Reborn in 2011, 985 missing from two copies

Chapter 704: Nvidia is at a dead end, Lao Huang's swordsmanship fails

TSMC headquarters.

"Chairman, Nvidia called and asked us to immediately stop production and cancel all GTX 970 chip orders!"

Lao Zhang laughed: "He can cancel it if he wants to? How is that possible!"

"Tell Nvidia that the third batch of 200 million GTX 970 GPU chip orders have already been produced in large quantities and cannot be canceled."

"As for the fourth batch of 200 million GTX 970 GPU chip orders, production has not yet started and can be cancelled, but the materials have been ordered. According to the agreement, Nvidia will bear all the losses caused by the cancellation of the order!"

The subordinate was delighted: "Okay, Chairman, I will reply to them right away."

Lao Zhang nodded and complained, "I finally got a big order, but how can I cancel it easily? I'll have to pay a lot of money to cancel it!"

In fact, as early as the first day of the memory scandal, TSMC's CEO Zhang was keenly aware of the serious consequences and knew that Huang was going to cut orders, reduce production, or even stop production.

In response to this, TSMC not only did not choose to suspend or reduce production, but instead chose to speed up production and increase production lines!

It’s simple. The GTX 970 memory scandal was Nvidia’s business. What does it have to do with TSMC?
TSMC is only responsible for foundry work. Once the production line starts, it just needs to earn the foundry fees!

We don’t care whether these chips have memory problems or not, whether they fail or not, or whether Nvidia can sell them later!
That is all Mr. Huang’s business and has nothing to do with me, Zhang!
Nvidia was furious when it received TSMC's reply and quickly reported it to Huang:

"Chairman, TSMC is going too far. They said that the third batch of orders has already been produced, a full 200 ​​million pieces, and they can't stop production. The fourth batch of orders can be cancelled, but we have to pay liquidated damages!"

"Haha, this is really Zhang's style, adding insult to injury!"

Old Huang was so angry that he laughed.

"Then what should we do?" The subordinates were also at a loss.

Huang sighed and said, "We will continue to negotiate with TSMC. We really can't stop production of the third batch, so we can continue production. As for the fourth batch, we must cancel it and the penalty will not be paid."

"This is the bottom line!"

"If Lao Zhang doesn't agree, we will refuse to accept the third batch of orders and refuse to pay the balance!"

"Chairman, this..." The subordinate was shocked: "Will this lead to a complete fallout between us and TSMC?"

Old Huang waved his hands: "Haha, Old Zhang doesn't dare. If they really fall out, TSMC can't bear the loss. Especially next year, the chip orders will be snatched away by Xingyi Semiconductor and Samsung Semiconductor. If we lose our Nvidia chip orders, TSMC will have nothing to lose!"

"Besides, we have also started cooperating with Samsung this year, and some graphics card orders have been given to Samsung for OEM. If we really fall out, we can just work closely with Samsung and replace them!"

Other senior executives also spoke:
"Lao Zhang is just a scabby boy, he just wants to make more money, if you slap him twice, he will feel good."

"Haha, TSMC is not the problem. The key is how we deal with these problematic GPU chips next."

"Even if all orders for the fourth batch are cancelled, we still have 500 million GPU chip orders, of which 200 million have been sold to customers, 200 million have not yet been sold, and million are in TSMC warehouses and production lines."

"For the 200 million GPU chip orders that have already been sold, we do not accept returns, so we can let customers sell them slowly. Although the sales volume is very low now, we can always sell them."

“But we have to find a way to sell the remaining 300 million GPU chip orders!”

"That's the thing, but it's as difficult as climbing to the sky."

"Isn't it? Now the whole world knows that the GTX 970 memory scandal has failed. The GPU has a design flaw. Customers can't sell the graphics cards they have. Who will continue to buy our GPU chips?"

"It's hard to sell right now. I'm sure I'll lose money!"

"Hey, 300 million GPU chips, if each chip is sold at $250, that's $7.5 million, or 48 billion RMB!"

"So much money, all in my hands, oh, the loss is too great!"

The whole room was filled with high-rise buildings, all bleeding with heartache.

"That's not all. The problem now is not just the loss from the 300 million unsold GPU chips, but also the 200 million GPU chips that have already been sold will face a large number of returns! The loss will not be 48 billion, but much more."

"Yes, PC manufacturers have to return OEM graphics cards, graphics card manufacturers have to return GPU chips, and even public version consumers have to return them."

