The Millennium Semiconductor Survival Guide

"Although if the minimum order is five million pieces, the price can be reduced to 599 yuan, but it requires payment first and then delivery. It does not support installment payment, let alone delivery first and payment later.

I believe that Mr. Huang, as an industry insider, you should know that with an integrated chip like Yanque, we have almost no profit at the price of 599 yuan.

For such unprofitable products, we follow a zero-tolerance risk strategy. In order to avoid unnecessary conflicts in the subsequent cooperation process, I think it is better to talk about the settlement method first. "

Zhang Yi was smiling, but what he said made Huang Zhang feel chilled.

Five million, the unit price is 599, which means he has to prepare almost 3 billion in cash, and he has to prepare the goods first and pay later, plus other accessories, which means he has to prepare at least more than 5 billion in cash.

Not to mention that Meizu has Zhuhai's support, even if Meizu is Zhuhai's biological son, Zhuhai would not be willing to gamble with such a large sum of money for him.

As for the method of crowdfunding, the amount was too large, and he didn't dare to gamble. If he was determined to raise funds illegally, it would be a waste of money.

As a veteran of the manufacturing industry, he understands the profit model of Xinxin's price. To put it bluntly, the chip itself does not make money, but the interest rate difference, which is 3 billion RMB. If it is used to deposit a one-year fixed term, it will earn two points of profit. .

For a giant like Xinxin, there are many operations that can be done with such a huge cash flow, and 2 points is an underestimate.

After Xinxin has cash, it will be more comfortable whether it is investment, expansion of production or mergers and acquisitions.

Of course, Huang Zhang doesn't understand why Xinxin has not been listed. For Xinxin, whether it is in the big A, Hong Kong stock market or Nasdaq, it is easy to list.

After 20 years, the end point for many companies is to go public, and major shareholders are waiting to cash out. The same was true 20 years ago. The equity of TCL Mobile Phones, with a market value of at least 300 million yuan, was sold to the management for 24 million yuan. The rights and interests of investors were seriously infringed, and most of them had no idea about it.

TCL Mobile's listing on the Hong Kong stock market turns the assets held by original shareholders, including management, into liquid stocks.

Huang Zhang still refused to give up: "If we pay first and then deliver the goods, how long will it take for the goods to arrive?"

Zhang Yi, as the business manager of Xinxin, knew that it was almost impossible for the man in front of him to afford five million tablets, but he still answered all questions: "The goods will arrive within one year. For five million, we will do it in batches." There are four time nodes, one month, three months, half a year and one year.

Of course, this is the latest time node. If the actual situation occurs, we can also deliver it in advance according to customer needs. "

To put it bluntly, at this level, only a few domestic companies such as TCL, Bird, and Lenovo can spend this amount of money. For smaller companies, spending so much cash will cause their liquidity to dry up instantly.

Huang Zhang said: "Thank you, Manager Zhang. I will communicate with you through WeChat if I have any needs in the future.

Also, I would like to ask if there are any discounts at Honghu? "

Zhang Yi said: "Honghu's discount measures are similar to those of Yanque, ranging from 500,000 to 5 million. Different order quantities have different levels of discounts, but in terms of magnitude, Honghu is the cheapest but not much cheaper.

Because Honghu uses the most advanced chip manufacturing technology, we are currently in a stage of improving quality products internally, and this cost cannot be reduced. "

After Huang Zhang inquired, his heart dropped. Where could he get so much money? This is a problem.

At the same time, Huang Zhang also thought that Meizu cannot afford so much money, but there are many powerful domestic companies that can afford so much cash. They have reduced the cost of core components of smartphones to less than 400, and then Get a shocking price of 999 yuan.

How can Meizu survive?

Huang Zhang sat across from Zhang Yi with an ugly face. Zhang Yi whispered: "Mr. Huang, I am reminding you privately in my personal capacity.

The amount of funds required for five million tablets is indeed too much, and it is difficult for even powerful companies to collect such a large amount of cash flow in a short period of time.

But there is another way, that is, multiple companies join together to form a joint venture company, and then jointly purchase. "

Huang Zhang stood up and shook hands with Zhang Yi almost instantly: "Manager Zhang, thank you so much. I have to go back to Guangdong Province now. I will treat you to dinner next time I come to Shenhai. Remember to support me then."

