Rebirth 08: Rise from copycat phones

Chapter 423 The world's largest semiconductor company
Now it is September, and all businesses of Zhiyun Group are proceeding according to the planned schedule.

The core business, the S series of mobile phones, is also doing quite well.

The new generation of S17 series mobile phones was launched on the market in mid-August, with its powerful hardware performance, top-level ecological applications and user experience, as well as a unique smart capsule display mode, built-in Yun AI system, and Max series' three cameras and centered circular layout, and full coverage of dual cameras for the standard and Pro versions.

These and many other features have triggered a new round of buying rush for the S17 series of mobile phones in the global market.

It is not only a huge success in the domestic market, where it almost monopolizes the high-end market share of more than 5,000 yuan, but it has also been a huge success in all major smartphone markets except the United States, including Europe, ASEAN, Latin America, Australia, Japan, etc.

The stock prepared in advance was quickly sold out, and the three major OEM factories subsequently started producing mobile phones 7 hours a day, 24 days a week. The mobile phones were shipped to various markets and sold out as soon as they were released.

The S17 mobile phone continued to be out of stock worldwide after its release.

It has become a tradition that S series mobile phones are snapped up after their release and are out of stock worldwide... People are no longer surprised by this.

The huge success of the S series of mobile phones, especially the good sales of the MAX series, has led many outside analysts to believe that it will be no problem for Zhiyun Group to maintain its mobile phone shipments at 300 million units this year, and further increase in revenue is also very likely.

After all, the sales of the MAX series are continuing to increase, and the two mobile phones, MAX and MAX Pro, are super high-priced mobile phones with a starting price of 8,000 yuan and 10,000 yuan respectively.

The increase in sales of these two models has driven up the average selling price of the entire S series as well as overall revenue and net profit.

Zhiyun Group's core business continues to grow, and its other businesses are also performing well.

When Ji Chenghe reported to Xu Shenxue, he acted very relaxed:
"This year, our semiconductor business has maintained a very good growth rate. The SOC business in the chip business has continued to maintain a small increase. It is expected that the shipment volume this year will exceed 800 million pieces, accounting for nearly 55% of the global SOC market."

Xu Shenxue knew just by hearing this data that this year, its own SOC business has surpassed Qualcomm again. Apart from Qualcomm, other companies, such as Apple, Huawei, MediaTek and the newly emerging domestic company Tsinghua Unigroup, are even less able to pose a challenge to its own SOC business.

As for the major players in the former SOC market, such as Texas Instruments, the four-star ones are no longer doing well.

Ji Chenghe said: "The SOC market is a very large and highly competitive market. We are also actively facing the challenges of our competitors and will launch new products this year to meet the competition!"

Xu Shenxue said: "The SOC market is a large market and an important application scenario in the consumer semiconductor industry. It cannot be ignored!"

The total market size this year is expected to reach 140 billion US dollars. This is not a small market and deserves Zhiyun Group's high attention.

Although most of Zhiyun Semiconductor's SOC sales are supplied by Zhiyun Group and Wecoo Electronics, it also occupies a large third-party market. Its core customers include Sixin, LG, Huawei, Dami, OV and Lianxiang... Basically, except for Apple, other mobile phone manufacturers will more or less purchase Zhiyun Group's SOC chips.

Of course, they will also purchase SOC chips from Qualcomm or MediaTek at the same time... The principle of supply chain diversification means that all eggs cannot be put in one basket.

If they all purchase Zhiyun Semiconductor's SOC chips, Qualcomm and MediaTek's SOC business will be finished next year... Once the competitors are finished, these mobile phone manufacturers will only have Zhiyun Semiconductor as a supplier... This is not a good thing for them.

Therefore, even some domestic mobile phone manufacturers purchase most of their chips from Zhiyun Semiconductor, but they will still continue to purchase chips from Qualcomm or MediaTek to maintain a diversified chip supply.

Therefore, it is actually very difficult for Zhiyun Semiconductor to continue to significantly increase its market share. However, in the past two years, Zhiyun Semiconductor has continued to move towards the mid-to-high-end in its SOC business.

Especially since last year, Zhiyun Semiconductor has begun to vigorously promote the W900 series chips based on nm and nm processes to the market.

Especially in the first half of this year, the W909 chip based on the -nanometer process was officially supplied to the outside world.

Among them, the W909 chip, as a new generation of flagship high-end chip in the W series under Zhiyun Semiconductor, adopts a six-core design and has extremely powerful performance. It has become the chip for flagship phones of many mobile phone brands this year.

For example, this year's Little Blue MAX series from WeCool Electronics, Dami's full-screen mobile phone series, OV's flagship series, and Lianxiang's flagship series all use the W909 chip.

In overseas markets, LG and some Japanese mobile phone manufacturers also use the W909 chip in some of their high-end models.

