the baseband is not even as cheap as Qualcomm's 400.

As for MediaTek's processor, it will be cheaper than Qualcomm's and can be bought for just over $100.

The material cost + marketing and diluted R&D costs of current flagship mobile phones must be controlled below 1500.

As for the material cost of a thousand-yuan phone, it must be controlled at around 500 yuan!
For example, the material cost of the Redmi 1S in its previous life was 520 yuan, plus the diluted R&D cost, taxes, marketing cost, and after-sales cost, it was sold for 799 yuan, and the company could make a profit of about yuan per unit.

As for the claim that the net profit is only 5%, that is just a lie for fools.

Even the first generation of Xiaomi, which cost 1999, had a profit of around 500, which is about a 25% profit margin!

The same is true for thousand-yuan phones.

For Xingyi Technology’s thousand-yuan phone, the material cost must be controlled at around 500 yuan.

Adding taxes, diluted R&D costs, marketing, after-sales, etc., the total cost is nearly 600, the selling price is 999, and the profit per unit is yuan.

Although the profits cannot be compared with those of the Xingyi flagship phone, the sales volume is sure to be a huge success.

In 2013, when smartphones started at two thousand yuan, Wang Yi's thousand-yuan smartphone had no rivals at all. It was cheaper than many feature phones and copycat phones. As long as the production capacity was sufficient, million units could be sold a year!

Make 400 per machine, 400 billion per year!
Small profits but quick turnover, that's how scary it is.

Of course, the most important thing is the user scale behind it and seizing the market!
The cost of a thousand-yuan phone should be controlled at around 500 yuan, and the screen costs 130 yuan to 150 yuan.

After all, even though it is a thousand-yuan phone, it will have a high-resolution screen of 720P next year. Even if it is an AUO or Tianma screen, it will be at least around 130.

Processor module, MediaTek 105, Qualcomm 150!

Memory + storage chip, using the cheapest 1g RAM + 8g rom, also costs around 80.

The shell + metal button costs 50 yuan. The shell + plastic button costs 40 yuan.

The remaining lens module, touch module, battery, etc. are 270.

Calculating this way, if we use the lowest plan, the total cost will be at least 625.

It’s completely exceeded the standard!
There is no way. In 2013, the domestic mobile phone industry chain was not developed enough, and the cost was 2014%-10% higher than in 20.

因此红米1S在2014年能做到物料成本520元，可在2013年，王逸就得花625元了！

If you want to further reduce costs, you have to switch to self-developed low-end chips.

The material cost of the chip is very low.

The key is that the R&D cost is high and the OEM production line cost is high!

As long as sales go up, the diluted R&D costs and production line costs will also be low.

If the scale reaches hundreds of millions, then all the diluted costs can be kept extremely low, and even with the OEM fee and material cost, it will only be a few dozen yuan.

The current cost pricing strategy in the semiconductor industry is mostly 8:20.

That is, when the cost is 8, the price is 20 yuan.

For example, this is the case with MediaTek.

But for powerful semiconductor giants like Qualcomm and Intel, it is not 8:20, but 8:32!

For example, Qualcomm's quad-core flagship SOC Snapdragon 800 next year will be priced at around 300 yuan, and the cost of a single chip is only 75 yuan.

The low-end processor Snapdragon 400 is priced at 150 yuan, and the cost of a single chip is at most 38 yuan.

Similarly, if Wang Yi develops a low-end chip by himself, the cost can be reduced to around 5000 as long as the sales volume reaches 40 million.

If the sales volume reaches hundreds of millions, the cost can be reduced to around 30!

In 2013, if the production capacity is sufficient, it will be no problem for the annual sales of smartphones priced at RMB to exceed million.

Qualcomm chip costs 150 yuan, MediaTek chip costs 105 yuan, and self-developed chip costs 30 yuan!
In this way, the total cost of the thousand-yuan phone can be further reduced to 550 yuan!
If we sell it for 999, we will make a profit of 450 yuan per unit, which is quite considerable.

As for the research and development of chips for thousand-yuan phones, that is also easy. Just castrate this year's Kunpeng 700.

By reducing the main frequency and downgrading the configuration, it will become Kunpeng 500, which will be taped out together with Kunpeng 700.

Or we can first tape out the low-end Kunpeng 500. With the successful experience of 500, Kunpeng 700 will be more promising.

However, there are also two types of research and development plans for low-end chips for thousand-yuan phones.

A 28-nanometer product, manufactured by TSMC, costs 30 yuan.

