Rebirth 08: Rise from copycat phones

Chapter 661 Technology Changes Lives, Industry Changes Wallets
In April, Xu Shenxue's private plane appeared in Tongcheng again.

After getting off the plane, Xu Shenxue took a car and drove away from the airport, looking at the tall buildings on both sides of the road.

The Tongcheng before him had undergone tremendous changes since his first visit.

When Zhiyun Group acquired the local foreign-owned semiconductor factory, Xu Shenxue came here for the first time and saw that it was just an ordinary third-tier city. Although its overall development was acceptable at the time, it was not particularly good.

But now, just by looking at the wide roads and numerous high-rise buildings along the way, it's clear that Tongcheng has developed very rapidly in recent years.

We had to act quickly, because the headquarters of Zhuyun Microelectronics, a core subsidiary of Zhuyun Group, was located here... not just the administrative headquarters, but also the R&D headquarters and manufacturing base.

Today, Zhiyun Microelectronics is the world's most technologically advanced and largest semiconductor manufacturing company in terms of production capacity.

In logic chip technology, it has already surpassed TSMC, and far outperformed Samsung and Intel. The N4 process currently in mass production is the most advanced mass production process in the world, not to mention the N3 process that Zhuyun Microelectronics started small-scale production this month... The N3 process is highly anticipated, using an equivalent three-nanometer process with double exposure of EUV lithography machine.

In terms of logic chip scale, Zhiyun Microelectronics accounts for 70% of the global production capacity in advanced processes below 7 nanometers, while the rest is divided among TSMC, Samsung Semiconductor, Intel, and SMIC in China.

In the more advanced equivalent 5nm process nodes (including the N4 process), Zhuyun Microelectronics has a higher capacity share, reaching about 85%, while TSMC accounts for the remaining 15% of the capacity...

As for the N3 process that Zhiyun Microelectronics has just started mass production, it is currently the only one of its kind in the world. TSMC's three-nanometer process is still in the technology verification stage, and it is estimated that it will take another two or three months before it can be mass-produced on a large scale.

The reason why Zhiyun Microelectronics has such a large logic chip production capacity is actually very simple: Zhiyun Group itself has a huge demand for advanced process chips!
The S-series and W-series mobile phone SOC chips occupy the vast majority of the global market share, while the CPU chips occupy approximately 30% of the global market share.

Zhuyun Group, which occupies more than 80% of the global graphics card market, has three independent graphics card brands. One is the NVIDIA brand acquired by Zhuyun, which focuses on the consumer gaming market, with its flagship product being the X-series top-of-the-line gaming graphics card. The other is Zhuyun's own AP brand, which focuses on low-power laptop discrete graphics cards and design graphics cards.

Finally, there's the renowned APO series graphics cards, dedicated computing cards primarily targeting the field of artificial intelligence.

Then there are various computing power chips that monopolize the market, including the APO series graphics cards, which can also be classified as graphics cards, the ZY series data processing chips, the EYQ series general-purpose computing power chips for large terminals used by the company, the EYEQ series general-purpose computing power chips for large terminals sold abroad, the PX series open general-purpose terminal computing power chips, the L series general-purpose computing power chips for light terminals, and a whole bunch of other miscellaneous computing power chips.

The global demand for advanced logic chips is actually created by Zhiyun Group... In particular, many terminal products of Zhiyun Group or its sister companies use these advanced chips, most notably smart terminals, smart electric vehicles, virtual devices, and smart robots...

The annual shipment volume of ZY series chips, which are specifically designed for big data, reaches tens of millions... These are high-end chips with an internal procurement price of tens of thousands of yuan per chip.

There are also APO series graphics cards, which are used internally and exported, including for use in virtual machines, with annual shipments exceeding 15 million units.

The EYQ series computing chips are used in two major products: intelligent robots and Hailan automobiles, with an annual shipment of tens of millions of chips.