"These are all problems. If we deal with them, the losses will be immeasurable!"

"In addition, the subsequent sales of GTX 970 have also been cold, and the losses are incalculable."

Listening to everyone's words, Old Huang's face became extremely gloomy:

"So, we cannot accept returns. We cannot admit that the GTX 970 has a memory gate problem or a design flaw, otherwise we cannot afford the consequences of returns."

"All we can do now is to ignore it, not respond, and not acknowledge it."

"Wait until the storm is over and ship as soon as possible."

"At the same time, we will immediately start repairing the GTX 970 GPU chip, redesigning it, and re-taping it out."

"When the defective GPU chips are almost sold out, we will start mass production of non-defective GTX 970 GPU chips again and re-launch the perfect GTX 970 graphics card without defects!"

"Yes, this is the best solution at the moment."

"That's the only way."

"All returns, whether from major customers or consumers, will not be accepted or acknowledged."

"Don't even respond. Wait until you are forced to do so."

Old Huang nodded: "Time is the best way to solve all problems. People tend to forget things. Maybe in a month, the memory scandal will be over and this matter will be over. By then, the GTX 970 with memory defects can be sold at whatever price."

"The same goes for the graphics cards of our customers. Time can settle everything and make them calm!"

"Yes!"

Sure enough, no matter how big the video memory gate incident became, and no matter how many users sought redress and returned products, Nvidia seemed to be dead, refusing to admit it or respond, and acting like a dead pig that is not afraid of boiling water.

Seeing that the upstream GPU chip manufacturer Nvidia has started to tank, major graphics card manufacturers and e-commerce platforms have also started to tank.

In a word, if you can avoid retreating, don’t retreat.

After all, if the products are really returned, the platform will suffer a huge loss, and the graphics card manufacturer will suffer an even greater loss, and there will be no benefit to either party.

Such an arrogant attitude made netizens angry, but they could do nothing about it.

It is already difficult to deal with ordinary people when they start to act like scoundrels.

What’s more, it’s a big company that is playing rogue?
But netizens are not easy to mess with.

If you don’t give me a refund, I will give you a bad review and promote you everywhere!
As a result, the number of negative reviews of GTX 970 on major platforms has increased sharply, and the reason is that the video memory is defective and returns are not allowed!
Not only that, they also thoroughly explained the video memory issue in the review section to discourage other users who were about to buy the product.

Some netizens have posted on TikTok, Tieba, and other major forums, complaining and discouraging users who are planning to buy GTX 970, and recommending everyone to buy RTX 970!

Typically, if you don’t give me a return, I will shut down your stall and make it difficult for you to sell your goods!
The result is predictable. The GTX 970 was already at the center of controversy, and with the surge in negative reviews, its ratings dropped significantly, and its sales became even more dismal.

In the following days, the daily sales of GTX 970 from major brands were only a few hundred units.

Even with all these brands combined, their daily sales are only three to four thousand copies.

It can be said to be horrible!
The daily sales of RTX 970 are still soaring, maintaining between 7 and 10 units.

If this momentum continues, after the Xingyi RTX 970 sold 160 million copies in October, it is entirely possible that November will be another great month, with sales possibly exceeding 160 million copies, reaching 180 million copies, or even 200 million copies!

In a word, it all depends on the support of peers!
The success of GTX 970 makes RTX 970 the most powerful graphics card under three thousand.

It costs more than 2000 yuan less, but can achieve 980% of the performance of GTX 77, which makes the performance of Xingyi RTX 970 the most recognized, and the price-performance ratio is unbeatable!
So much so that everyone regards the Xingyi RTX 970 as a new generation of god U, a god card with both excellent cost performance and high performance!
As a result, the sales of Xingyi RTX 970 exploded!
Generally speaking, sales of graphics cards will definitely be discounted in the second month after they are on the market, and 30% off the first month's sales is normal.

Except for this kind of God U.

It is normal for the sales volume of a powerful U to be half to twice that of an ordinary graphics card.

Coupled with the side effect of the GTX 970 memory scandal and the terrifying traffic, the sales volume of the Xingyi RTX 970 cannot be speculated according to common sense.

Of course, there are also domestic high-end graphics cards with horrible subsidies, crushing Nvidia, and gaining support from the majority of Chinese people!

As a result, in November, just half a month, the sales of RTX 970 exceeded one million!
I can only say it’s horrible, very horrible!
The same hot-selling products include Xingyi laptops, desktops, and all-in-one computers! The poor sales of competitors is the failure of the entire industry.

