Reborn in 2011, 985 missing from two copies

Chapter 571: The hero grieves and strikes back at TSMC

"It's okay, we still have one last trick!"

Wang Yi took a deep breath and spoke calmly: "Have you checked the existing inventory of 40-nanometer chips and the inventory of related model components?"

"Everything has been checked out. Here are the results." Zhu Changlin handed a document to Wang Yi.

Wang Yi looked at it carefully, and then said:
"The situation has developed to this point, which is the worst possible outcome. We have to make a choice."

"There must be no problems with orders from third-party customers. They must be supplied on time. We should get rid of this part of the production capacity first."

"Fortunately, the 1.5 million 40-nanometer chips for customers were delivered starting at the end of December and were all delivered in six months, 12 million per month."

"That is to say, from December to May next year, our monthly 12-nanometer production capacity is 5 million, and we have to give 40 million to third-party customers."

"Excluding these production capacities, there are still 500 million units left each month to produce the 40-nanometer chips we need! But this is definitely not enough."

Everyone nodded, 500 million a month was too much of a difference.

The first generation of Unlimited alone is not enough.

The monthly sales of the first generation of Unbounded are now 1500 million, and even in December it will be over 12 million.

Wang Yi continued: "Fortunately, we still have 1000 million 40-nanometer chips in stock. Fortunately, TSMC can still produce 3000 million 40-nanometer chips in the last month. Fortunately, in November, we can produce another 11 million 3000-nanometer chips without having to give them to third parties."

"This is all the chips we have for our own use, all the 40-nanometer chips, 7000 million in total."

"But it's still not enough. If we continue with the current model, we will only be able to last until December at most, and then all the inventory will be used up."

"By January, there were only 500 million 40-nanometer chips left, which was not enough, not even enough for the first generation of Unbounded."

Everyone's faces became solemn; the gap was too big.

If TSMC's monthly foundry capacity of 2000 million chips is added to its own monthly production capacity of 3000 million chips, the total number of 5000-nanometer chips per month will be 40 million, which is more than enough.

But now, without TSMC's 2000 million chips, there is a gap of 2000 million chips.

There is still a gap of 2000 million pieces every month!
Wang Yi sighed: "There is no other way. No other way will work, and we cannot delay the delivery of orders from third-party customers."

"That's the only last resort!"

"We will cut off most of the 40-nanometer product lines ahead of schedule and upgrade to 28-nanometer production. This will allow us to supply the limited 40-nanometer chip production capacity to a small number of 40-nanometer products!"

Zhu Changlin sighed: "This is the last resort. Instead of stopping production due to a 40-nanometer chip shortage, it is better to take the initiative and fully upgrade to a new 28-nanometer product!"

Wang Yi nodded: "Yes, that's right. Next, cut off the product line!"

"First, the Xingyi Tablet 1, Xingyi Tablet 1 Pro, and Xingyi Tablet 1 Ultra all use 40-nanometer chips. After the last components are used up, all of them will be discontinued to clear the inventory on Double Eleven. At the same time, the 28-nanometer Xingyi Tablet 2 and Xingyi Tablet 2 Pro will be released. This will reduce the consumption of a large number of 40-nanometer chips and achieve a perfect upgrade of the Xingyi Tablet 2."

"Second, the 40nm chip-based Xingyi TV X40, X50, X55, and X60 will all be discontinued after the last components are used up to clear the inventory. Next month, the 28nm Xingyi TV 2nd generation will be released, and all series, except the X40, will be 4K versions."

"The second generation of the Unbounded TV is still under development, the first generation will not be discontinued for the time being and will continue to be sold!"

Xu Mingyi agrees very much: "Once the second-generation 4K version of Xingyi TV is launched, the first-generation Xingyi TV, which has been on the market for a year and a half, will definitely have a big price cut. Instead of lowering the price and affecting the brand image, it is better to stop production directly and focus on selling the second generation! After all, there is still the borderless TV to support the mid- and low-end."

"In addition, the complete suspension of production of Xingyi tablets and Xingyi TVs will save tens of millions of 40-nanometer chips every month! This will greatly alleviate the pressure of chip shortages."

"That's good, but it's not enough. Next is the mobile phone part." Wang Yi continued.

“手机部分，是要换芯升级吗？把xphone 2、xphone 2pro的40纳米芯片鲲鹏702，全部换芯升级成鲲鹏706？”朱长林问道。

Wang Yi waved his hand: "Instead of upgrading the core, we will directly launch new products and new series!"

