Rebirth 08: Rise from copycat phones

Chapter 480: Zhiyun executives’ global boasting journey

When the annual advertising blockbuster "Thirty Not Love" produced and released by Yihai Culture, a subsidiary of Yihai Technology, landed in domestic markets and overseas markets such as ASEAN.

Driven by the marketing department of Zhiyun Group, local productions in other regions have also been launched into the market, with TV series and movies containing a large number of Zhiyun product elements.

From the ASEAN region to Europe and South America.

A large number of TV dramas and movies with modern urban backgrounds appeared in people’s sight, and then the Zhiyun logo was seen in them.

Some of these TV dramas and movies are produced or invested by COFCO’s overseas subsidiaries, while others are simply regular advertising placements.

Zhiyun Group has always liked to use high-end life scenes in modern urban film and television dramas to implant high-end features into its own products.

We want people to feel that those who use Zhiyun products are elites and enjoy a refined and beautiful petty-bourgeois life.

In short, it’s all about style!

Words like style and high-end are the core elements of Zhiyun Group's brand building!

To some extent, Zhiyun Group’s brand strategy is to move towards the route of technological light luxury products... but it is also a light luxury product that ordinary people can afford, and it is also a light luxury product with top technological content.

As for real luxury goods, Zhiyun Group still doesn’t think highly of them: the market is too small
The market size of many luxury goods, such as handbags, clothes, cosmetics, watches, etc. is actually not large, because these are relatively niche markets with a relatively low upper limit. Especially for giant companies like Zhiyun Group, they are small businesses that are not worth mentioning.

Because luxury goods are non-essential items for a niche group of people!
For example, cosmetics cost several thousand yuan, and most people can actually afford them, but there is no need to buy them!

In addition, these traditional luxury goods do not have any actual technical thresholds. Ninety-nine percent of them are packaged, and the high prices are not for selling the products themselves, but for the brand premium.

For example, a typical example in the luxury goods sector is watches... luxury brand watches worth hundreds of thousands or millions of dollars, their technical content and quality are not as good as the fakes produced by domestic imitation watch manufacturers!

Sometimes, to determine whether a luxury watch imported from abroad is genuine, just look at its workmanship and quality... If the workmanship and quality are good, there is no need to guess, it is 100% fake... If the quality is slightly not that good, congratulations, you have bought a genuine product.

As a result, many domestic fake watch manufacturers have to proactively downgrade their technical standards...if the quality is too good, they will be discovered to be fake.

The cosmetics industry is even more ridiculous. The ingredients of luxury cosmetics that cost thousands of dollars will not be fundamentally different from those of ordinary brand cosmetics that cost dozens of dollars... There is even a high possibility that the raw material suppliers are the same.

The same goes for clothes. For luxury clothes that cost thousands or tens of thousands of dollars, their OEM factories are all ordinary factories, and these ordinary factories are also producing clothes that cost tens or hundreds of dollars... The raw materials, equipment, and workers are all the same, and the only difference between them is the logo.

Moreover, in order to further reduce manufacturing costs, many luxury goods companies such as clothing and handbags often choose to find small and medium-sized factories or even small workshops for OEM.

This is the characteristic of traditional consumer luxury goods, that is, 90% or even more of the high selling price is the brand premium, not the value of the product itself!
Of course, in order to maintain brand premium and make consumers feel vain, luxury goods companies need to spend a lot of money on advertising and marketing every year... What's more interesting is that only a small part of their advertising and marketing is targeted at high-net-worth groups, that is, their customer groups.

In fact, most of the advertisements for luxury goods are targeted at the middle and low-income groups... They are not to let the middle and low-income people buy them, but to let these people in the middle and low-income groups know how expensive their products are!
And thereby provide emotional value to their purchasing users!
What’s the point of buying a bag worth tens of thousands of dollars if only rich people know about it? A large group of people who can’t afford it must also know that the bag is expensive, so that it is worth the money.

Therefore, traditional consumer luxury goods do not sell products, but emotional value!
But Zhiyun Group is different. Although their products are expensive, they are worth the money and they provide the best high-tech consumer products on the planet today.

From mobile phones, tablets, computers, headphones, AI glasses to robots, all are cutting-edge technological products.

Moreover, except for robots which are large consumer goods, all other products of Zhiyun Group are small consumer goods, costing only tens of millions of yuan. Most people can afford them, and everyone needs them.

