Rebirth 08: Rise from copycat phones

Chapter 675 Research and Development and Manufacturing are the Core
Xu Shenxue's inspection tour lasted for more than ten days, and he traveled to many cities, mainly to see the R&D centers or manufacturing plants located in various places.

Regarding R&D centers, we mainly look at the R&D centers under Zhuyun Group and Fairy Mountain Holdings, especially since Zhuyun Group has many R&D centers in different locations.

Zhiyun Group currently has over 900,000 employees worldwide, and it is estimated that the number of employees will exceed one million in a few years.

Of the current 900,000 employees, the vast majority are technical staff, while the proportion of routine clerical staff such as administrative and marketing personnel is relatively low.

Among the large number of technical employees, a significant portion are research and development staff.

Zhiyun Group has established dozens of R&D centers of various types around the world, most of which are concentrated in China. Zhiyun Group has R&D centers not only in first-tier cities, but also in second-tier cities. In particular, some second-tier cities with outstanding education are the focus of Zhiyun Group's layout, so as to give full play to the local educational advantages.

When Xu Shenxue went to inspect a place, he would often also visit these R&D centers to see the progress of their projects and whether they had come up with any strange or wonderful things.

More importantly, it was to continue to demonstrate his emphasis on research and development.

From the very beginning, Zhiyun Group has been a high-tech industry driven by research and development... and in the production process, it outsources as much as possible, while some important components are produced by holding companies or holding shares, such as Huaxing Holdings in the screen industry.

Only a few core industries use wholly-owned subsidiaries for manufacturing... such as semiconductor manufacturing, quantum computer manufacturing, and a small number of core materials and components.

Basically, in the production field, we outsource whenever possible, hold shares whenever possible, and take control whenever possible. Only when all else fails will we take matters into our own hands!
This is so that more resources can be concentrated on research and development.

They continuously develop new technologies and launch new products to generate huge revenues and profits, and then use those profits to support high-investment research and development.

This is the main business model of Zhiyun Group, a model that is known to everyone in the world, but most business people shake their heads at it and dare not imitate it at all.

Because if you dare to imitate, you dare to go bankrupt.

The business risk is too high!
However, Zhiyun Group is thriving and growing larger, which is the main reason why it has attracted many business scholars around the world to conduct research. Unfortunately, the research has been of little use... Even though many scholars have developed some logically consistent theories, they are actually useless.

This might work in a small company, but doing it in a big company would require you to be incredibly skilled...

What outsiders say is not important; what is important is that Xu Shenxue continues to firmly promote this approach within the group, and even incorporates this business model into the corporate culture.

Xu Shenxue also frequently inspected these R&D centers to demonstrate his emphasis on R&D.

In addition to inspecting various R&D centers, Xu Shenxue also visits various factories... This time, he doesn't just visit the few high-tech factories of Zhiyun Group, but rather the factories of several companies under his control.

Xu Shenxue owns a large number of manufacturing companies, mainly including Weiku Industrial Group, Hailan Automobile Group, Zhiyun Microelectronics Technology Co., Ltd., and Fairy Mountain Holdings. These companies have a large number of factories producing various products.

Vcool Industrial Group is currently the largest OEM manufacturer in China and globally, mainly producing various electronic consumer products.

Most of the smart terminals and computer products of Zhiyun Group and Vcool Electronics are manufactured by Vcool Industrial, which in turn undertakes OEM business for many domestic and foreign companies.

Its OEM business mainly focuses on various smart terminals, such as smartphones, as well as computer products, and it has a large customer base.

In addition, it also manufactures intelligent robots and virtual devices on behalf of Zhiyun Group. However, the intelligent robot products under Hailan Automotive Group are manufactured by itself and do not use contract manufacturers. Hailan Automotive Group is a car manufacturing company with strong manufacturing capabilities and does not need to use contract manufacturers.

Weiku Industrial Group has more than 400 production bases/factories across the country. During peak production seasons, it employs more than 1.8 million people, making its workforce quite impressive.

VK Group is the company with the largest number of employees in China and ranks second in the world, second only to retail giant Walmart.

Of course, the number of employees at VK Industries Group fluctuates seasonally. There are many employees during the peak production season, while the number of employees decreases significantly during the off-season in order to control costs. But even when there are fewer employees, the number of employees is still generally over 1.5 million, ranking third in the world.

Besides Weiku Industrial Group, a manufacturing giant, Xu Shenxue also has many other companies with a large number of manufacturing employees.

For example, the Hailan Automobile Group has a considerable number of manufacturing workers.

Hylan Automotive Group has a global production capacity of five million vehicles, used to produce vehicles under its four brands: Hylan, Ella, Mite, and Waygod.