"It's not only troublesome to upgrade the chip, but also we can't reduce the price significantly. However, if we don't reduce the price significantly, the sales volume will not be good. After all, they are all old products, and they are inferior to new products in all aspects. Instead of doing this, it is better to stop production of the old models and directly launch new products."

"For example, the sales of Xphone 1 Pro and Xphone 2 are declining. Instead of continuing to cut prices, it is better to stop production directly after the last components are used up to reduce the consumption of Kunpeng 700 and Kunpeng 702."

"At the same time, we launched new 28nm products, the Unbounded Note series and the Unbounded S series, to fill the gap!"

"For example, we have already made the motherboard chipset of Kunpeng 505, and it is about to be successfully developed. We can directly launch a new 505G phone with Kunpeng 4 as the Unbounded Note!"

"As for the upcoming mass production of the Unbounded Note 706 and Unbounded Note 1 Pro equipped with the Kunpeng 1 SOC, they will be renamed the Unbounded S series!"

"From now on, the Wujie digital series will focus on thousand-yuan phones, priced below 1499 yuan."

"Unbounded Note series, positioned as mid-range, 1499-2499."

"Boundless S series, high-end, 2499-3999!"

"Xingyi mobile phone, 4000-8000!"

"In the future, there will be no Xingyi mobile phone models priced below 4,000 yuan, maintaining its high-end pedigree."

"Even if the price of an old model drops to around 4000, we would rather stop production than continue to lower the price. Below 4000 is the market for borderless phones!"

"Next, Xphone 1 Pro and Xphone 2 will run out of stock components and will be completely stopped. The stock will be cleared on Double Eleven. At the same time, new phones will be released, the Unlimited S1 and Unlimited S1 Pro."

"The Wujie Note 706 equipped with Kunpeng 1 is renamed Wujie S1, without fingerprint, 10W fast charging, single Tianlai M1 HIFI chip, 2G + 16G, starting from 2999."

"The Wujie Note 1 Pro with fingerprint scanner is renamed Wujie S1 Pro, with fingerprint scanner, 20W fast charging, dual Tianlai M1 HIFI chips, 2G + 16G, starting from 3999."

These two models are the two motherboard chipset designs of Kunpeng 706 SOC.

It was originally the Unbounded Note series, but now because the 3G models have been discontinued in advance, it has to be upgraded to the S series!

With the starting prices of 2999 and 3999, the Unbounded S1 and Unbounded S1 pro will replace the market vacated by the discontinuation of xphone 1 pro and xphone 2!

"As for the new phone equipped with Kunpeng 505, it is named Wujie Note 1, starting at 1499, and is an entry-level 4G phone!"

"Develop it as quickly as possible and try to launch the Unbounded Note 1 after New Year's Day."

“等到明年下半年，鲲鹏505下放给无界2代，鲲鹏508下放给无界note 2。鲲鹏902下放给无界 S2和S2 pro！”

"Even if the 40nm 3G phones Xphone 1 Pro and Xphone 2 are discontinued, there are still two 1G phones, the Ultramarine S1 and Ultramarine S4 Pro, to replace them. In January next year, there is also the Ultramarine Note, which is enough."

"All other 40-nanometer mobile phones, TVs, and tablets will be discontinued, and only the top-end Xphone 2 Pro, the most popular 1st generation Ultrawide, and Ultrawide TV will be retained."

"In this way, our 40-nanometer products and chips will be sufficient!"

"At least it will last until March next year."

"In March next year, the Xphone 2 Pro, whose sales have been declining, will also be discontinued, and the Xingyi X1 and X1 Pro will be released."

"The 40-nanometer Boundless TV has also been discontinued and upgraded to the 28-nanometer Boundless TV 2nd generation. This will further reduce the consumption of 40-nanometer chips."

"By then, only one 1nm phone, the Ultrasurf 40, will be on sale, which will be enough to last until June."

"After the orders from third-party customers are delivered in June, there will be no pressure on the production capacity of 6-nanometer chips. At that time, we can resume some 40-nanometer product lines depending on the situation."

Everyone nodded.

Zhu Changlin said, "This is the best arrangement. Although it is a bit regrettable to cut off most of the 40-nanometer product lines in advance, it can reduce the consumption of our own 40-nanometer chips to a minimum. With the support of inventory chips, it is enough to guarantee third-party delivery, survive the current crisis, and realize 4G transformation in advance!"

George also said: "4G will be launched in China at the end of the year, so it is undoubtedly the best and most timely to switch to 4G now."