The EYEQ suite of solutions drives tens of millions of EYEQ chip shipments annually.

Even PX chips have an annual shipment volume of several million units.

The huge demand for various advanced logic chips, both for internal use and external sales, has directly driven the massive production capacity needs of Zhuyun Microelectronics...

Without such a large demand for advanced chips, Zhiyun Microelectronics would have lost a fortune by building such a large-scale production capacity of chips below seven nanometers... because apart from Zhiyun Group itself, there is simply no other customer with such a large demand for advanced chips.

In addition to logic chip manufacturing, Zhiyun Microelectronics also has a much larger storage chip production capacity... Zhiyun Group's two storage chip subsidiaries, Zhiyun Storage and Jiangcheng Storage, as well as storage chips from acquired German and Japanese brands, are all manufactured by Zhiyun Microelectronics' storage chip factories...

However, Zhiyun Microelectronics' storage chip manufacturing business is mainly concentrated in Jiangcheng, with less in Tongcheng. The factory built there is a high bandwidth memory chip (HBM) factory, which is mainly used to support AI computing cards such as the APO series graphics cards.

Zhiyun Microelectronics, whose headquarters are in Tongcheng, has its largest R&D center and largest manufacturing center in Tongcheng.

Then, Zhiyun Microelectronics also partnered with local universities to establish one of the world's top semiconductor schools, and even one of the world's top schools to date.

This has brought tremendous impetus to the development of Tongcheng.

Zhiyun Microelectronics alone has created nearly 50,000 direct jobs for the local area... and all of these 50,000 jobs are high-paying jobs!
Even the workers who tighten screws in the semiconductor factories of top semiconductor companies like Zhiyun Microelectronics need to have a bachelor's degree from a 211 university or higher... The semiconductor industry itself is a talent-intensive industry that treats PhDs like beasts of burden.

In addition to providing high-paying direct employment, Zhiyun Microelectronics also brings huge tax revenue to the local area. Zhiyun Microelectronics has very high revenue and good profits, and its tax contribution is also very large.

How important is Zhiyun Microelectronics to the local area? A set of data can illustrate this simply: Zhiyun Microelectronics' revenue accounts for about 70% of Tongcheng's GDP, its exports account for 95%, and its tax contribution accounts for 58%!

The economic boost that world-class companies can have on a city is extremely strong...

In addition, the local government has leveraged Zhiyun Microelectronics to establish a series of semiconductor talent and manufacturing supply chains, and has vigorously attracted and cultivated other semiconductor-related industries, including semiconductor design, semiconductor equipment, and consumables.

Several important factories under Fairy Mountain Holdings are actually located in Tongcheng... close to Zhiyun Microelectronics, making research and development and cooperation more convenient.

Thanks to the semiconductor industry, Tongcheng's local economy has taken off rapidly over the past decade!

Ten years ago, the city's economy was just average, but now, although the city's population is not large, its total economic output is quite good, and its per capita GDP has even surpassed that of several well-known first-tier cities.

Because it is the world's top semiconductor manufacturing capital, supplying more than 50% of the world's advanced logic chip production capacity below 7 nanometers!

Among them, the APO6000 graphics card, which is of utmost importance to AI professionals worldwide, is produced here with 80% of its capacity... This is because the vast majority of the N4 process capacity of Zhiyun Microelectronics is located in Tongcheng, and the APO6000 graphics card uses the N4 process.

The APO6000 graphics card is not only a core product of Zhiyun Group in the field of artificial intelligence infrastructure, but also a high-tech symbol of this city!

How can we describe the current importance of Tongcheng?

If this city experiences a power outage, the prices of advanced logic chips worldwide will skyrocket... The resale value of the APO6000 could instantly soar!
Of course, since Zhiyun Microelectronics settled in the area, there has never been a problem with its power supply.

