Rebirth 08: Rise from copycat phones

Chapter 547 The Explosive Growth of the Virtual Content Industry

As the market for smart terminals gradually becomes saturated, competition among major mobile phone manufacturers in the smart terminal business is becoming increasingly fierce.

Even a top-tier enterprise like Zhiyun Group began its business transformation several years ago. First, it promoted artificial intelligence on a large scale, and then it entered the intelligent robot business and virtual industry based on artificial intelligence technology. Of course, it also supplied various computing chips to external parties on a large scale.

Computing chip business, intelligent robot business, and virtual industry have become important growth drivers for Zhuyun Group in recent years, gradually reducing its strong dependence on intelligent terminal business.

This has allowed Zhuyun Group's revenue to continue its rapid growth from a scale of four to five hundred billion US dollars to its current scale of seven hundred billion US dollars.

Therefore, Zhuyun Group is no longer a mobile phone manufacturer or smart terminal manufacturer in the conventional sense, but a high-tech enterprise with semiconductor design and manufacturing and artificial intelligence technology as its core!

The successful transformation of Zhiyun Group has also provided great inspiration for other high-tech manufacturers!

Although Zhiyun Group is very powerful and can do many things that other companies cannot... it can still imitate some things and make some low-to-mid-range products, right?
For example, many high-tech companies are already working on robotics... but it's too difficult and requires very high levels of artificial intelligence technology. If you're going to do this, you either don't do it at all, or you have to reach a level of 80 or 90 points... It can be a little worse than Zhiyun's robots, but it can't be too much worse, otherwise, the robots are useless.

Unfortunately, the robots developed by major high-tech companies are only at a technical level of a dozen points... It's really impossible to make them.

Google and Apple are two overseas companies that are most enthusiastic about the robotics business, but they just can't seem to make it work... and their technology is even inferior to some domestic startups engaged in the robotics business.

Over the past two years, the robotics sector in China has been a very hot investment area, with a large number of startups emerging, many of which are doing quite well.

Using several open-source AI models from Zhiyun Group, especially a previously open-source robot big data model, and with Zhiyun Group's publicly available APO graphics cards, they were able to create a pretty good robot dog... Although it is still far from reaching the level of Zhiyun robots, it is still at a level of 20 or 30 points.

But the robots from Fruity and Google are even worse...only scoring in the teens!
The robotics business is incredibly difficult; it's either a sure thing or it's a sure thing. There's simply no low- to mid-range market to speak of...

However, the virtual industry is different; the entry barrier for this industry is relatively lower!
Even if we can't make an omnidirectional treadmill, it's still possible to make VR glasses, and use them with a keyboard, mouse, or joystick to achieve a highly immersive experience. It's also possible to make VR glasses and play virtual technology without blinking... This is the technological roadmap that Google, Apple, and some domestic companies are promoting.

If we set aside the omnidirectional treadmill that requires top-tier artificial intelligence technology, and simply develop a VR device with better performance that supports physical simulation technology, the possibilities are actually quite significant!
Now, Vcool Electronics also wants to enter the virtual equipment field and make VR virtual equipment... not the omnidirectional treadmill kind.

Then they will focus on the low-to-mid-end market...

After all, while Zhiyun Group's virtual equipment is excellent in many ways, it's expensive... Most people simply can't afford virtual equipment that costs hundreds of thousands of dollars.

At this point, if a VR virtual reality device priced at tens of thousands or even hundreds of thousands of yuan can be launched, then the chances of success will be very high.

Although the virtual experience isn't great, at least you can enter the virtual world... at least you can see it.

Bai Qiwen, CEO of Vcool Electronics, described in detail Vcool Electronics' plans for VR virtual devices to Xu Shenxue.

"We plan to develop a VR headset that can be used with remote control or mouse and keyboard operation. This will significantly reduce the technical requirements for artificial intelligence. We can achieve a certain level of technical capability by using the open-source artificial intelligence model from Zhiyun!"

"On the hardware side, we have already contacted Huaxing Technology, and they have indicated that they can supply our company with fifth-generation VR glasses displays next year. The graphics cards used for display can also be X5 graphics cards, and for the core computing center module, we plan to use an entry-level 16GB APO4500M graphics card as the core!"

"Because we don't need an omnidirectional treadmill, nor a large number of sensors, and the computing power requirement is relatively low, we can use a low-end APO4500M/16GB graphics card. This allows us to significantly reduce costs, and we expect to be able to bring the price down to under 100,000 yuan!"

The APO4500M graphics card that Bai Qiwen mentioned is a new type of computing card launched by Zhiyun Group in the first half of the year for the mid-to-low-end computing card market.

Although the product number starts with APO4500, seemingly indicating an APO4500 graphics card series, it actually has an "M" at the end, meaning its performance is far inferior to that of the APO4500 graphics card.