"And we have plenty of 28-nanometer production capacity. Next month, our 28-nanometer capacity will increase again. Our total 28-nanometer capacity will be as high as 9000 million pieces per month, or 10.8 billion pieces per year. After delivering 3 million third-party customer orders, we will have more than enough for our own use, or even more."

Wang Yi looked around at everyone and said: "The transformation process may be painful and tedious, and all aspects need to be adjusted. But as long as we get through the next two months of transformation pain, we will be greeted by infinite light, the infinite light of full 4G and full 28nm!"

"Do you have confidence?"

"Yes!" everyone answered in unison.

"Very good!" Wang Yi nodded with satisfaction: "The next two months will be a critical period for transformation and also a critical period for cutting product lines. All departments must be vigilant, go all out, and coordinate everything. We must minimize the losses."

“Don’t remove a product line and find that there are a lot of unused components that are wasted. That would be stupid!”

"Don't use up all the components, or the after-sales department will have no spare parts for the repaired products! These must be calculated clearly."

"If we cut product lines, there will definitely be losses, but what we can do is to minimize the losses!"

"Each department will set up a special operations team to jointly promote the transformation and reduce losses!"

"Yes!"

Everyone responded one after another.

Afterwards, a series of coordination meetings were held, with everyone performing their respective duties.

For each product series, how many components are in stock, how many products will be produced, and when will they be discontinued...

How many components are left? Give them to the after-sales department...

Everything has to be calculated clearly in order to proceed perfectly.

As for the remaining inventory chips that cannot be digested after certain products are discontinued, it doesn’t matter. They can be directly delivered to third-party customers.

Third-party customers have placed orders for four 3G chips.

Deliver the inventory first, and if there is not enough, mass produce according to the gap.

The remaining production capacity will be used to produce Kunpeng 702 for xphone 2pro and Kunpeng 500 for unicorn 1.

The reason why xphone 2 pro is not discontinued is simply because it is too new. It has only been on the market for 7 months and it is still selling well.

"Chairman, won't the Xphone 2 Pro have its chip replaced? Upgraded to the Kunpeng 706 SOC?" Zhu Changlin couldn't help but ask.

Wang Yi shook his head. "No, there won't be enough time. The Xphone 2 Pro needs to be adjusted with a new chip, and we need to make a prototype and test it. It will take at least two months. There won't be enough time."

"The prototypes of the Unbounded S1 and S 1pro have been completed. With a new name, they can be put into mass production immediately and will be available on the market next month."

"Secondly, once the Xphone 2 Pro is upgraded to 706 chips, the sales volume will not explode at the price of 4999. If it is reduced to 4499, a price reduction of 7 in 1000 months is too fast, which will affect the high-end positioning and brand image of Xingyi mobile phone."

"Instead of doing that, it's better to make the Wujie S1 pro and compete in a different market." "Third, in March after the new year, there are still Xingyi X1 and Xingyi X1 pro. If the Xphone 2 Pro doesn't upgrade its chip, there will be no shortage of 4G flagship phones."

Zhu Changlin suddenly realized: "That's right. If we start changing the chip now, it will be launched after New Year's Day. It's too close to launch Xingyi X1 in March. It's really unnecessary. On the contrary, Wujie S1 and S1pro can be released in November!"

"Besides, as a high-end product, it is not convenient to reduce the price too quickly for Xingyi mobile phones. However, it doesn't matter for Wujie mobile phones. They are mainly mid-to-low-end products. In the later stage, they will reduce the price when necessary and start a price war when necessary according to market conditions. It will not affect Xingyi Technology."

This is another consideration of Wang Yi.

The borderless mobile phone is a sharp knife!

Zhu Changlin said, then changed the subject: "But this time, we were badly screwed by TSMC. Originally, these products were to be discontinued next year. But now, at the end of this month and the beginning of next month, they will have to be discontinued one after another, three or four months ahead of schedule."

"The situation is stronger than us, but it doesn't matter. We are experiencing some pain now, but after the full transformation to 4G and the full upgrade to 28nm, our products will be more competitive and can completely kill our competitors' Qualcomm chip products, thus causing a sharp drop in Qualcomm chip shipments!"

Wang Yi smiled and said: "For example, once the Xingyi TV 2nd generation and Xingyi tablet are upgraded to 28 nanometers and equipped with tablet and TV dedicated chips, the cost will not increase, but the performance will be greatly improved, and the sales volume will also soar."

