Rebirth 08: Rise from copycat phones

Chapter 329 The World is Too Small to Hold Two Families
After October, various mobile phone manufacturers have released their new mobile phones one after another. There are two major manufacturers, Weiku Electronics and Sixing, whose annual sales of mobile phones exceed 200 million units.

There are also a large number of second-tier mobile phone manufacturers with annual sales of tens of millions of units. Many of them took advantage of the fact that the popularity of Zhiyun and Fruit's new models in August and September had passed and the market was not so cruel, and launched new models one after another.

Their large-scale release and sale of new mobile phones once again led to a significant increase in the revenue of Zhiyun Group's semiconductor business and supply chain industries such as screens.

After all, among these newly released mobile phone models, quite a number of them use the W series SOC under Zhiyun Semiconductor, and many also use the memory and flash memory under Zhiyun Storage, but the manufacturers use the screens of Huaxing Technology, which is controlled by Zhiyun Group.

Among them, the W806 chip, which has received relatively high attention and is relatively familiar to the public, has ushered in a new peak in shipments!
Currently on the market, there are quite a lot of mid-to-high-end mobile phones that use this chip.

For example, the Little Blue MAX series under Vicoo Electronics mainly includes MAX7 and MAX7 Pro; there are also Vicoo K130 and K130PLUS of the Vicoo brand, which have similar positioning but much smaller influence.

Then there is the Galaxy S6 series and Galaxy Note5 under the Samsung brand.

There is also the rice 4S that everyone is more familiar with.

In addition to these models that are more familiar to ordinary people, a large number of high-end models of mobile phone manufacturers also use the W806 chip, such as LG, Sharp, and Motorola, which has been acquired by Lianxiang. Except for Huawei, the high-end flagship models of domestic manufacturers are all equipped with the W806 chip.

This year can be said to be a key year for Zhiyun Semiconductor's W series chips to truly gain a foothold in the high-end market and achieve huge success.

It’s not because the W806 is so good, but because the Snapdragon 810 promoted by Qualcomm in the same year was too bad.

Sometimes business competition doesn’t require you to do well, you just need to wait for your opponent to make a mistake…

Many mobile phone manufacturers were originally strategic partners of Qualcomm. If the Snapdragon 810 chip was acceptable, they would not have chosen Zhiyun Semiconductor's W806 chip.

Unfortunately, the Snapdragon 810 chip has serious design flaws and the heat dissipation problem is so serious that it is completely unusable.

This has left a large number of mobile phone manufacturers with little choice but to use the W806 chip, unless they are willing to see their market share in the mid-to-high-end mobile phone market being swallowed up.

This also resulted in the fact that this year, except for Zhiyun and Fruit, the new flagship and high-end phones launched by other mobile phone manufacturers are almost all equipped with W806 chips.

Its shipment volume is very large, and has brought huge revenue and rich profits to Zhiyun Semiconductor.

In addition to the high-end W806 chip, Zhiyun Semiconductor has also launched the mid-range W802 chip, which is also based on the nm process.

This chip also sells quite well, and is used in many mobile phones priced around 2,000 yuan.

In addition to last year's W700 series chips, such as last year's flagship W706, mid-range 703, and the W600 series chips launched the year before, such as W606, 601 chips, etc.

These mobile phone SOCs based on 28nm process are still the mainstream of the market, with very large shipments in the mid- and low-end markets.

Zhiyun Semiconductor's W series SOC has formed a large SOC family with multiple generations, low, medium and high-end. It is not only supplied for mobile phones, but also has versions without communication baseband for platform computers, smart TVs and other smart terminals.

Last year, the annual shipments of W series chips exceeded 500 million units, and this year it has gone a step further, with an estimated shipment volume of 600 million units, surpassing Qualcomm's 500 million units, making it the leader in the third-party mobile phone SOC field.

As for the third place, there is no third place... MediaTek has never risen in this time and space, and has been replaced by Zhiyun Semiconductor. Now it is just a small player and not worth mentioning.

They themselves dislike Sixing’s chips, let alone other mobile phone manufacturers… The core reason is that they lack communication basebands. If other manufacturers want to buy Sixing’s SOCs, they have to go to Zhiyun Semiconductor or Qualcomm to purchase high-priced communication basebands. Even if they have money, they can’t make things this way!
Texas Instruments' SOC business is also finished, STMicroelectronics was finished even earlier, and there is also Nvidia, whose SOC business was already failing before it was acquired by Zhiyun.