Few people are willing to buy cosmetics that cost thousands of dollars, but most people are willing to buy Zhiyun mobile phones that cost thousands of dollars!
This feature has resulted in huge sales and revenue for Zhiyun Group’s smart terminals!
Coupled with the high added value brought by top-level technology and the extreme cost compression brought about by huge production volumes, Zhiyun Group's smart terminal products ultimately have a high gross profit margin.

Many factors combined support Zhiyun Group's huge annual revenue of US$300 billion from smart terminals and related businesses!

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Now, the core product of Zhiyun Group's smart terminal business, the S series of mobile phones, is about to release new models. This is a big deal for Zhiyun Group, for the global smart terminal industry, and even for the semiconductor industry.

A large number of smart terminal manufacturers, whether they are overseas manufacturers such as Apple, Samsung, LG, or domestic manufacturers such as OV, Huawei, and Rice, are all watching with wide eyes.

At the same time, everyone has prepared their little notebooks, waiting for all kinds of imitations and plagiarisms!

There is no shame in copying Zhiyun S series mobile phones!

The semiconductor industry is also paying close attention!

Because the core products that support the rapid development of the contemporary semiconductor industry and are constantly impacting advanced technologies are various types of smart terminals, especially smartphones!
The annual shipment volume of smartphones is about 1.5 billion units, which means that 1.5 billion mobile phone SOCs and the same number of 1.5 billion memory chips and flash memory chips are needed every year!
Among them, the mobile phone SOC chips are extremely pursuing advanced technology due to the competition among major mobile phone manufacturers!

Zhiyun Microelectronics and TSMC, the two world-leading logic chip manufacturers, have spared no expense and even used DUV immersion lithography machines to develop and create an equivalent seven-nanometer process in order to provide the most advanced manufacturing processes for the S series chips and A series chips respectively.

Mobile phone SOC chips are the main customers of contemporary semiconductor advanced technology. Their huge foundry orders have directly driven the development of the entire semiconductor industry, allowing wafer fabs to obtain continuous top-level process orders, prompting wafer fabs to continuously move towards higher technology!
Starting from the early 65-nanometer process, we have explored all the way down to the 28-nanometer process, then to the 14-nanometer process, and even to the current equivalent 7-nanometer process.

It is the mobile phone SOC chips that are constantly driving technological progress.

Without the mobile phone SOC chip market, it would be impossible to promote such rapid progress in chip manufacturing process technology!
At the same time, memory chips and flash memory chips also play a huge role!
Nowadays, the largest memory and flash memory chip consumer market is not computers or servers, but smart terminal devices with smartphones as the core!

Because the global shipments of personal computers are only about 200 million units per year.

And the shipment volume of smartphones is 1.5 billion units!

In addition, due to the influence of size and power consumption, smartphones require storage chips with advanced technology!
Zhiyun Group's most technologically advanced storage chips, whether memory or flash memory, were actually first used on S series mobile phones, then used in enterprise-level services, and finally supplied to PCs.

The cost of the SOC chip, flash memory and storage chip in a smartphone accounts for about 50 to 60 percent of the smartphone hardware cost, depending on the model.

Chips are to smartphones what the power batteries are to smart electric vehicles…they are the most core and most expensive components.

Why does Zhiyun Group invest huge amounts of money in the semiconductor manufacturing field? It is to independently and controllably produce various types of chips, control costs, avoid bottlenecks, and use self-developed chips to obtain better product performance.

Similarly, the rise and fall of various smart terminals with smartphones as the core has also directly affected the rise and fall of the semiconductor industry... and behind the semiconductor industry, there are a bunch of semiconductor equipment and consumables industries.

Therefore, the semiconductor industry is also paying close attention to the release of the new S series mobile phones by Zhiyun Group.

Even TSMC is paying close attention to this... Although Zhiyun Group does not need to outsource its chips to TSMC, as long as Zhiyun Group's new S series mobile phones sell well, the equivalent seven-nanometer process will achieve good market results.

Then there will be no shortage of foundry services for Apple's subsequent A-series chips and Qualcomm's new generation of chips!
TSMC now attaches great importance to the equivalent seven-nanometer process... In order to develop this equivalent seven-nanometer process and to keep up with the pace of Zhiyun Microelectronics, they have also paid a huge price.

The R&D cost is enormous, and we specially purchased the top-level NXT1980 lithography machine and other types of top-level semiconductor equipment, and invested huge money in a new wafer factory!