The main differences are in the packaging method and the video memory.

The APO4500 graphics card uses a 12-nanometer process and 2.5D packaging technology. It uses second-generation HBM2 memory. There was a 40GB version in the early days, but now only the 80GB version is available... and the price is getting more and more expensive. In the first half of the year, this graphics card could be bought for 70,000 to 80,000 yuan!
It's around 100,000 now!
Because this graphics card was widely used by the virtual equipment business within the Zhiyun Group starting in the second half of this year, it became a case of supply falling short of demand... Under such supply and demand imbalance, the price naturally rose.

In order to address the insufficient production capacity in the low-to-mid-range computing card market, Zhuyun Semiconductor launched the APO4500M graphics card in August this year.

This graphics card has the same GPU core as the APO4500, but it uses the earlier first-generation HBM2 memory, making it cheaper and more powerful.

Most importantly, this graphics card does not use 2.5D packaging, but instead adopts the traditional BGA packaging mode!

This not only significantly reduced costs, but also eliminated the core limitation restricting the production capacity of the APO4500 graphics card: 2.5D packaging technology.

As is well known, the reason why the production capacity of APO series graphics cards from Zhiyun Group is insufficient is purely due to the lack of advanced packaging capacity.

Under such circumstances, Zhuyun Group gritted its teeth and used the previously obsolete BGA packaging again... turning back the clock!

Unfortunately, the production capacity for 2.5D and 3D packaging is insufficient, and it is difficult to expand on a large scale in the short term. Even if it is expanded, it will still not be enough. In order to meet market demand, we can only use outdated technologies.

After all, there is plenty of mature packaging capacity for BGA packaging. Zhiyun Microelectronics has a lot of capacity for this technology. If it is not enough, it can find other packaging factories in China or even overseas to do the contract packaging. I dare not say that there is enough of this type of packaging, but it is definitely enough.

This completely solved the production capacity limitation... Of course, due to various downgrades and the use of outdated technology, although the GPU core is still the APO4500 GPU core, the performance of the APO4500M graphics card has inevitably been greatly reduced, especially in terms of memory bandwidth and interconnect communication speed... And these two key data are crucial data for training artificial intelligence.

Training AI with an APO4500M graphics card isn't great, but it's passable... At least it's fine for local deployment of GTAI, and its computing power for supporting virtual devices is barely adequate.

And although the performance has also decreased, the most important thing is that the price has also decreased. The 32GB version can be bought for around 40,000, and there is also a 16GB version, which is even cheaper, around 15,000... It's rare for Zhiyun Semiconductor to do something so kind and launch such an affordable computing card to the market.

This low price makes it affordable for many startups, micro-enterprises, and even individual enthusiasts to run open-source artificial intelligence models.

Therefore, this low-end product, which was launched in August this year, has sold quite well.

Vcool Electronics is also planning to use this graphics card for its virtual machine equipment project... because it's cheap!

As for the better APO4500 graphics card, they know it's better, but they can't afford it... It costs over 80,000 yuan a card, and this graphics card doesn't even offer a low-end version, there's only an 80GB version!

The 80GB high-end version of the APO4500 graphics card is in high demand because it is used in the virtual machine equipment of Zhiyun Group, which directly leads to a shortage of supply. Naturally, it is impossible to use the production capacity to produce the low-end version with a low price and low profit.

However, the shortage of APO4500 will not last long, after all, Zhuyun Group's advanced packaging capacity has been expanding!
It is expected that by next year, Zhiyun Microelectronics' 2.5D packaging capacity will see a significant increase to meet the production needs of APO4500 graphics cards, EYQ series, ZY series, and other computing chips.

However, the production capacity of the more advanced generation of 3D packaging is relatively small and difficult to expand, so the capacity shortage is expected to continue for a long time.

Therefore, Zhiyun Group is now adopting a three-pronged approach in the packaging of computing graphics cards:

The first approach is to go against the grain and use BGA packaging in low-end products. Although the performance is slightly worse, the production capacity is extremely abundant and the price is cheap, which can meet the needs of the low-end market. This card is inexpensive and good value for money, with the cheapest 16GB version costing only 15,000 yuan and the more expensive 32GB version costing just over 40,000 yuan.

The second is the APO4500 graphics card, which uses 2.5D packaging and has expanded production capacity. This is mainly to meet the production needs of virtual machine equipment within the group. However, if it is sold externally, the price has soared to over 100,000, and it is difficult to obtain large quantities of goods.

The third is the APO5000 graphics card and the expected future 5nm graphics card APO6000. These advanced graphics cards all use the most advanced 3D packaging... mainly to meet the needs of the group's computing center for its own use, some institutional customers, and also used in flagship virtual equipment models.