Meanwhile, Hailan Automotive Group also has a large-scale solid-state battery production capacity, LiDAR and other automotive parts production capacity, and is now expanding its intelligent robot production capacity.

In addition, Hailan Automotive Group has a large sales and after-sales service network and charging stations worldwide.

This is a comprehensive high-tech enterprise integrating R&D, manufacturing, sales and service.

The key point is that in the process of automobile production, Hailan Automobile Group does not simply assemble vehicles, but also researches and produces many core components, such as motors, batteries and other subsystems.

Although it is not a fully vertically integrated production model, it is still a model of independent research and development and control of core components. Therefore, it is involved in many aspects of automobile manufacturing, which in turn leads to a large number of workers.

The number of employees at Hylan Automotive Group has now exceeded 600,000 worldwide.

Inspecting Hailan Automobile's factory was also an important part of Xu Shenxue's itinerary. However, he saw some basic problems during his inspection in Chuancheng, which made him very unhappy.

Besides Hailan Auto Group, there is another company with a large number of employees, namely the very low-profile Fairy Mountain Holdings!
Fairy Mountain Holdings is a very low-profile company; at least, you rarely see the name Fairy Mountain Holdings in the news.

The main difference is that, unlike other companies under Xu Shenxue that need to target the consumer market and hold various product launches, Fairy Mountain Holdings' business is not directly aimed at consumers, but rather at various enterprises.

Its main products are in two major areas: semiconductor manufacturing equipment and consumables, and quantum chip manufacturing equipment and consumables.

However, ordinary people don't care about or understand these upstream devices and consumables at all. After all, there is no situation where chips are blocked in this time and space, so the media doesn't report on it and the public doesn't pay attention.

These days, you can't see much discussion about domestically produced lithography machines on some tech websites, because they have their own and their technology is more advanced... Making videos like this won't get much traffic, so people don't like watching them!

Fairy Mountain Holdings' second main business is the research and development and supply of all sorts of new materials and components, which are also targeted at major companies, such as solid-state battery materials in the materials business.

Few outsiders know that Hailan Automotive Group's solid-state battery production is heavily reliant on materials supplied by Fairy Mountain Holdings, and at least 40% of the production cost of solid-state batteries is spent on purchasing materials from Fairy Mountain Holdings.

While Hailan Automotive Group has gained a huge reputation and revenue and profits worldwide by relying on solid-state battery technology, Fairy Mountain Holdings is also making a lot of money behind the scenes, even more than Hailan Automotive Group in the battery sector.

The reason why Fairy Mountain Holdings was able to turn a profit last year was due to the huge revenue and profits generated by its solid-state battery materials business. This is because Fairy Mountain Holdings has exclusive control over the material technology and supply for solid-state batteries.

Fairy Mountain Holdings supplies a variety of new materials and core components to various industries, from aerospace and aviation to automobiles and various mechanical equipment. For example, the domestically produced large aircraft uses a large number of parts made from materials under Fairy Mountain Holdings, as do the domestically produced civil aircraft engines that are currently undergoing various experiments.

What Fairy Mountain Holdings is most impressive about is actually its involvement in various materials... However, apart from professionals and related companies, the general public doesn't care much about the materials field... So not many ordinary people know about Fairy Mountain Holdings' strength in the materials field.

In addition, Fairy Mountain Holdings also has some subsidiary businesses, mainly some smart terminal and automotive supply chain businesses that Xu Shenxue put in to inject capital into Fairy Mountain Holdings back then...

The largest supply chain partner of Zhiyun Group and Weiku Electronics Group is actually Fairy Mountain Holdings.

Fairy Mountain Holdings provides chargers, various cables, camera components, and body glass and screen glass for smart terminals to Zhiyun Group and Weiku Electronics Group.

Fairy Mountain Holdings is actually the largest smart terminal supply chain company in China, but it does not operate under the name of a parent company. Instead, it is distributed among hundreds of subsidiaries. A significant portion of the listed companies in the Zhiyun supply chain are actually subsidiaries of Fairy Mountain Holdings.

Fairy Mountain Holdings has more than 30 listed companies in mainland China and Hong Kong... Most of them are not very large in scale and have only so-so reputations, but the number is really quite large.

In addition, Fairy Mountain Holdings is also an important supply chain enterprise of Hailan Automotive Group, providing not only solid-state battery materials but also various automotive parts...

Apart from the special nature of solid-state battery materials, a significant portion of the other business is used by Hailan Automotive Group to provide financial support to Fairy Mountain Holdings... because many spare parts do not actually require much technology, and many suppliers can make them, even at a lower price than Fairy Mountain Holdings' subsidiaries.