In the current market, the only mobile phone SOC manufacturers are Zhiyun Semiconductor, Qualcomm, Fruit, Six-Star, and Huawei.

Zhiyun Semiconductor's S series, Fruit's A series, Warwick's self-developed chips, and Sixin's chips are basically used for their own purposes and are not supplied to the outside world.

Currently, the only products that are supplied on a large scale and have been recognized by customers are Zhiyun Semiconductor's W series and Qualcomm's Snapdragon series.

There are only these two types of chips on the market, and mobile phone manufacturers that do not have the ability to develop their own chips can only choose one of the two.

When reporting to Xu Shenxue, Fu Zhengyang of Zhiyun Semiconductor even made a bold statement that he was ready to continue his efforts next year and strive to achieve a shipment volume of 700 million SOCs.

"The W906 chip we will launch next year uses nanometers and has been successfully taped out. Its performance is quite good."

"The CPU continues to use a dual-large core plus dual-small core design, with a maximum frequency of up to 2.3GHZ, and the GPU performance has also been greatly improved."

"Although there is still some gap in overall performance compared to S603, it is not too big. When testing, the multi-tasking capability is even better."

Fu Zhengyang continued, "Our chip's competitor is Qualcomm's Snapdragon 820. If nothing goes wrong, their chip will use Four Star's -nanometer process. The performance is currently unknown, but according to intelligence, it should not be bad."

"The main reason is that Four Star has reached a strategic cooperation agreement with Qualcomm. Next year, Four Star's Galaxy S7 will use their Snapdragon 820 chip. In order to win their orders, Qualcomm has paid a huge price, not only for the exclusive period, but also for the foundry orders."

"However, the production capacity of Sixing's 820-nanometer process is still very low. The chip is barely enough to meet the needs of Sixing's mobile phones. It is impossible to supply it on a large scale in the first half of next year."

“So although we lost a four-star Galaxy series order next year, we have won a lot of orders from other mobile phone manufacturers, and we are still striving for orders!”

Xu Shenxue said at this time: "Do a good job and strive to get more market share next year, and don't leave too many opportunities for Qualcomm's Snapdragon 820!"

Fu Zhengyang said: "We have the same idea, so for next year's 906 chip, we will control the shipping price within a certain range. At the same time, because our 820nm process chip production capacity has increased significantly, we will also open up the supply of this chip to squeeze the living space of the Snapdragon chip as much as possible!"

"As long as the shipment volume of their Snapdragon 820 chips next year fails to meet expectations, it will be very difficult for Qualcomm. After all, the failure of their flagship chips for two consecutive years will not only make it difficult to recover the huge investment, but more importantly, their chips will completely lose the trust of manufacturers!"

Xu Shenxue said: "That's the truth. Since we've suppressed them once, we should try to suppress them a second time. If we keep suppressing them, they won't be able to get up!"

"The high-end chip market is not big, and the third-party chip market is even smaller!"

"The world is too small to accommodate both us and Qualcomm. One of us must die!"

"So we still need to cheer up and face the competition"

The market for high-end SOC chips is actually limited.

High-end chips are used in high-end mobile phones, as there is no need to think about the market for Fruit and Zhiyun, as they have their own exclusive chips.

In addition, the mobile phones under Weiku Electronics, including high-end mobile phones, only use chips from Zhiyun Semiconductor and do not participate in third-party chip competition.

Therefore, only foreign manufacturers such as Snapdragon 850, LG, and some domestic mobile phone manufacturers' high-end mobile phones are left for Zhiyun Semiconductor and Qualcomm to compete.

Last year, Qualcomm was the leader, occupying most of the market, while Zhiyun Semiconductor was a little behind.

This year, Zhiyun Semiconductor has regained its position in the high-end SOC field and almost monopolized the market...

Currently, more than 806 smartphones have been confirmed to use the W806 chip. Except for the odd one, the Xiaomi, the others are mid-to-high-end phones priced at more than yuan. The overall shipment volume of the W chip is very impressive.