At the same time, it is also supplied in bulk to large enterprise customers for training and running artificial intelligence... This graphics card is also the most expensive. Zhiyun itself supplies it in bulk, and it costs more than 200,000 yuan.

In the Huaqiangnan market, the price of APO5000 graphics cards continues to rise, and many vendors are now asking for 300,000 yuan.

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Vcool Electronics uses the entry-level computing card APO4500M, and it even has 16GB of memory, which significantly reduces the cost of computing power.

As for the graphics card, the X5 is the obvious choice, costing over ten thousand yuan... There's no way to go for a low-end configuration, because currently only this gaming graphics card supports the Zhiyun Physics Simulation Engine's physics simulation effects and a series of other special effects technologies.

The CPU chip used is the WZ305, a previous-generation mid-range server CPU from VIGAL Technology. It uses a 10nm process and has decent performance, but its power consumption is a bit high… However, this chip is now cheaper, and end-users aren't too concerned about power consumption. As for other chips, the important and expensive ZY chip was completely abandoned… Since there's no need for a universal treadmill anymore, there's no need to collect large amounts of sensor data.

Since there is no data, there is naturally no need for the ZY series chips specifically designed to process massive amounts of sensor data.

Not using the ZY chip will save a lot of money, since the ZY series chips are also very expensive. Zhiyun Semiconductor's internal supply price to its sister companies is 30,000 to 40,000 yuan per chip. Now that we don't use this chip, we can save a lot of costs.

Then there are memory chips, flash memory chips, and other auxiliary chips; these common chips are not too expensive.

These days, apart from the computing power chips produced by Zhiyun Group, which are extremely expensive with an outrageous profit margin of 80% or 90%, other ordinary chips are generally not too expensive.

After various simplifications, Vcool Electronics believes they have the potential to develop an entry-level VR virtual reality device priced under 100,000 yuan, and even hope to keep the price under 70,000 to 80,000 yuan.

Bai Qiwen expressed great confidence in the project: "Chairman Xu, in the past six months, we have organized a lot of manpower and resources to conduct detailed research on VR virtual equipment!"

"At the same time, we can confirm that the supply chain is mature, so if we enter the market now, we will not encounter any supply chain problems!"

"In terms of hardware, it is possible that we can produce a VR virtual screen joystick control device by next year, probably before next fall!"

"However, we still have a problem, which is the ecological problem!"

"While it's technically possible for us to build our own virtual operating system, it would be extremely difficult. Moreover, we don't have the capability to build a top-tier virtual world like Zhiyun Virtual World. Furthermore, we would have to consider the ecosystem issues of virtual games!"

While looking at the documents and listening, Xu Shenxue asked, "You want to connect your VR virtual reality devices to Zhiyun Virtual World and use Zhiyun's current virtual content ecosystem?"

Bai Qiwen said, "We do have this idea. Weiku Electronics and Zhiyun, two sister companies, can follow the cooperation model of systems and ecosystem content in the field of smart terminals. We hope to use Zhiyun's virtual operating system and introduce Zhiyun's virtual software store to share the content ecosystem."

"In the future, Zhiyun will focus on the mid-to-high-end market, while we at Weiku Electronics will focus on the mid-to-low-end market, and we will also target other manufacturers' low-end VR virtual machine products!"

Xu Shenxue said, "That's a good idea!"

The relationship between Zhiyun Group and Vcool Electronics is very close. Even after multiple rounds of financing and listing, Zhiyun Group still holds 20% of Vcool Electronics' shares... not to mention that Vcool Electronics' major shareholder is Liuhe Investment.

Both of these companies are under Xu Shenxue's control, so it's only natural that they would engage in strategic cooperation.

Xu Shenxue also learned that companies like Guoshi and Gugou were also developing VR virtual reality devices... and their approach was similar to that of Weiku Electronics.

This allows Vcool Electronics to squeeze them out of the low-end market, while also better protecting the virtual machine equipment business of Zhiyun Group, which focuses on the mid-to-high-end market.

Furthermore, with the addition of Vcool Electronics, the virtual content ecosystem built by Zhiyun Group can continue to expand, bringing in more virtual users.

This is also of great help to Zhiyun Group's entire virtual business... The virtual business is quite special. It not only makes money by selling equipment, but also has great potential in the content field... Zhiyun Virtual World can generate a lot of revenue just by selling advertising, renting out virtual properties, and collecting various service fees, and there is also revenue sharing from virtual content distribution channels.

Although there aren't many now, that's during the market cultivation period... Once the market is cultivated and the stock of virtual devices increases, the revenue from Zhiyun Virtual World and Zhiyun Virtual Software channels will be very substantial.

Finally, a comprehensive ecological moat can be constructed...