Yes, the number of five million is too astonishing. It is not something that Meizu alone can afford. They can find other manufacturers to cooperate.

The information Huang Zhang got was also obtained by other mobile phone manufacturers.

Samsung’s first reaction was: “Xinxin’s approach is equivalent to hoping that major mobile phone manufacturers will become their distributors.

Distribute the goods to major mobile phone manufacturers at a price of 599 yuan, and adopt this method to seize the market in advance. "

“Xinxin is very clear that their technological advantage will not last long.

It is true that Xinxin will launch integrated chips for smartphones first, but whether it is us, Texas Instruments, or Intel and AMD, they will soon launch integrated chips for smartphones.

In order to continue to maintain their advantage in this field, Xinxin does not want to lower prices on the surface, because if they lower prices on the surface, it will not be so easy to raise prices in the future.

Therefore, they adopt such a stepped pricing strategy to spread the supply of goods as quickly as possible.

Let the big mobile phone manufacturers become their dealers. They also make mobile phones themselves. Even if the goods cannot be sold, they can still make products and sell them to consumers. This business is also a sure profit for them. "

New chips, mobile phone manufacturers, consumers

Xinxin can obtain a large amount of cash flow and can fill up the 130nm production line. Xinxin's self-developed 130nm lithography machine also has a place to play. The low-price dumping strategy can gain a large number of markets.

For such a low-price strategy, just change the preferential policy in the future, and the resistance will be much easier than lowering the price first and then raising the price.

Mobile phone manufacturers can get low-priced chips. The chip costs 599 yuan. Even if you get it from a big mobile phone manufacturer and they peel it off, the price you get will not exceed 650 yuan. You can get it at such a low price. It is no exaggeration to describe the next top smartphone chip as making huge profits.

For consumers, low-price chips mean that the price of smartphones will not be much higher, not to mention that Xiaomi is forcing these mobile phone manufacturers to make money. Without a low-price strategy, domestic mobile phone manufacturers will not survive this winter. .

As for who lost? Naturally, other chip manufacturers are aiming at this piece of cake. In the last half of the year, the market has already been taken up by new chips.

MediaTek CEO Cao Xingcheng received the message from the participants almost immediately:

"At 599 yuan, this price leaves no room for MediaTek's chips to survive."

Cao Xingcheng held an emergency meeting in the company.

MediaTek is different from TSMC. TSMC only engages in chip foundry and investment in the upstream and downstream semiconductor industries. In addition to chip foundry, MediaTek also engages in chip design. Chip design is the bulk of their profit source.

I saw the business opportunity of mobile phone integrated chips before, but was beaten by Xinxin. Later, after launching MediaTek's integrated chips, I could only get a share of this market. I must have made money. The problem is that Xinxin eats the meat. They drank soup, and no one would change it.

Not to mention that MediaTek prides itself on being a pioneer in the chip industry, but MediaTek is unwilling to be left behind by Xinxin.

Therefore, I originally wanted to make a turnaround in the smartphone chip market, but before I even started, I was hit by Xinxin.

"Let's talk about what we should do to deal with Xinxin's low-price dumping strategy." Cao Xingcheng said.

"According to the pricing of Xinxin products, their official price is 799 yuan. The Yanque chip uses a 130nm process. The price of 799 yuan is actually not bad. We will not be higher than them in price.

As for 599, that requirement is very harsh. Are any manufacturers really willing to accept such harsh conditions?

I'm very skeptical. "

Cao Xingcheng said categorically: "Since they have announced to any manufacturer that the one-time purchase volume has reached 5 million pieces, the price will be 599 yuan.

This also means that no matter what methods manufacturers adopt, the price they pay for purchasing Finch chips will not be much higher than 599.

We cannot regard 799 as their official pricing. We need to regard 599 as their official pricing. "

Cai Mingjie, one of the founders of MediaTek, would have been the proposer and project leader of mobile phone integrated chips if there were no Xinxin.

He said: "Lao Cao, don't worry, our chips are still under development.

I do have a way, that is, we do subtraction.

Our target market is mainland China, and low price is our trump card to enter this market.

Xinxin's Chanque has lowered the price to such a low level. If we continue the past thinking, it will be impossible to lower the price to such a low level.

But we can't just surrender and admit defeat.

At this time, subtraction can be our choice.