The hot sales of Xingyi Technology are also hot sales in the entire industry!

The powerful performance and outstanding performance of the Xingyi RTX 970 have brought the public's recognition of the Xingyi CPU and Xingyi computers to an unprecedented level.

Even though this is only the first year that Xingyi Technology has been making CPUs, graphics cards, and computers!

But it doesn't matter anymore.

The graphics card scandals of giants like NVIDIA led to the success of the Xingyi graphics cards, Xingyi CPUs, and Xingyi computers!
But Wang Yi was not carried away by this victory. Instead, he convened a high-level meeting again and kept a close eye on the development of the situation.

And study in advance the various self-rescue strategies that Nvidia may come up with next, and develop targeted response plans!

There is no way. After several years of development, Xingyi mobile phone has become the world's number one brand, so Wang Yi does not need to worry too much.

But Xingyi Computer has just started, so Wang Yi has to pay close attention to it.

Yu Longxing, president of Xingyi Graphics Cards, is in a good mood:
"Chairman, our graphics card sales have not only returned to their peak, but have even gone one step further. We sold 100 million cards in just half a month!"

It was first released in October and sold one million graphics cards in just half a month, which is quite impressive.

By November, it would have been impossible to have such high sales.

After all, more than 160 million users purchased the RTX 970 in October, so there is not much potential purchasing power left in November.

But now, due to the failure of Nvidia GTX 970, RTX 970 has become popular again and become the best U of its generation, and its sales have skyrocketed!

"Very good, we will ship out the GTX 970 as soon as possible while it is failing! No matter how Nvidia reacts next, we will ship it quickly."

Wang Yi said: "If Nvidia does not admit that there is a problem with the GTX 970 and does not fix the GTX 970 video memory problem, and continues to go down this path, then this is naturally a good thing."

"In the next year or even two years, our Xingyi RTX 970 will be the main force and the monopoly of our GTX 970 will be the hot-selling period. Our Xingyi RTX 970 annual sales can definitely exceed million, or even more!"

Zhu Changlin echoed, "That's right. Nvidia's graphics cards are updated every two years or so. If the GTX 970 is not repaired, the GTX 2016 will not be released until 1070! Before that, even if the GTX 970 has a memory issue, our GTX 970 will still be a hot seller."

Graphics cards are not like CPUs. They are not updated every year. Instead, they are updated every 1.5 to two years.

Yu Longxing nodded: "That's the theory. But I don't think Nvidia will stick to it. They can't accept being suppressed by our Xingyi RTX 970 for the next two years. They will definitely find a way to reverse the disadvantage."

Everyone was thoughtful and said, "Yes, NVIDIA will definitely find a way to solve this problem, but no matter how it is handled, it will be difficult to solve."

"After all, it takes time to fix the chip architecture. Millions of defective GPU chips have been produced, and Nvidia must want to sell them all."

"That's right, this is our chance!" Wang Yi said:
"It will take time for Nvidia to fix the GPU chip architecture, and it will take time for the GPU to be re-taped and re-produced. This will take about four months."

“It will also take a lot of time for Nvidia to ship 300 million GPU chips with video memory defects.”

"As a result, it will take at least half a year for a full-blooded GTX 970 without the video memory issue to appear. By then, the sales of GTX 970 will increase, and the sales of our Xingyi RTX 970 will be affected again."

"Under this situation, we have a half-year monopoly period of hot sales."

"But this possibility is not very high. Three million failed graphics cards cannot be sold out in half a year."

Everyone nodded.

After the memory scandal broke out, GTX 970's daily sales dropped to to units, and monthly sales were at most a little over units.

Even if consumers lose their memory after a while and GTX 970's monthly sales double, it will still take more than a year to sell out the three million units!

If a perfect version is released half a year later, the failed ones will not be able to sell.

“那英伟达会不会降级销售？把2499-2999的GTX 970降到中端显卡，1799-2299起售？”有人开口道。

Wang Yi waved his hand: "It's unlikely."

"The cost of GTX 970 is very high, and there is not much room for price reduction."

"A GPU chip costs 1300 yuan, and 4G video memory costs 400 yuan. Add in the PCB + power supply, heat sink, packaging materials, etc., and the total cost is 2000-2400 yuan. If it is sold at 2499-2999, the total gross profit is only 20%. After deducting the distribution profit, the gross profit of the graphics card manufacturer is only 10%-15%! There is not much room for price reduction."