The other type is 40 nanometers. Xingyi Wafer Factory will produce 40 nanometers by the end of the year, so the cost will be even lower.

28 nanometers is much cheaper than 20 nanometers, and it is self-produced, saving the foundry fee. The total cost is estimated to be only yuan!
Moreover, Snapdragon 400 will not be released until the fourth quarter of next year, and mobile phones equipped with Snapdragon 400 will not be available until the year after next.

Kunpeng 500 will be available at the beginning of next year, one year ahead of schedule. Even a 40-nanometer process will be enough!
At worst, the main frequency can be reduced a little, and the performance may not be worse than Snapdragon 400!
After all, this year's NVIDIA quad-core processor Tegra 3 is 40 nanometers, and next year Wang Yi's thousand-yuan machine will use Kunpeng 500, which is also a 40 nanometer quad-core processor, which is enough!
After all, for a thousand-yuan machine, cost comes first!
This is totally doable.

The 500-nanometer process will be ready for mass production by the end of the year, and by then we will be able to handle the tape-out of Kunpeng ourselves.

As for the fact that there are too many chips and it is difficult to develop them?

This does not exist.

After all, Kunpeng 700, Kunpeng 500, and next year's Kunpeng 900 are actually the same chip and the same architecture. The only difference is the main frequency, and the difference between external baseband and integrated baseband.

To put it bluntly, Kunpeng 700 is the standard version with external baseband, 500 is the castrated version with external baseband, and 900 is the upgraded version with integrated baseband!

They are all modified from a set of chips!
Moreover, with the successful trial production of 40nm in the second half of the year, there is no need to look to TSMC for the tape-out of Kunpeng 500, it can be done directly at Xingyi Wafer Factory!

That's even easier!
Wang Yi has made up his mind that since the sales of thousand-yuan phones will be huge next year, the chips must be developed and produced by ourselves.

Thinking of this, Wang Yi went to the chip department again and found Williams.

"William, I have good news for you."

"What good news?" Williams became interested.

Wang Yi smiled slightly: "Our first wafer fab will be able to deliver the first plant next month. By then, Mr. Hu and his team will immediately introduce equipment and use it as a research and development factory. We will strive to trial produce 40-nanometer technology in August. If all goes well, we will be able to mass-produce 40-nanometer technology by the end of the year!"

Williams was overjoyed: "We can mass produce 40 nanometers by the end of the year? With Mr. Hu's strength, there will be absolutely no problem! This is really good news, great!"

Wang Yi changed the subject: "There is another good news."

"What?" Williams became interested.

Wang Yi said with a smile: "Next year we will launch a 500 yuan smartphone, with the cost kept at around 999 yuan and the selling price at yuan. We will aim for an annual sales volume of million yuan!"

"Oh my god!" Williams was full of disbelief: "What kind of idea is this? It's incredible."

"Cost of 500 yuan, smartphone worth 1,000 yuan, sales of hundreds of millions!"

Williams couldn't help but stand up: "Director Wang, wait, let me think about it!"

"Once successful, that would be 400 billion in profits!"

"Crazy, so crazy!"

“And it’s actually feasible!”

"With this phone, the sales of Xingyi phones will exceed 1.5 million next year! Sweeping the world!"

"By then, the number of Xingyi mobile phone users will reach an extremely terrifying scale."

"The meaning behind this is so huge!"

Williams had a lot on his mind in an instant.

The profit of a thousand-yuan phone is only 400 yuan. He knows clearly that Wang Yi is not doing this for the 400 yuan.

On the contrary, it is for hundreds of millions of smartphone users!

Wang Yi smiled knowingly: "If the cost is to be controlled within 500 yuan, then a 40-nanometer low-end quad-core processor is needed!"

Williams' eyes lit up, and he instantly understood what Wang Yi meant: "Chairman, this is easy. It's just a low-end processor, it doesn't need to be too powerful, it's very easy."

Williams found a plan and said, "Chairman, this is the Kunpeng 700 we have designed so far, but it is not perfect yet and needs further adjustments."

"But if we cut off some parts of it, lower the main frequency, and change it to 40 nanometer process, it won't be a problem to use it as a low-end processor."

王逸点点头：“我也是这个意思。手机芯片直接做两个版本，一个28纳米版的旗舰芯片鲲鹏700，再阉割出来一个40纳米的低端芯片鲲鹏500。等下半年40纳米制程试产成功，就可以进行鲲鹏500的流片！”

“No problem!” Williams responded decisively: “With the experience of Kunpeng 500, we can also better develop Kunpeng 700 and even Kunpeng 900!”

(End of this chapter)