However, it still failed to win the order for the S-Star Galaxy series... Now, the cooperation between S-Star and Qualcomm is getting deeper and deeper. Qualcomm's chips are manufactured by S-Star Semiconductor, and S-Star's mobile phones use S-Star chips on a large scale.

At the same time, after Four Star’s sales in China plummeted, Four Star began to focus its market focus on markets in other regions.

In many cases, it is becoming increasingly difficult for Zhiyun Semiconductor's W series chips to win orders from Four Star... It's not that Four Star will no longer purchase Zhiyun Semiconductor's SOC... It's just that Zhiyun Semiconductor's SOC chips have become 28 out of 2 in Four Star's supply chain system, and can only get orders for some mid- and low-end chips, with a small share and small amount.

To put it bluntly, the SOC orders that Fourstar has given to Zhiyun Semiconductor have become a means for Fourstar to balance and negotiate with Qualcomm...

Four Stars: If you don’t bargain, I’ll buy it from Zhiyun!

Qualcomm: You are so cruel! I can only reduce the price by 10% at most, otherwise I would rather die than sell it to you!
Zhiyun: Where is the four-star order?
It's not just Samsung that's doing this. LG and other foreign mobile phone manufacturers are also adopting a similar strategy... using a small share of orders to keep Zhiyun Semiconductor hanging on, and using Zhiyun Semiconductor to threaten Qualcomm to cut prices.

Of course, domestic mobile phone manufacturers are also taking a similar approach, using small orders to keep Qualcomm hanging on while using Qualcomm to threaten Zhiyun to lower prices.

This is the necessity of diversifying the supply chain... If either Zhiyun or Qualcomm dies, the original price of mobile phone chips will immediately soar by 50%!
As for MediaTek and the newly emerging domestic company Tsinghua Unigroup, they can only survive in the low-end market for the time being and have little influence. Apple and Huawei only use their chips for their own use and do not export them.

Therefore, the current third-party SOC market is basically a situation where Zhiyun Semiconductor and Qualcomm compete with each other, and the competition is very fierce.

In addition to the W909 chip, Zhiyun Semiconductor's mid-to-high-end chips this year also include the previous generation W906 and 907 chips, which use a -nanometer process.

The sales volume of the W906 chip is average, and there are not many new customers. Only some old models are being sold. This chip is mainly positioned at the high end and is expensive, but its performance is worse than that of the W909 chip, and its price is not much lower. The cost performance is extremely poor compared to the W909. Therefore, the market positioning of this chip has been replaced by the W909 chip.

However, the sales of the W907 chip are increasing, because this is a mid-range chip based on the -nanometer process, originally designed for mobile phones priced at two to three thousand yuan. As shipments continue to increase, manufacturing costs continue to decrease, and selling prices are also gradually decreasing. Now it has begun to appear in a large number of models priced around one thousand five hundred yuan.

It can also be said that after about two years of market popularization, 14-nanometer process chips are now also being used in ordinary mobile phones.

The current W907 chip has replaced the former W707 chip and has become the Zhiyun Group's largest export chip. The shipment volume is quite exaggerated, and it is expected to reach about million pieces this year... Many of the new mobile phones launched this year with a price range of around to yuan are equipped with this chip.

The W700 series, the original market leader, has seen a decline in sales, but it still occupies a large market share... This chip is based on a 28-nanometer low-power process, which is still not considered backward even now.

Although Zhiyun and Fruit are both using 10-nanometer process chips, in fact, even 14/16-nanometer process chips are not yet fully popularized. They can only be seen in mid-to-high-end mobile phones, while low-end and some mid-range mobile phones all use 28-nanometer process chips.

Especially in the thousand-yuan phone market, the 28-nanometer process is still the mainstream, not to mention the ultra-low-end phones below a thousand yuan.

At the same time, the baseband-free version of the W700 series chips has also begun to expand its market applications in other smart devices, with sales increasing year by year.

SOC chips, especially baseband-free versions, actually have a very long market lifespan... They were first used in mid- to high-end mobile phones, then in low-end mobile phones, and then in smart TVs or other miscellaneous smart devices.

So don’t think that the performance of the 28LP W700 series is outdated and there is no market for it... In fact, it can still be sold for a few more years.

In fact, there are only a few manufacturers in the market that can provide SOCs based on 700LP process like the W28 series.

At most, there are only Zhiyun, Qualcomm, Fruit, Huawei, Four Star, MediaTek...

It's not really everywhere.

----

The SOC chip business is only a part of Zhiyun Semiconductor's business, which includes a variety of miscellaneous chips.

Among them, storage chips are a core business!
This year, the global storage chip market totals 120 billion US dollars, flash memory chips account for about 40 billion US dollars, and the memory market accounts for about 70 billion US dollars.

Zhiyun Storage, a subsidiary of Zhiyun Group, has multiple brands of flash memory chips and memory chip products, and its market share is also high.