"Will Nvidia be forced to drastically reduce the factory price of GPU chips?" someone else asked.

Wang Yi continued to wave his hand: "It's unlikely. Although the material cost of the GTX 970 GPU chip is not much, plus the packaging, the total cost is only 300 yuan, but we still have to consider the diluted R&D cost."

"Without the memory scandal, GTX 970 is selling like hot cakes. We can easily sell million units in two or three years. The diluted R&D costs are very low and the profits are considerable."

"But now the GTX 970 memory scandal has caused a sharp drop in sales. In the next two or three years, sales may only be to million. The sales have plummeted, and the diluted R&D costs have increased significantly, so profits are low."

"It's difficult for Nvidia to lower prices."

"The most important thing is that the GTX 970 memory scandal has caused a big fuss. A small price cut will be useless. Once the price is reduced to 1799-2299, the sales of GTX 970 will increase significantly, but how will the subsequent GTX 960 and 950 be sold?"

“The product line is going to be messed up!”

Everyone nodded:

"Yes, early next year, NVIDIA will also launch the GTX 960. The 2GB memory version is expected to be priced at 1399-1499, and the 4GB memory version is expected to be priced at 1699-1899. Once the price of GTX 970 drops, it will definitely impact GTX 960!"

"So, doesn't that mean Nvidia has nowhere to go?"

"Of course not." Wang Yi said:

"Another possibility is that Nvidia will give up on retail channels and repairing retail graphics cards. It will reduce the price of the 300 million GPU chips that are currently affected by the memory scandal by or yuan and sell them all to graphics card manufacturers as non-public retail graphics cards, which will then be sold slowly through retail channels."

"And we take the repaired and upgraded GPU chips and make them into OEM customized graphics cards and sell them to computer manufacturers!"

Hearing this, Yu Longxing's eyes lit up: "This is very likely, and it's also the best solution."

"Three million failed GPU chips must be sold. OEMs can't take them all. Nvidia can only bite the bullet and slowly sell them to graphics card manufacturers. If they can't sell them in one year, then they will sell them in two, or even three years!"

"Anyway, there is no retail version of the GTX 970 that won't fail on the market, so consumers can only bite the bullet and buy it."

"If OEM graphics cards continue to use the failed GPU chips, customers such as Lenovo and HP will definitely turn against them and cancel their orders, even if they have to pay liquidated damages. Nvidia can only repair the video memory controller and launch GTX 970 OEM graphics cards that do not fail to deliver to customers such as Lenovo, HP, and Dell."

"Then the market will be split into two parts, and both the non-official and official versions of the retail distribution channels will have problems with the video memory issue."

"Subsequent OEM versions are all perfectly repaired versions and will not conflict with each other."

"Yes, this possibility is very high."

"In this case, doesn't it mean that our Xingyi RTX 970 will be almost invincible in the retail market in the next two years? The failed GTX 970 is no match for us at all!"

"That depends on whether the GTX 960 is powerful enough. If the GTX 960 has good performance and a low price, and is very cost-effective, and becomes a top-notch processor, the sales of our RTX 970 will also be affected."

"Yes, the 1499-1899 graphics cards are the mainstream sales."

"I think Huang will do this, especially since the GTX 970 is a failure and the sales are dismal. Huang urgently needs the GTX 960 to stand out and beat our RTX 970."

Song Sining, who was in the video conference, didn't think so. "Similarly, if the GTX 960 has a very high cost-performance ratio and sales explode, and everyone buys the GTX 960, then how can Huang sell the three million GTX 970s that failed?"

"Yes, once the GTX 960 becomes a hot seller, it will impact not only our Xingyi RTX 970, but also their own GTX 970 retail version that has a memory issue!"

"So, in order to clear the three million failed chips, Huang did not dare to make the GTX 960 too powerful!"

For a moment, everyone laughed.

Nvidia is now in a difficult situation and is caught in a dilemma.

Either the GTX 960 is powerful and hot-selling, or three million failed GTX 960 GPU chips are sitting in warehouses.

Either the three million failed GTX 970 GPU chips are successfully cleared out of stock, or the GTX 960 performance is poor and sales are dismal.

It’s hard to choose either way.

As for the compromise and how to grasp that degree, it depends on Lao Huang's knife skills.

However, the emergence of RTX 970 has pushed Nvidia into a dead end!
I’m afraid that the knife skills that Lao Huang is so proud of are no longer useful!
(End of this chapter)