In the early years, when there was a lot of construction going on across the country, power shortages were caused and many cities were implementing industrial power restrictions. However, Tongcheng preferred to restrict residential power consumption in order to prioritize the power supply for the semiconductor factory under Zhiyun Microelectronics.

Because such top-tier semiconductor factories cannot afford power outages... If even a minor unexpected power outage were to affect most of Zhiyun Microelectronics' semiconductor factories in the area, the losses would start at several billion dollars, and a large number of advanced and expensive chips being manufactured would be instantly scrapped.

Even with a planned power outage, the losses from a day's production stoppage are astronomical... Semiconductor factories operate non-stop, except for planned maintenance periods, practically running 24/7...

Because semiconductor factories, which are built with hundreds of billions of dollars at a time, also incur astronomical daily equipment depreciation costs!

Therefore, it is impossible for Zhiyun Microelectronics to experience a power outage...

Zhiyun Microelectronics, along with a host of semiconductor equipment and consumable companies surrounding it, a plethora of other semiconductor design firms, and numerous other businesses along the semiconductor supply chain, have made the local area incredibly wealthy from the semiconductor industry…

Furthermore, the semiconductor industry has brought in a large number of direct and indirect employees, which in turn has driven the rapid development of the tertiary sector, namely various service industries.

Even local people from the lower and middle classes can enjoy significant benefits during this process...

And all of this has ultimately manifested in what Xu Shenxue sees now: the whole city looks quite beautiful, with wide roads, excellent greenery, and a lot of high-rise buildings.

In many aspects, it even outperforms major cities like Shenzhen and Shanghai!
This place, though not large and with a small population, has a very high GDP per capita, even higher than that of first-tier cities.

After all, they manufacture advanced chips... that's a very profitable industry!
This is the enormous impact that advanced industries have on a local economy, on people's income, and on their living standards...

Technology changes lives, industry changes wallets!

Xu Shenxue was quite happy to see this.

Running a business and developing technology isn't simply about making money; at least for him, money has lost its practical significance.

Now, Xu Shenxue's pursuits are no longer limited to money... there are far more to it than that.

Now Xu Shenxue needs to focus more on things that are more exciting, such as the competition itself. Competing with foreign conglomerates is a very challenging and fulfilling thing.

It's similar to playing a video game; you try every means to defeat monsters and reap rewards... It's very fulfilling.

On the other hand, the fact that his success has influenced others and brought a better life to many ordinary people also brings Xu Shenxue great psychological satisfaction.

When poor, one should cultivate one's own virtue; when successful, one should benefit all under heaven!
Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

The convoy continued its journey and then arrived at the 32nd Factory, an important factory under Zhiyun Microelectronics that Xu Shenxue had visited several times before.

This factory is currently the most technologically advanced and largest-investment logic chip factory under Zhiyun Microelectronics.

The factory has a large production capacity for N5 and N4 processes and is currently an important base for the Zhiyun Group to produce APO6000 series graphics cards and S series chips.

More importantly, the factory also has the world's only advanced chip production line that uses dual EUV exposure, which can meet the manufacturing requirements of equivalent three-nanometer process... In other words, it has the only equivalent three-nanometer process production line in the world to date.

Ding Chengjun explained to Xu Shenxue, "Our N3 production line has already started small-batch production, and we are continuously making technological improvements while producing!"

"At the current small-batch production stage, the yield rate can be maintained at 72%, which is sufficient for large-scale production of various chips, and the cost is controlled at an acceptable level!"

"Next, we will continue to improve the process while maintaining small-batch production, and strive to further increase the yield to 75% after June, which will then be used for large-scale production of S1303 chips!"

The S1303 chip, which is the flagship chip that Zhiyun's new generation S22 mobile phone will use this year, is manufactured using an equivalent three-nanometer process.

"Currently, we have two N3 production lines with a designed capacity of 50,000 wafers per month. At the same time, our third N3 production line is under construction and is currently in the equipment debugging stage. It is expected to be put into mass production as early as August. At that time, our N3 process capacity will increase to 75,000 wafers per month!"