In the market next year, Qualcomm Snapdragon 820 will make a comeback and win the large order of the four-star Galaxy series, but Zhiyun Semiconductor's W906 chip will also win orders from many other manufacturers, including orders for mid-to-high-end mobile phones from foreign manufacturers LG, and domestic customers such as DaMi, Lianxiang, OV Brothers, Zhongxing, Coolpad, etc.

Even among the four-star brands, some mid-range to high-end models expected to be launched in the second half of next year will use the W906 chip.

Even with more sufficient shipments, next year's Zhiyun W906 chip will be able to further explore the market into the mid-range market and expand its market share.

By next year's W series SOC chips, there will be no need to make further breakthroughs. It only needs to maintain the current market size to further squeeze Qualcomm's living space.

Xu Shenxue is very much looking forward to seeing such a scene next year.

However, it is also very difficult. It is unlikely to completely eliminate Qualcomm's SOC chip, but there is still some chance of further squeezing the living space of the Snapdragon series chips.

Especially by next year, Zhiyun Microelectronics' 906-nanometer production capacity will be fully released, which will be enough to support the large-scale external supply of W.

After large-scale shipments, the cost of the W906 chip has been reduced, and the price can be reduced in a fast cycle, which will continue to squeeze the profit margin of Snapdragon 820.
Chips using new process technologies have high design and tape-out costs, so the cost difference between shipping one million chips and shipping ten million chips is huge.

As long as W906 can achieve a certain initial shipment volume, Zhiyun Semiconductor will be able to quickly lower the price of this chip and compete with Snapdragon 820.

Of course, to achieve this, sufficient production capacity is also indispensable.

On this point, Zhiyun Microelectronics said there was no problem.

When Ding Chengjun, the head of Zhiyun Microelectronics, reported to Xu Shenxue, he made it clear: "Since October, our Zhiyun Microelectronics' No. 11 plant has started production of -nanometer technology, and in November, the production capacity has been increased. Now it has entered the full-scale production stage."

"At present, the production capacity of our Zhiyun Microelectronics' 14-nanometer process has increased to 90,000 pieces per month, which has initially met the production needs of various advanced chips within the group!"

"The current production capacity of the ninth plant is to assist in the production of S603/602 chips."

"In addition, we are mass-producing this year's WZ5000/U chips, AI5000 chips, APO4000 graphics cards, and Nvidia's high-end graphics cards, which are 5000-nanometer chips used internally by the group." "The WZ/U chips used in computers will be launched globally in December along with the new generation of PC products."

"In addition, Zhiyun Semiconductor has also launched the first generation of X86 server chip WZF10, which has very good performance. It is mainly used by the group itself and also supplied to other corporate or institutional customers. We have also started queuing up for the production of this chip, and it is expected to start shipping in January next year!"

"At the same time, we have also started producing W906 chips for early testing by several major customers, such as the Bluemax 8 from Vico Electronics and Xiaomi's Mi 5, but these phones are not expected to be available for sale until March next year."

"Overall, the 14-nanometer process capacity of Zhiyun Microelectronics can already meet the initial demand, and after the first quarter of next year, our capacity will be more relaxed because Zhiyun Microelectronics will have a third wafer fab that has completed technology upgrades and has the mass production capacity of the 14-nanometer process."

"This factory is the 17th factory of our Shenzhen Semiconductor Base. The equipment in this factory is very advanced and the upgrade and modification are easy and time-saving. We are making improvements without stopping production in the early stage. It is expected that the factory will be able to mass-produce 14-nanometer technology in February next year!"

"By then, we will be able to increase our monthly production capacity by another 50,000 pieces."

After hearing this, Xu Shenxue said, "In that case, by the beginning of next year, our 14-nanometer process capacity should be 140,000 pieces. Well, that's good, it should be enough for the initial stage!"

Ding Chengjun said: "Not only is it enough for our own use, but we can also provide 14-nanometer process capacity for Huawei, AMD and other customers. We have received 20 14-nanometer process chip foundry cooperation orders from around the world, and our customer base is still growing."

A production capacity of 140,000 pieces is already quite good. After all, increasing the production capacity of this top-level process requires a huge investment, and it is not easy for ordinary wafer fabs to increase their production capacity.