Technically, there is no essential difference between us and Xinxin. The source of our technology is Silicon Valley. At most, they have more experience than us. The chips they produce have lower energy consumption and better performance. Consumers cannot sense this difference. of.

For mobile phone manufacturers, it doesn't matter.

We can occupy the lower-end market and lower the price to 500 yuan. "

Cao Xingcheng nodded: "Mingjie, this is a way. Please tell me how to do it."

Cai Mingjie said: “For example, we can completely remove the Bluetooth chip from the SoC.

With a multimedia decoding chip, users can listen to sounds through wired headphones without using Bluetooth function at all.

Since we have lowered the price to 500 yuan, it also means that the products provided by mobile phone manufacturers to consumers are mainly low-priced.

Under this premise, the Bluetooth function is actually not necessary. Especially the current Bluetooth technology needs to be purchased from Xinxin, and the price is very high. We can cut this off.

Other chips can also adopt sub-level options, such as multimedia decoding. We can not use Sony's chips, but directly use self-developed ones, or use Hongyuan Electronics' multimedia decoding chips.

Anyway, we follow one principle, that is, practicality. We maximize practicality, and on this basis, we reduce costs as much as possible. "

If MediaTek’s strategy is to prioritize low price and cost-effectiveness, then Samsung’s strategy is to take the high-end route as much as possible.

Because Samsung and Xinxin are somewhat similar, there are many industries involved in the upstream and downstream of semiconductors. They not only make mobile phone chips, but also memory chips. Samsung plans to build high-end chips that surpass Honghu and package them with its own memory for sale.

“Our pricing strategy will definitely catch our competitors off guard.

Today TCL and Bird have reached a preliminary agreement with us. They will order 5 million pieces of Chancheng and 1 million pieces of Honghu at one time.

Lenovo has also come to express similar wishes, but Lenovo hopes that we will be accommodating and the goods will be delivered with the money.

Sony Ericsson and Nokia, I feel, are also willing, but their Chinese branches cannot be decided, and they will probably have to report to the superiors.

The shipment volume of Yanque and Honghu this year is expected to be at least 50 million pieces. "

After the press conference, Yu Dazui was summarizing in Xinxin’s internal meeting.

Zhou Xin will not make too many statements at the public meeting because in his view, this is a good start, but it is far from the time when a final conclusion can be made.

Qualcomm has not yet given up, and Samsung has not given up yet. Motorola, Texas Instruments, AMD and Intel are all competing in the field of mobile phone chips.

After the public meeting ended, Zhou Xin communicated with Hu Zhengming alone in the office: "Professor, research and development must be accelerated.

I have a hunch that our technological advantages are being gradually caught up by our competitors.

Honghu will try its best to leave it to our own factories for OEM production, even if the yield rate is lower at the beginning.

Honghu's pricing gives enough margin, and even if the yield rate is 95%, there will be no loss.

We have to maximize the production capacity in the Lion City. "

Hu Zhengming nodded: "I understand.

We are actually on the right track, we just need to stick to it.

You don’t have to worry too much. Our competitors are powerful, but not one company can conquer the smartphone market.

This market can accommodate enough players. "

Zhou Xin smiled bitterly. He knew that in the future, the mobile phone chip market could only tolerate two big players, Apple and Qualcomm.

If TSMC can still help Huawei with manufacturing, Huawei can also be considered one.

Both MediaTek and Samsung will become small players in this field.

With global shipments exceeding 2 billion per year, there are only two major players. This is hard to believe for those who have not experienced it.

Zhou Xin couldn’t make predictions, he could only explain it from industrial logic:

"Professor, you must have felt this over the past two years or so.

Smartphone chips are different from other types of chips, and their market size is crucial.

The market is large enough and we can keep costs down.

It can form scale effect and cluster effect.

You can't think of it as a small chip, it's actually a big chip.

It's more like computer CPUs. Computer CPUs ship billions of dollars every year. Aren't there only two players, Intel and AMD? At the same time, Silicon Valley has already arrived.

The same goes for smartphone chips, which can only accommodate a handful of players at most.

It is not a multimedia decoding chip, and it does not mean that each manufacturer occupies a small market share. "

Hu Zhengming was a witness to the rise of Intel, "I know what you mean.

The reason why Yanque and Honghu adopted such a pricing strategy is precisely because we now need to seize the market as quickly as possible. "

The price was wrong yesterday, the lowest was 599.