In order to develop this equivalent seven-nanometer process, their expenditure will be no less than that of Zhiyun Microelectronics.

In order to develop the equivalent of 7-nanometer process, Zhiyun Microelectronics has spent at least 20 billion US dollars, including research and development, construction of new factories, subsequent continuous technological improvements, and improved yields.

In fact, whether it is Zhiyun Microelectronics or TSMC, they all have high hopes for the equivalent seven-nanometer process!

The difference is that TSMC can only rely on mobile phone SOC chips represented by Apple's A series chips and Qualcomm's Snapdragon chips.

In addition to its own S series and W series mobile phone SOC chips, Zhiyun Microelectronics' equivalent seven-nanometer process can also be used to produce various CPU chips and GPU chips!

Especially server GPU chips, namely the AI ​​series graphics cards and APO graphics cards. The market demand for these two server GPU products is very large. In addition, there are terminal computing power chips, such as the EYQ series, EYEQ series, LC series, ZY series, etc. These computing power chips all require top-level technology!

These GPU products are enough to consume a large amount of production capacity equivalent to the seven-nanometer process.

Relatively speaking, TSMC is much weaker. They do not have huge orders for computing chip foundry... It's not that they don't have any, but the quantity is small. AMD still asks them to manufacture its consumer-grade GPUs, but the quantity is small and not up to par.

However, AMD's CPU business has made rapid progress in the past two years. By leveraging TSMC's advanced technology, it has snatched a lot of market share from Intel, which in turn has brought some orders to TSMC.

Speaking of which, Intel has been slow to achieve a technological breakthrough in the past two years and has been stuck in the 14-nanometer process, which has seriously affected their CPU market share.

AMD's chips use TSMC's 10-nanometer process, and it is even preparing to launch CPU products using the 7-nanometer process.

The WZ series CPU chips under Zhiyun Group are also continuously updated, from 14-nanometer process to 12-nanometer process, and then to 10-nanometer process. Now they are also preparing to develop a CPU with the equivalent of 7-nanometer process.

The transistor density of these two CPU chips, which use an equivalent seven-nanometer process, has reached hundreds of billions per square millimeter.

On the other hand, Intel's main CPU products are still using the 14-nanometer process, with a transistor density of only about 40 million per square millimeter. The only way to improve performance is to increase the chip area, but this will increase power consumption, chip area, and cost. Although Intel also launched its own 10-nanometer process this year, with a transistor density of 100 million per square millimeter, their process is currently immature, with a low yield, and the chip architecture is not good, so although the corresponding products were launched in the first half of this year, the market feedback was not very good.

If Intel's CPU chip market share only declines slightly this year, then when AMD and Zhiyun both launch CPU chips with equivalent seven-nanometer process to the market on a large scale this year, Intel's CPU business will probably face a tough battle, leading to a double plunge in revenue and zero profit!

Intel's lagging progress in the research and development of advanced semiconductor processes has also led to another interesting effect, which is that a series of computer products based on Intel have also been affected.

Not to mention other ordinary computer products, let’s just talk about the high-end business notebook market that has a relatively close relationship with Zhiyun Group!

There are actually only two players in the high-end business notebook market, namely Fruit and Zhiyun!
Fruit uses Intel chips, while Zhiyun uses its own WZ chips.

At the beginning of last year, Zhiyun's business notebooks were already ahead of Fruit's business notebooks in terms of CPU.

This year, Zhiyun's business notebooks will be equipped with CPU chips based on the equivalent of 7-nanometer process technology, while Fruit's business notebooks will continue to use CPU chips based on the equivalent of 14-nanometer process technology.

This will inevitably lead to a huge performance gap, which will in turn affect the overall performance and even reputation of the computer!

Both are top-level high-end business notebooks. The CPU of Zhiyun notebook is made of 7-nanometer process, while the CPU of Fruit notebook is only made of 14-nanometer process, which will even undermine the brand value of Fruit notebook.

It is rumored that Apple can no longer tolerate Intel's lagging behind, and in order to further improve the ecosystem and obtain more profits, it has begun to develop its own CPUs for various computer products.

This is the cruelty of the semiconductor industry. The decline of advanced process technology will bring about a series of negative effects, which will ultimately affect not only the semiconductor factory itself, but also the downstream chip market, smart terminals and changes in the computer product market.