With sufficient production capacity guaranteed by Zhiyun Microelectronics, Zhiyun Semiconductor can say to all customers tomorrow: W906 is open for sale, and it is in stock. As long as you pay, you can go directly to the warehouse and take it away!
This will have a huge positive impact on the sales of the W906 chip after it is launched on the market!
Especially for the Snapdragon 820 chip, because it is manufactured using Samsung's 820nm process, and because of Samsung's exclusive period, priority supply and other restrictions, it is highly likely that the Snapdragon chip will not be able to be supplied on a large scale to other mobile phone manufacturers in the first half of next year.

This provides a huge weapon for the W906 chip to continue to expand the market and compete for orders!
Sometimes market competition can be very simple, especially for flagship chips with advanced technology. Competing for orders often only requires one simple sentence: I have stock!
Of course, next year, whether it is Snapdragon 820 or Zhiyun W906, they are all chips using the -nanometer process, including Huawei's subsequent self-developed chips, which are also chips using the -nanometer process.

However, Zhiyun's S series mobile phones will use a newer generation of technology, namely the 12-nanometer process!

To be precise, this is actually an improved version of the 14nm process. The initial research and development code was 14N process. According to the classification of Intel, TSMC, and Samsung, it still belongs to the nm process node.

However, for marketing purposes, Zhiyun Microelectronics simply calls this 14N process the 12-nanometer process.

The process will be successfully put into production in the second quarter of next year, and then the 12-nanometer S706 chip will be produced... Because there are no major practical technological changes, even the factory will not change and it will still be Tongcheng Factory No. .

With a little improvement, Fab 12 will be able to produce the so-called -nanometer process.

Of course, the 12nm process is still more advanced than the 14nm process in terms of technology, and the chips produced by it have stronger performance, mainly because the power consumption per unit area is further reduced.

This power consumption reduction is still very important for mobile phone chips such as SOC.

If power consumption is reduced and heat dissipation is better, the chip can be made slightly larger and more transistors can be stacked, ultimately improving performance.

Next year, the 12-nanometer process will be used, and the year after, if nothing unexpected happens, a whole new generation of process node, that is, the 10-nanometer process, will be used.

The real next-generation process node of Zhiyun Microelectronics is actually the 10-nanometer process node... It is not just Zhiyun. Intel, TSMC, and Four Star have all placed their next-generation process nodes on the 10-nanometer process.

At present, Zhiyun Microelectronics is making relatively smooth progress on the 10-nanometer process node. The main part of the No. 21 plant has been completed, and it is currently in the stage of equipment installation and debugging. It is expected that the preparation work for the factory will be completed by the middle of next year, and then it will cooperate with the process department to carry out various research and development tests of the 10-nanometer process. If everything goes well, large-scale mass production will be carried out in the first quarter of the following year.

Going further, it is the seven-nanometer process, which is more difficult and takes longer... After all, at this process node, using a DUV immersion lithography machine for production requires quadruple exposure.

ASML expects to deliver this advanced lithography machine to Zhiyun Microelectronics in batches starting from early next year, but only one will be delivered at the beginning, and then the second and third machines will be delivered in succession. It is expected that all deliveries will be completed in the first quarter of the following year.

The entire delivery time will be extended to more than one year!
The reason why the delivery time is long and the deliveries are sporadic is that advanced DUV immersion lithography machines are of great importance. Several major semiconductor manufacturers are now competing fiercely and no one wants to fall behind.

According to the temporary verbal agreement reached between Xu Shenxue and the American consortium, the DUV immersion lithography machines have to be delivered in turns... and everyone can use them together!

Otherwise, it will be just like the EUV lithography machine, and no one can use it!

Therefore, ASML is currently providing this advanced lithography machine to Zhiyun Microelectronics, TSMC, Intel, and Star Semiconductor simultaneously, and the deliveries are made one by one in turn until the initial batch of orders is delivered!

This advanced DUV immersion lithography machine from ASML is capable of meeting quadruple exposure production and can be used to produce 7-nanometer chips... It is from Zhiyun Microelectronics and is also a key equipment for several other semiconductor manufacturers to produce -nanometer chips.

Of course, Zhiyun Microelectronics ordered this lithography machine from ASML just to be on the safe side... In fact, if there are no major accidents, Gulf Technology will be able to start providing Zhiyun Microelectronics with HDUV-600 lithography machines by the end of next year.