"As a result, products of rival companies using Qualcomm chips will be impacted and thus unsalable."

"Once the products of other companies are unsalable, Qualcomm's chips will also be unsalable. This is a chain reaction!"

"All Qualcomm accounts are recorded and settled one by one."

"And TSMC, this backstabbing must also be avenged!"

Not avenging a grudge is not a gentleman!
"That's right, we have to take revenge. This time, we were tricked by Qualcomm and TSMC. Damn it!"

Zhang Chao, who has always been of high quality, started to curse: "But how to report it is a problem."

Wang Yi smiled and said, "It's simple. Just grab TSMC's customers and orders."

"Go to Huawei, offer a foundry price more affordable than TSMC, and win Huawei's chip orders!"

The previous K3v2 was manufactured by TSMC, but its performance was poor.

However, the Kirin 910, which is about to be released, is beginning to rise.

Next year, Kirin 920, Kirin 925 and Kirin 928 will be launched all at once!

In the past, these chips were all manufactured by TSMC.

But this time, Wang Yi was stabbed in the back by TSMC, so he won’t be polite!
"Tell Huawei that we have sufficient 28nm production capacity at Xingyi Semiconductor. We will give them as much as they want. We also offer discounts for wafer production, and we can guarantee that no matter what problems arise at any time, we will not stop manufacturing like TSMC did!"

"The reason we are confident is that our Xingyi Semiconductor's technology is all self-developed and not controlled by Xiaomi!"

Zhang Chao's eyes lit up: "Good idea. We can't get chip orders from Apple and Qualcomm, but it is entirely possible to get chip orders from Huawei! Especially since our M2 packaging and testing plant in Shanghai has also been delivered and will be put into production next month. By then, we will provide one-stop services for chip mass production, chip packaging and testing, and directly deliver them to Huawei's major factories and foundries."

"Take Huawei's Kirin chip order and teach TSMC a lesson!" Wang Yi said calmly, "The price can be lower than TSMC's. It doesn't matter if we make less profit. The main purpose is to make TSMC uncomfortable!"

"Do you really think we are so easy to bully?" Wang Yi said coldly.

"Okay, I'll arrange someone to go there right away. No, I'll go there myself!" Zhang Chao said with a smile.

Wang Yi nodded. What followed was a painful transformation period of cutting product lines and also a period of comprehensive product upgrades.

Zhu Changlin and George are both busy.

There is no better person to entrust the task of winning the Huawei order to than Zhang Chao.

Once this wave is over, it will be time for Xingyi Technology to fight back!
Winning Huawei's chip foundry order and defeating TSMC is a revenge against TSMC's backstab.

Next, the Thunder will also have to take action on Qualcomm's side.

It is not Wang Yi's style to not fight back after being beaten.

But how to better and more continuously attack Qualcomm?
This matter still needs to be planned slowly.

Afterwards, all departments of Xingyi Technology began to operate at a rapid speed.

Each product and each component is being counted.

Orders that should be cancelled were cancelled, and products that should be discontinued were discontinued. All product lines entered the discontinuation period one after another.

For example, the xphone 1 pro was discontinued after a week to clear out the inventory.

Xphone will also be discontinued at the end of February.

In fact, since the release of xphone 3 and xphone 3 plus, the sales of xphone 2 pro have dropped a lot, with monthly sales falling below million units.

There is no way. The price difference between xphone 2pro and xphone 3 is only 700 yuan, but the configurations are very different, and there is also a gap between 4G and 3G.

Everyone started buying xphone 3 and xphone 3 plus, so the sales of xphone 2 pro naturally dropped sharply.

As for the sales of xphone 1 pro and xphone 2, the drop was even greater, with monthly sales of less than five million units.

It is only natural to discontinue production to make way for the Ultramarine S1 and Ultramarine S1 pro.

For example, the xphone 2 has outdated configuration and it is a 3G phone. Even if it was reduced to 3999 on Double Eleven, it wouldn’t sell well. It would be better to launch the S3999 pro with borderless design for 1!

The sales volume of the wifi S2999, priced from 1 yuan, and the wifi S3999 pro, priced from 1 yuan, are higher than those of the xphone 1 pro and xphone 2, and the profits are not much different, so they can definitely make more.

Qualcomm's containment and suppression is a challenge, a threat, and an opportunity for Xingyi Technology!
If the other party had not pushed Wang Yi into a desperate situation, it would have been difficult for Wang Yi to cut off so many product lines so simply and transform to 28nm and 4G ahead of schedule!