Especially in the current storage chip market, which relies to a large extent on various smart terminal devices with smartphones as the core, Zhiyun Storage is already able to live a very comfortable life relying on the storage chip orders required for Zhiyun's own and Wecoo Electronics' smart devices.

As for export orders, there is a slight lack, mainly because competitors such as Four Star, Micron, and Hynix are playing too fierce a price war.

Competition in the storage chip market is much more intense than competition in the logic chip market...

However, even so, Zhiyun Storage can still obtain about 30% of the global storage chip market share, and is expected to obtain US$36 billion in revenue (including internal orders)... There is no way, the company has too many orders, and it occupies a large domestic market share.

It is difficult to have a low revenue. In addition to logic chips and storage chips, Zhiyun Group's semiconductor business has another star product, which is the GPU business.

Including consumer-grade GPUs as well as server GPUs!

Among them, consumer-grade GPUs are mainly various graphics cards provided by the NVIDIA brand, but the growth rate of this business is very average... Now even desktop computers are not sold very often, so naturally there are not many sales of independent graphics cards.

As for the GPU in the laptop, it is generally the GPU integrated in the CPU. This type of GPU is generally not counted in the GPU business, but in the CPU business.

What really brought a lot of growth to Zhiyun Group's GPU business was the server GPU business, or more precisely the APO series graphics cards... In addition, the AI ​​series graphics cards used by the group for its own use are not listed separately for confidentiality, but are counted together with the APO graphics cards. As for the group's external announcement, its own artificial intelligence training or operation servers also use self-used versions of the APO series graphics cards.

With the substantial increase in demand from the group itself and its sister companies, shipments of Zhiyun's AI series graphics cards have surged.

At the same time, shipments of APO graphics cards supplied to the external market also increased significantly.

This year, Zhiyun Group is estimated to achieve nearly US$20 billion in revenue (including self-use orders) in its server GPU business, with a growth rate of 100%... This is due to the fact that this year Zhiyun Group began to fully promote the application of artificial intelligence and open-sourced a variety of artificial intelligence big data models, thereby driving the global AI wave.

This has directly led to a surge in server GPU sales, and there is no end in sight for this surge, as a large number of companies are preparing to enter the field of artificial intelligence.

The group's internal analysis department believes that by next year, the group's server GPU business revenue is expected to reach US$30 billion (including self-use orders).

Logic chips, storage chips, and server GPU businesses are the core businesses of Zhiyun Semiconductor.
As for other chip fields, there are actually quite a few, but the scale is generally small, such as general-purpose comprehensive computing power automotive-grade chips, such as EYEQ series chips, EYQ series chips, and PX series chips.

There is also the ZY series of high-performance AI chips for the group’s own use.

Then some semiconductor sensors...these semiconductor sensors are actually also considered semiconductor businesses.

There are also various auxiliary chips.

Finally, there are the computer CPUs and server GPUs that people are also familiar with. The server GPUs are basically for self-use and institutional orders, with no external commercial market. The consumer-grade CPUs are basically for self-use and institutional orders as well. There are commercial orders, but the proportion is not large.

Zhiyun Group is developing computer CPUs purely to avoid being strangled, not to grab a certain market share... Mainly because the group's top management believes that the traditional CPU market is already on the decline and there is no future, so no matter how hard they try, it will be just like that, so they don't invest many resources.

It can enable its own notebook products to have a powerful CPU to compete with fruit notebooks, and at the same time bring some more unique advantages to its own notebooks... By matching its own computer with its own CPU, optimization in all aspects can be done better.

As for the CPU market for external computers, just go with the flow and don't force it.

However, this is not a must, and Zhiyun Group's CPU business still ranks third in the world, behind Intel and almost on par with AMD, with a market share of about 18%. Part of the market share relies on its own and institutional orders, and another part comes from orders from some domestic PC manufacturers and sales of some assembled computers.

I can only say it’s neither good nor bad!
They say it doesn't have many orders and its market share is low...but it's still the third largest in the world after all.

You say it is third in the world...but its shipment volume is indeed not that good.

This is mainly due to the influence of the X86 chip ecosystem... Although they are all X86 chips, there are still some differences in ecosystem support between Intel's X86 chips and Zhiyun and AMD's X86 chips.

At present, Zhiyun’s hardware level in the CPU field is very good, but it still needs to continue to accumulate and cultivate in the software ecosystem.

Zhiyun Group’s semiconductor design business covers a wide range of categories, basically covering a variety of mainstream chip products. It is also the world’s largest semiconductor design company.

Someone once said that in the global chip market of about 420 billion US dollars, Zhiyun alone accounts for 140 billion US dollars, with a market share of about 33%.