This lithography machine is powerful enough to produce 7-nanometer chips.

Just to avoid accidents, Zhiyun Microelectronics first ordered a batch of advanced lithography machines from ASML.

Whether it is ASML's lithography machine or Gulf Technology's lithography machine, as long as one of them is used, Zhiyun Microelectronics will be able to develop this quadruple exposure technology and then produce chips equivalent to a seven-nanometer process.

This time point should be the end of the year after next, and if it is mass-produced, it is estimated to be the first quarter of the year after next.

In other words, when Zhiyun launches the new generation S18 mobile phone in 18, it will most likely be equipped with a mobile phone SOC with an equivalent 7nm process.

Moreover, if nothing unexpected happens, some of the chips with equivalent 7-nanometer process will be produced by Gulf Technology's HDUV-600 lithography machine.

Just like next year, there will be a large number of 500nm process chips manufactured by Zhiyun Microelectronics, some of which will be produced by the HDUV- lithography machine under Gulf Technology.

After spending so much money over so many years, Xu Shenxue finally developed his own lithography machine, which has reached the first-class level and can be used in his own flagship products.

Instead of being like before, the outdated lithography machines produced can only be used for the production of mature processes, but are of almost no help to Zhiyun's core products.

This situation will begin to change next year!
By then, the semiconductor equipment and consumables fields under the Fairy Mountain Holding System with Gulf Technology as the core will truly enter the Zhiyun supply chain system and become the core foundation for Zhiyun Group to dominate the world!
After next year, if the American consortium still uses semiconductor equipment and consumables to bargain with Xu Shenxue, engage in negotiations, and try to make him make concessions in other areas, Xu Shenxue will dare to slap him in the face and say: Get out of here!

You are still using an outdated gadget to negotiate with me. Do you have a brain? It would be better to change it to an EUV lithography machine...

I already have things in some key areas, even if they are a little short of them, so I feel more confident.

If not, it becomes very troublesome.

Either you beg others for a living in a humble manner; or you do what Xu Shenxue did, relying on your madness, carrying a rocket launcher and pointing it directly at people's heads, forcing them to sell to you.

To be honest, neither of these two paths is a good path.

Xu Shenxue would rather blow up the whole world than choose the first path...his knees are too stiff and he can't kneel down.

The second path is very risky and can easily fail... After all, you can't expect everyone on the other side to be rational.

If there is a crazy character on the other side, he is even crazier than you. Not only will he not sell to you, but he will also hold a cigarette and a bazooka, and will shoot a rocket at you when he sees the right opportunity...

That’s the end of it!
When people pretend to be tough outside, what they fear most is meeting someone who is more ruthless than you... They are also afraid of meeting those stupid idiots who don't understand the situation.

Once you meet these two types of people, it's easy to break down... However, if you are weak even once, they will treat your threats as bullshit in the future.

But, logically speaking, Xu Shenxue can't really play the global killing game with those lunatics and fools... Although Xu Shenxue often acts crazy, he is not crazy to this extent!

Well... Actually, the American consortium on the other side also thinks so. They think Xu Shenxue is a madman and a fool: stupid and does things without considering the consequences.

I am a respectable person with a family and a career. I can't really accompany this fool to play a global killing game, and then live in fear all my life, worrying about rockets falling from the sky!
That's crazy!

What's the picture...

Because both sides have concerns, they can actually reach a certain compromise, just like the temporary verbal agreement between Xu Shenxue and the American consortium.

But if a madman comes, who knows, he might really play this trick with Xu Shenxue, and then Xu Shenxue himself will be at a loss...

So, pretending to be scary is useful in most cases, but sometimes it will fail and even backfire on you.

The risk is very high!
----

Whether you ask for help or threaten others, you still have to have the ability and confidence to do some key things yourself.

Now, Xu Shenxue already has a DUV immersion lithography machine, and his technology is pretty good.

Next, we need to vigorously promote the research and development of EUV lithography machines!
Soon, Xu Shenxue went to Gulf Technology. In addition to looking at the existing DUV immersion lithography machines, especially the development of the HDUV-600 lithography machine, he also focused on inquiring about the development of EUV lithography machines.

It’s the end of the month, if you have a guaranteed monthly ticket, remember to vote, don’t let it expire and waste it!

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(End of this chapter)