But for Intel, this dilemma is difficult to change... From production to design, the completely self-sufficient chip model is good and can maximize profits.

But this also brings up a problem. That is, as the investment in advanced semiconductor processes continues to grow, semiconductor manufacturers like Intel, which only have CPU products, have found it difficult to meet the huge R&D and construction investments in semiconductor factories.

I can’t hold on any longer!
In fact, even for Zhiyun Group, which has huge shipments of various chips, while being able to bring huge orders of its own to Zhiyun Microelectronics, it still needs to take on a large number of external foundry orders.

In order to undertake external OEM orders, Zhiyun Microelectronics has paid a considerable price over the years, and only then has it barely established the trust of its customers!
Otherwise, those big customers will not trust you and worry that you will leak chip design data to Zhiyun Semiconductor next door.

In order to build up this trust, Zhiyun Microelectronics has spent many years and paid a considerable price.

Only in this way can we obtain OEM orders from big customers such as AMD and Warwick!
AMD has had many chip products manufactured by Zhiyun Microelectronics over the years, and there has never been any information leakage... Zhiyun Microelectronics strictly abides by the confidentiality contract and keeps the entire process of manufacturing AMD chips confidential, which even Zhiyun Semiconductor was unaware of.

If there was any leak, AMD would just run away.

Even so, Zhiyun Microelectronics does not have too many external foundry businesses. It is very difficult to do and the price is lower than that of TSMC or even Four Star!

There is no way, since you are not a professional foundry, there is a Zhiyun Semiconductor here, and they are on guard against you!

It is difficult for Zhiyun Microelectronics to outsource its business, not to mention Intel, which does not even provide outsourcing services to other companies... This means that they will need to bear and share the huge investment in the semiconductor manufacturing field, which will lead to an increase in chip manufacturing costs.

Increased costs, insufficient funds, lagging performance, shrinking market, and then insufficient funds...it's easy to fall into a vicious cycle.

AMD also encountered this vicious cycle back then... In the end, AMD had to cut off its arms to survive and directly sold its semiconductor factory, focusing only on the chip design field, and outsourced chip production to TSMC and Zhiyun Microelectronics.

By doing this, AMD has actually become more and more prosperous over the years.

Intel is certainly not at this point yet, but it is also showing signs of a vicious cycle. It is hard to say whether it will follow AMD's example and abandon part of its chip manufacturing business.

Smart terminals, computers and other types of hardware products are basically all related to the semiconductor industry in the end.

This has also made Zhiyun Group's semiconductor business grow bigger, with revenue gradually increasing every year.

Soon, Zhiyun Group will release its latest technological achievement in the semiconductor field, the S903 manufactured using an equivalent seven-nanometer process!

This chip will be installed on the S18 series of mobile phones and will be launched to global consumers!
People will be able to feel the shock of the equivalent seven-nanometer process technology from this mobile phone!

The performance of the mobile phone has been greatly improved!

Therefore, not only mobile phone manufacturers are paying attention to the S18 mobile phone, but the semiconductor industry is also paying attention to the release of the S18 mobile phone!
The high level of external attention did not affect Zhiyun Group's step-by-step preparations!
The supply chain is running at full capacity, and hundreds of production bases across the country have begun to work overtime 7 hours a day, 24 days a week!
The marketing department conducts various warm-up activities in markets around the world!
The major cooperating software manufacturers also received relevant software development information in advance and began to upgrade their software products. They are preparing to update their APP products simultaneously when the S18 mobile phone is released to adapt to the many new features of the S18 mobile phone.

Distributors from all over the world gathered in Shenzhen at the end of July to attend Zhiyun Group's annual distributor conference.

At the conference, many operators and first-tier channel dealers from various countries quarreled with each other for the early stock share, and at the same time they had to formulate exclusive marketing strategies for each region with Zhiyun Group.

Zhiyun mobile phones are aimed at the global market, and the initial stocking quantity for each market is different... But no matter what region it is, there will definitely be a rush to buy and a situation of supply exceeding demand in the early stage.

Therefore, one of the important tasks of these dealers every year is to obtain as many new mobile phones as possible... Especially for the cooperating operators in various countries, the new S series mobile phones are one of their main tools to compete for new high-net-worth users and stabilize existing high-net-worth users.

Every year when the S series mobile phones go on sale, operators in various countries will launch a series of package activities, and those who sign a package contract will receive a new Zhiyun mobile phone for free.