However, most of Zhiyun Semiconductor's chip products are for self-use, and Zhiyun Group never announces the sales volume and order amount of these self-use chips, so it is difficult for the outside world to make an accurate judgment.

They are all our own chips for our own use, so why count them... Zhiyun basically counts the products sold externally, such as various terminal devices and semiconductor products sold to other customers or consumers.

Selling chips designed and manufactured by oneself to oneself and still counting the revenue... this is called double counting.

Therefore, although the various semiconductor business statistics of Zhiyun Group’s Industrial Department have never included revenue data for the group’s own chips.

However, even so, the revenue of Zhiyun Group's semiconductor design business still reached more than 60 billion US dollars last year, and it is estimated that it will continue to increase significantly this year.

If we add the semiconductor manufacturing business (external foundry), well, still not counting the chip foundry for self-use, and only counting the external foundry, we can also have a revenue of nearly 10 billion US dollars - Zhiyun Microelectronics almost monopolizes the domestic high-end chip foundry field, and at the same time undertakes a large number of foreign chip foundry business.

Without counting the data of chips used by itself, Zhiyun Group's semiconductor business as a whole can still provide Zhiyun Group with approximately US$700 to 800 billion in revenue each year by relying only on external sales and foundry.

If chips used for self-use are included, the figure will become extremely exaggerated, starting at at least 150 billion US dollars, or even higher.

The world's largest semiconductor company, this is no joke!
However, even with the three leading companies, Zhiyun Semiconductor, Zhiyun Storage and Zhiyun Microelectronics, at the forefront, China still imports a large number of chips every year... This is purely because China is the world's factory. Most of the world's chip production capacity is actually purchased by China, and then assembled and produced into various mechanical equipment and smart devices for export!

It’s not that we import massive amounts of chips every year and consume all of them ourselves... In fact, most of them are imported, installed into equipment and then exported.

To be honest, considering the strong driving role played by Zhiyun Group, China has actually changed from a net importer of chips to a net exporter, and the net export volume is very large.

Of course, this is based on the existence of Zhiyun Group... If the semiconductor production capacity of Zhiyun Group is removed, the data will become very ugly, even uglier than oil imports.

As for the semiconductor business, Xu Shenxue doesn’t have to worry about the design and manufacturing aspects!

Zhiyun Group's chip design capabilities are world-class, and its chip manufacturing capabilities are also world-class.

What Xu Shenxue really needs to continue to worry about is the semiconductor equipment and consumables field upstream of the chip industry!

On September 2nd, Xu Shenxue went to Gulf Technology, a subsidiary of Fairy Mountain Holdings!

After years of research and development, Gulf Technology finally developed the first prototype of EUV lithography machine, even though it was just a prototype built only to verify the technology.

However, Xu Shenxue still put aside many other matters and went to Gulf Technology to inspect this EUV lithography machine which has huge strategic significance.

After Xu Shenxue's convoy arrived at Gulf Technology, there was no other unnecessary nonsense. They went directly to the EUV project team's laboratory and saw the EUV lithography machine.

This EUV lithography machine is unremarkable and looks like just a big cabinet.

However, Xu Shenxue is very clear that for this EUV lithography machine, at least more than 3,000 companies or research institutions in China are involved, and hundreds of thousands of scientists and engineers from different fields are directly or indirectly involved in the project.

This project can even be said to be the largest and most extensive technological research project in China's history - there is no way around it, although many other top industrial products have awesome technology, the fields they cover are generally limited.

At first glance, the lithography machine is just a semiconductor manufacturing equipment, nothing special, but in fact it involves so many fields. It is a precision equipment itself, and the equipment that manufactures parts is still precision equipment... The lithography machine itself is actually nothing, but the industrial system that can manufacture the lithography machine must be the most awesome.

Ultimately, it can get involved in most of humanity's cutting-edge technology fields to some extent. Without so many companies and research institutions to help, it would be impossible to do anything... there are not enough people.

Therefore, this EUV lithography machine is not just a lithography machine. It has more than 100,000 components inside, and each one represents the current top technological level of mankind.

To build such a prototype, the most advanced technology from more than hundreds of industrial subcategories in the country is needed.

If we fail to reach world-class standards in a certain field, we will not be able to produce such industrial products that represent the highest level of humanity.

This is the collective embodiment of countless cutting-edge technologies of mankind!
Before this, no country had ever been able to produce top-level industrial products of this level on its own, not even the United States.

However, under the blockade, in order to avoid being strangled, Xu Shenxue contributed both money and manpower with the strong support, and finally managed to get it done relying on the strength of the country... Of course, the most critical part is the scientific research system.

For this lithography machine, Zhiyun Group and Xiannvshan Holdings have specially developed dozens of new materials... and each of these materials is of top quality.

Without the support of the scientific research system, God knows when it will be possible to develop it.

But hard work pays off...Now they have finally developed the EUV lithography machine!
(End of this chapter)