All I can say is that transformation will cause short-term pain, but in the long run it will be a very good thing!

"Chairman, we also need to appease BYD." Zhu Changlin couldn't help but speak.

"Yes, Lao Zhu, you are very thoughtful."

Wang Yi almost forgot about it. "There are so many products that will be discontinued, most of which are manufactured by BYD. Even Shopkeeper Wang is confused."

"Yeah, Shopkeeper Wang probably thought something had happened!"

"In this way, we will produce the Wujie S1 pro ourselves, and outsource the Wujie S1 to BYD to make up for the gap caused by the suspension of production. Both products are hot-selling products, especially when the Xphone 1 Pro and Xphone 2 are discontinued, they will definitely be hot sellers."

"Okay!" Zhu Changlin responded.

Two days later, George approached Wang Yi with the contract:
"Chairman, SMIC has come to negotiate with us again and said that they do not intend to sell the wafer fab, but they are willing to cooperate, but the terms of cooperation are a bit high."

"According to their plan, they provided the factory, we provided the 40-nanometer technology, trained the employees, and guaranteed the orders. In the first two years, the profit was split 82%, SMIC 8%, and we 2%. Two years later, the profit was split 91%, and they 9..."

"..."

Wang Yi was so angry that he laughed and didn't know what to say.

Wang Yi was not surprised at all that SMIC raised its prices.

Before, it was SMIC that begged Wang Yi to develop 40nm technology, and now it is Wang Yi that begged SMIC to build a chip factory.

Now that the host and the guest have switched places, SMIC will naturally raise the price and take the opportunity to gain benefits.

What's more, Wang Yi had previously proposed cutting subsidies to semiconductor companies and investing in research and development in areas such as lithography machines, which is a good thing from a big picture perspective.

But it also damaged the interests of some semiconductor companies, such as its own Star Semiconductor and SMIC!
Now the other party is taking the opportunity to raise the price, and there is also suspicion that it is seeking revenge.

"Chairman, how should we respond regarding the cooperation?" George asked.

"Cooperation? Cooperation for what? We have already cut off so many 40-nanometer products and fully upgraded to 28-nanometer products. We no longer need 40-nanometer wafer fabs, and they are still raising prices? Let them raise the prices slowly!"

Having said that, Wang Yi threw the contract directly into the trash can.

Wang Yi was very optimistic about SMIC and even planned to invest in it to help it grow.

But the current situation in SMIC and the struggle for power made Wang Yi very troubled and he completely lost interest.

It is for this reason that Wang Yi changed from not building a wafer factory in the beginning, investing in and supporting SMIC, to building his own Xingyi wafer factory!

They were all forced!

But it turns out that this path is completely correct.

It is better to rely on yourself than to rely on heaven and earth!
Especially for core businesses like chips, if you want to avoid being blocked, it is best to keep it in your own hands!

Qualcomm headquarters.

The high-level meeting was held again, but the atmosphere was much more harmonious:

Franz Quentin smiled and said, "Chairman, good news. The strategy of containing Xingyi Technology has been fully successful. TSMC will stop manufacturing on the 17th of next month. By then, Xingyi Technology will have a shortage of 2000 million 40-nanometer chips. It all depends on what Wang Yi decides, hahahaha!"

"A shortage of 2000 million chips? This time it's Wang Yi's turn to be in trouble!" Jacob laughed. "Haha, I'm just curious about how they will choose? To protect their customers, or themselves?"

"Protect the reputation or protect the interests?"

Others were also beaming with joy, saying, “I think they will cut their own orders.”

“That’s going to take a lot of work, right?”

"That's for sure. Without TSMC's foundry, Xingyi Semiconductor's 40nm monthly production capacity is only 3000 million pieces, and third parties can only supply 1.5 million pieces. Six months of supply means 2500 million pieces a month. Xingyi Semiconductor's remaining production capacity is 500 million, which is not enough. It relies entirely on inventory chips, but how long can it last?"

"Xingyi Technology is in big trouble!"

"I estimate they will cut 90 percent of their product lines."

"Their first generation of Unlimited sold 1 million copies a month. They might have to stop production soon. Hahaha!"

“还有xphone 1pro、xphone 2、xphone 2pro、星逸电视X40、X50、X55、X60，无界电视，星逸平板，那么多产品都是40纳米芯片，该不会都得砍掉吧？”

"So many product lines, all cut off! It's so sad! I feel so sorry for them, hahahaha!"

(End of this chapter)