All conventional first-tier channel dealers also need to use the new S series mobile phones to attract traffic and win over or stabilize their numerous subordinate lower-level dealers.

However, Zhiyun’s new mobile phone stock is limited. In order to get more stock, this will test the ability and even courage of these operators and other channel dealers.

Ordinary people outside don’t know about these things.

Zhiyun Group’s new mobile phone is about to be released. What ordinary people feel is that there are more and more news about Zhiyun mobile phones on various content information platforms, whether it is traditional media, websites, or emerging short video apps.

However, in the industry, there are actually a lot of things going on, and as a result, there are many more foreign business people entering and leaving Shenzhen Airport recently.

At the end of July, Ji Chenghe, senior vice president of Zhiyun Group, arrived in Paris, France on a special plane... and started his global tour!

After arriving in Paris, Ji Chenghe held a high-level meeting with local senior officials and received a warm reception. During the high-level talks, Ji Chenghe discussed Zhiyun Group's subsequent investment plans in Europe and France.

They are so shameless that they praise the romance and freedom of the French as well as their good investment environment!
In short, it’s all about gaining favor in front of the French and flattering them in every way!

Afterwards, Ji Chenghe inspected Zhiyun Group’s largest R&D center in Europe: Zhiyun Paris R&D Center!
This is a large R&D center with more than 8,000 employees... Of course, the employees come from all over the EU, not just French.

Immediately afterwards, Ji Chenghe attended a business meeting in the local area, exchanged views with representatives of various local companies, and once again praised France in various ways during the exchange.

Ji Chenghe then went to Germany, where the process was basically the same: he met with high-level officials, inspected Zhiyun's local investment industries, exchanged views with the heads of major local companies, and finally visited the local automotive industry.

Ji Chenghe then went to Spain, mainly because there was a Spanish factory of Hai Lan Automobile there. After Xu Shenxue and the Spanish consortium had this relationship, they had a good relationship, so Ji Chenghe also went there to flatter it.

After praising Spain, they went to London. On the one hand, they praised the glorious history of the British, especially the great history of industrial development in the Victorian era. On the other hand, they praised the achievements made by the British in various fields, which made the British people so happy that their mouths were bent with smiles.

This has not been blown yet!
Ji Chenghe then stayed in Italy for two days. After enjoying the scenery for a while, he took a special plane to Brazil... Brazil is the main market for Zhiyun mobile phones in South America, and its sales are quite good.

After staying in Brazil for two days, Ji Chenghe went to Mexico and Canada and continued to promote his cause as usual!
On the other hand, Gu Zhiming, senior vice president of Zhiyun Group, appeared in Japan and talked about the importance of Japanese companies as Zhiyun's suppliers, boasting about the common growth history of Zhiyun and Japanese supply chain companies.

Afterwards, Gu Zhiming went to South Korea again... Although Zhiyun mobile phones have not had a good market share in South Korea, as the younger generation grows up, Zhiyun mobile phones' sales in the local market have gradually increased, and over the years, it has accumulated a large number of existing users.

South Korea has become the sixth largest market for Zhiyun smartphones, after China, Europe, Japan, India and Brazil.

Therefore, when a new mobile phone is released, it is necessary to send a heavyweight senior vice president of the group to show up and praise them.

These major markets are run by two heavyweight executives, Ji Chenghe and Gu Zhiming.

As for other secondary markets, or specific second- and third-tier countries in the EU, there will be group vice presidents, mainly local regional presidents, who will carry out high-frequency activities and mainly engage in all kinds of flattery!

Nowadays, when a new mobile phone is about to be released, it is still necessary to hype it up to customers appropriately.

For example, Gu Zhiming praised a lot in a technology forum in South Korea, which made many Koreans feel very happy!

You see, even the world's top multinational corporations have to praise us Koreans!
Their vanity is satisfied, and they also feel that the people at Zhiyun have done a decent job and given them enough face, so it is okay for them to buy a Zhiyun phone in return, as a reward for them!
In order to carry out marketing, Zhiyun Group has always been shameless and directly sends heavyweight executives to flatter consumers all over the world, making consumers in various countries feel comfortable.

Even Xu Shenxue, in an interview with European reporters, boasted about the close relationship between Zhiyun Group and Europe!

The European market is Zhiyun’s second largest market!
This has to be blown hard!
When it comes to making money, you can’t be too rigid!
(End of this chapter)