"At the same time, we also have two N3 production lines under construction at our production base in Shenzhen. They are expected to be put into production in November this year and February next year, respectively. The combined designed capacity of these two production lines is 50,000 pieces per month!"

"That means that by February next year, we will have a monthly N3 process capacity of 125,000 wafers!"

"This production capacity, in addition to initially meeting the needs of the S1303 chip, can be used for the large-scale production of GPU cores for the APO7000 graphics card, the new generation ZY50 processing chip, the EYQ8 chip, the GPU cores for the X6 graphics card, the WZ400 series in server CPUs, and the L-series CPUs required for new computer systems, and other advanced chips!"

"As the shipments of various advanced chips gradually increase, such as the S1303 chip being used in more models starting next year, the W series flagship chip also starting to adopt the N3 process, the consumer-grade x86 instruction set CPU also using the three-nanometer process, and other computing power chips also being upgraded to the three-nanometer process, more three-nanometer process capacity will be needed!"

"In addition, there is some demand for external OEM manufacturing!"

"To this end, we have already started building more 3-nanometer process capacity in Tongcheng and Shenzhen. It is expected that by the end of next year, our N3 capacity will increase to 175,000 wafers per month, and by the spring of the year after next, our N3 process capacity will increase to 200,000 wafers per month!"

"This production capacity is expected to meet our internal needs for the next few years, while also providing some contract manufacturing capacity to external clients."

"Our advanced capacity investment plan at Zhiyun Microelectronics has been largely shifted to the three-nanometer era and the future two-nanometer era. As for the five-nanometer and seven-nanometer process nodes, we will temporarily stop capacity expansion after the existing capacity under construction is completed and put into operation!"

"Because our group's demand for advanced chips will shift to the three-nanometer era on a large scale in the next few years, a large amount of five-nanometer and seven-nanometer process capacity will be freed up to meet the production needs of other second-tier products, and we will be able to provide a large amount of foundry capacity to external parties!"

"In the short term, our existing and planned production capacity for the 5nm and 7nm process nodes is sufficient!"

Xu Shenxue is no longer interested in 7-nanometer or 5-nanometer process nodes... although these are still the main processes and remain among the world's top processes.

Now he is concerned about three nanometers and the future two nanometer process... Putting aside the future two nanometers, this three nanometer process node is still very important.

A large number of advanced chips are expected to use this process.

The APO7000 series graphics cards are particularly important. These cards are not only expected to be sold on a large scale, bringing the anticipated huge revenue to the Zhiyun Group.

At the same time, it is also the core equipment of the second-generation YANC system, a new generation of integrated computing power center for internal use within the Zhiyun Group.

The second-generation YANC system will be composed of three top-tier computing powers: a sixth-generation superconducting quantum computer, a second-generation neuromorphic computer, and an APO7000 graphics card. At that time, the total computing power provided by the second-generation YANC computing unit will be greatly increased, the cost per unit of computing power will be greatly reduced, and the power consumption per unit of computing power will also be greatly reduced!
The second-generation YANC system is of paramount importance and is directly related to the next generation of artificial intelligence development for Zhiyun Group.

The APO7000 graphics card, which is used in our own production, is a key component that cannot be compromised.

Currently, the N3 process chips being produced in small-scale batches at Factory 32 contain the GPU core of the APO7000 graphics card.

The manufactured GPU core will be packaged together with fourth-generation HBM memory using the most advanced 3D packaging technology to form the APO7000 core that people can see. With the addition of other components, such as power supply and cooling fan, the APO7000 graphics card that Xu Shenxue sees now is finally formed!

Moreover, it is a self-use version of the APO7000 graphics card, with a video memory of 240GB, ultra-large data communication bandwidth, and very high computing power.

Only such top-tier graphics cards can be compatible with the second-generation YANC system!

(End of this chapter)