However, Hailan Automotive Group awarded the orders to the corresponding subsidiaries under Fairy Mountain Holdings!

For many years, Fairy Mountain Holdings has survived on various huge subsidies from the government, continuous injections of Xu Shenxue's personal funds, and financial support from the three companies, Zhiyun Group, Weiku Electronics Group, and Hailan Automobile Group.

The continuous inflow of funds from three main sources has enabled Fairy Mountain Holdings to achieve its remarkable success today; otherwise, it would have gone bankrupt long ago...

Especially in the early days when we were developing semiconductor manufacturing equipment and consumables, it wasn't exactly starting from scratch, but it was pretty much the same. We had to work on all aspects. You could say that one company was competing against the entire Western industrial system's semiconductor manufacturing equipment and consumables industry.

You have to do everything yourself, and everything costs money!

Early semiconductor manufacturing equipment and consumables were unsellable due to poor performance. Aside from a few purchases by Zhiyun Microelectronics, other manufacturers simply wouldn't buy them.

But we can't just stop operating even if we're losing money, so we have no choice but to grit our teeth and keep going despite the huge losses.

In those years, Fairy Mountain Holdings suffered huge losses every year... losses that made Xu Shenxue's liver ache.

But this is the price of falling behind and catching up with the advanced... It is impossible to catch up with or even surpass the efforts of others that took decades in just a few years without investing heavily and making tremendous efforts.

This is especially true for industries like semiconductor manufacturing equipment and consumables, which heavily rely on the industrial base!
Fortunately, after years of continuous efforts and massive investment, Fairy Mountain Holdings has now reached first-class levels in most areas of semiconductor manufacturing equipment and consumables, and in some areas it has even surpassed the level of foreign countries.

Especially in the core field of EUV lithography machines, Haiwan Technology, a subsidiary of Fairy Mountain Holdings, has already surpassed its foreign counterparts in many aspects of its large numerical aperture EUV lithography machines, particularly in terms of cost.

The new generation of large numerical aperture EUV lithography machines is also a key piece of equipment for Zhiyun Microelectronics to continuously promote higher electronic chip manufacturing processes.

Such as equivalent two-nanometer processes and future equivalent 1.5-nanometer, or even equivalent one-nanometer processes.

Meanwhile, ASML's similar large numerical aperture EUV lithography machine is still hampered by its high cost, making it difficult to put into commercial chip mass production.

When Zhiyun Microelectronics uses Gulf Technology's large numerical aperture EUV to manufacture chips equivalent to two nanometers, if TSMC also uses ASML's large numerical aperture EUV lithography machine at the same time, TSMC will be in big trouble... because the cost difference between the two is too great.

The main business of Fairy Mountain Holdings consists of semiconductor manufacturing equipment and consumables, quantum chip manufacturing equipment and consumables, new materials and high-tech components, plus a bunch of supporting supply chain businesses.

Because of its wide range of business operations, Fairy Mountain Holdings has a large number of subsidiaries, with more than 100 major subsidiaries, more than 30 of which are listed companies.

Therefore, it is very large in scale, with many factories and a large number of employees.

The company's R&D centers and main factories are also key areas that Xu Shenxue inspects regularly.

During this round of inspections, he saw quite a lot.

Xu Shenxue's inspection tour, like his usual ones, focused primarily on the R&D center and manufacturing center...

After all, research and development and manufacturing are the core!
After completing this inspection tour, Xu Shenxue returned to Shenzhen in early August.

His focus then shifted to the upcoming Zhiyun Autumn Product Launch... Although smartphones are no longer considered innovative products or cutting-edge technology, Xu Shenxue still attached great importance to them.

Unfortunately, Zhuyun Group's entire smart terminal business, as well as most of its software and internet businesses, are built on the S series mobile phones.

The combined revenue from these numerous related businesses exceeds a staggering four hundred billion US dollars...

To maintain the continued stability of these businesses, Zhiyun Group's R&D personnel have gone to great lengths to innovate in smartphones.

And this year is no exception...

Zhiyun Group will release its first 'AI assistant' on the new S series phones, further leveraging its top-tier AI to provide more advantages for its smartphone business.

In addition, at its autumn product launch event this year, Zhiyun Group will also release several new innovative products, all of which are highly technologically advanced.

Xu Shenxue found some of them quite interesting or meaningful... though they probably wouldn't sell many.

But how many of these new products can be sold is not important; what matters is showing off the technology!

Zhiyun Group has always liked to release all sorts of strange and wonderful high-tech products at its press conferences, even though most of them are not very useful... but they look impressive!

This year is no exception!

(End of this chapter)