The virtual industry is ultimately a content industry, and the ecosystem is very important in the content industry.

Therefore, Xu Shenxue is inclined to allow Zhiyun Group and Weiku Electronics to continue their in-depth cooperation in the virtual field.

Besides the virtual equipment business, Bai Qiwen also wants to make smart electric vehicles... mainly because other manufacturers, such as rice, Huawei, fruit and other companies are also making smart electric vehicles, and even several domestic Internet companies are involved in the field of smart electric vehicles.

Vcool Electronics is no exception and has also made its own plans. Last year, it started a smart electric vehicle project, but it is very difficult to manufacture cars!
Xu Shenxue also supports Vcool Electronics' car manufacturing plan!
The smart electric vehicle industry is booming, with many new electric vehicle manufacturers emerging, and Vcool Electronics is no exception.

If Vcool Electronics wants to get into smart electric vehicles, it will mainly focus on the low-to-mid-range market... it won't be able to break into the high-end market.

Unfortunately, apart from Hailan Auto, no other smart electric vehicle company on the market can compete in the high-end market...

With a top-tier company like Hailan Auto suppressing the market, even Tesla has abandoned the high-end market and is now focusing on the mid-range market of 200,000 to 300,000 yuan.

A large number of domestic electric vehicle companies are focusing on electric vehicles priced around 100,000 yuan... If the price is above 200,000 yuan, Hailan Auto's YEV only starts at 250,000 yuan. What makes you so confident that you can compete head-on with Hailan?

It doesn't even have L3 assisted driving... let alone L4 level autonomous driving.

If Vcool Electronics wants to get into electric vehicles, it will mainly focus on the price range of around 100,000 yuan... After all, even though it is a sister company, Vcool Electronics can't expect to get the autonomous driving technology from Hailan Auto. It would be too difficult for Vcool Electronics to develop its own technology. It would be much easier to develop an L2+ assisted driving system.

However, for cars priced over 100,000 yuan, if the exterior is made more attractive and the price-performance ratio is improved, there is still a market for them; at least the Vcool Electronics brand is there...

After finishing his conversation with Bai Qiwen, Xu Shenxue returned to the headquarters of Zhiyun Group and met with Xiao Mincai from the Software and Internet Business Division of Zhiyun Group... They discussed the cooperation between Weiku Electronics and Zhiyun Group in virtual operating systems and virtual content ecosystems, which Xiao Mincai naturally welcomed.

He has high hopes for the 'Smart Cloud Virtual World' that is deeply integrated into the virtual device operating system, and naturally hopes that the number of users will increase.

Soon, Bai Qiwen and Xiao Mincai also had a formal private discussion and reached some basic cooperation agreements.

Zhuyun Group and Vcool Electronics have officially begun detailed negotiations on cooperation in the virtual industry sector!

Although they are sister companies, they are two interest groups, and each is a listed company. In principle, although they cooperate, they still need to fight for various interests.

Even close brothers should keep clear accounts!
Soon, the negotiating teams from both sides reached an agreement and officially announced it to the public.

The announcement has attracted the attention of professionals in the virtual industry, game enthusiasts, and even ordinary people.

After Vcool Electronics and Zhiyun Group reached a strategic cooperation in the virtual business, Vcool Electronics officially announced its 'VR Virtual Device' plan, and in the plan, it shouted the slogan that most people can experience the virtual world.

Just by hearing this slogan, you know that Vcool Electronics' VR virtual reality devices will be relatively cheap... Otherwise, how could most people use them if they weren't cheap?

The question now is, just how cheap is it?
This is of great concern to the outside world, game enthusiasts, and industry insiders... especially fruit!

They also attach great importance to the research and development of VR virtual devices, and the research and development is progressing smoothly. They expect to launch the first generation of products next year... At this time, a company called Vcool Electronics emerged, and it is also making VR virtual devices.

This made them feel a sense of crisis!
Meanwhile, other companies that are developing VR virtual reality devices are also extremely vigilant!

Zhuyun Group is not afraid... because the two are not in the same field. No company has tried to challenge Zhuyun Group in the high-end virtual equipment market; they don't have the ability.

However, Vcool Electronics is different. This company's VR virtual technology approach is highly similar to theirs, and it is also likely to focus on the low-end market, which poses a threat.

Compared to the vigilance and concerns of VR virtual equipment manufacturers!

Virtual content creators are very happy and even excited about this!

This means that the number of virtual devices will continue to grow, and the number of users of their virtual content, especially virtual games, will also increase...

The virtual content market may be poised for a super boom next year!

In response, several large domestic internet companies, including Yihai Technology Group, as well as some second- and third-tier internet game companies and even overseas game companies are all eager to make a fortune next year!
(End of this chapter)