Rebirth 99 to become a car giant

The Spring Festival is approaching, but media people in China's IT circle are still busy.

This time the Nanshan Semiconductor Magic City Fab Factory was put into operation, it naturally attracted a lot of attention and invited many media to attend the event.

Zhongguancun Online's editor-in-chief Wu Xuebin and editor Xie Min will naturally not miss such a major event.

"Editor-in-Chief, I just checked the process, and there are many leaders coming."

"I heard that leaders from the Government Affairs Council were also present."

Entering the ceremony site, Xie Min couldn't help but look around.

This is not the first time she has participated in the commissioning ceremony of the wafer fab.

But in the past few years, we really haven’t seen such a big presence as Zhenzhan.

In her opinion, Nanshan Semiconductor's Magic City Wafer Factory is just a factory that produces 8-inch wafers. Its technology is not advanced at all, and it is not the first in the country. It should not deserve so much attention.

But the situation at the scene was completely different from what she expected.

"It is said that Nanshan Group's annual turnover last year exceeded 500 billion yuan. It is indeed the largest private enterprise in China, even far exceeding most state-owned enterprises."

"Judging from last year's data, Nanshan Group can definitely enter the TOP10 or even the TOP5 of China's Top 100 Enterprises."

"It is estimated that only a few companies such as petroleum and power grid have larger revenue scales than Nanshan Group."

"The most important thing is that Nanshan Group did not develop with policy support. Its products all have core technologies, which are different from all other companies."

"The state will definitely give full support to an enterprise like this."

"Although they have only built an 8-inch wafer fab now, it seems that it doesn't matter whether it is placed at home or abroad."

"But if you look at Nanshan Semiconductor's actions in the past two years, you will find that the other party's goals are very ambitious."

"I heard that Cao Yang has let it go internally and wants to spend 50 billion yuan to burn it. He is not afraid of losing money on the chip!"

"Some people even speculate that Nanshan Group's profits last year were more than 50 billion, and they are fully capable of burning money in the chip field."

"This situation is completely different from that of other companies."

"SMIC, currently the largest chip company in China, suffered a loss of US$964 million last year and is expected to continue to lose money this year."

"Without sufficient sources of profit, this level of losses is not something that ordinary companies can afford."

Wu Xuebin obviously looks at the problem from a higher perspective than Xie Min.

You can't just see that people's current technical level is average, you have to see what their future will be like.

Obviously, the future of Nanshan Semiconductor is worth looking forward to.

Wu Xuebin even thinks that Nanshan Semiconductor will be the largest semiconductor company in China in the future.

The day when this day comes is not very far away.

After all, if it is just to expand production capacity, then basically as long as you have money.

The Nanshan Group is not only rich, but also has recruited so many technical talents. It is obvious that it wants to do something big.

"After Nanshan Semiconductor's wafer fab is put into production, it is estimated that it will be difficult to achieve profitability in the next few years."

"The 8-inch production capacity is a bit surplus now, and the price has dropped below the cost price."

"Their wafer fab has just been put into production, and the cost is already higher than the industry level, so they may lose more by then."

Wu Xuebin did not deny Xie Min's statement.

After all, the current semiconductor industry is at a trough, and no one knows when it will get back on the upswing.

Otherwise, there would be no case where someone would rather give up ordering a photolithography machine than pay liquidated damages.

Ten years from now, everyone will be grabbing it.

"Although the semiconductor industry is sluggish, the demand for semiconductors will not be less in the future. If there are no domestic companies to continue to invest, imports will continue to be necessary in the future."

"The higher-ups must have seen these factors in it, so they attached so much importance to Nanshan Semiconductor's wafer plant commissioning ceremony that the Government Affairs Council specially sent leaders to attend."

"I even heard that the city of Shanghai has set aside a large area of ​​land next to this fab for Nanshan Semiconductor to use at any time."

"It can be said that whatever Nanshan Semiconductor lacks, Shanghai Magic City will prepare it for them."

"At this time, even if Nanshan Semiconductor asks for a 10 billion loan from Momo, it can be obtained easily."

The higher the position, the wider the view.

Sometimes you always feel that your boss is not very good. In fact, some of his knowledge and experience are simply not comparable to yours.

Obviously, Wu Xuebin's vision is much better than Xie Min's.

Nanshan Semiconductor's aggressive entry into the chip industry at this time is definitely in line with the country's expectations.

Even well-informed people know that Nanshan Equipment is engaged in the localization of chip equipment.

This is something few companies dare to do.

SMIC, which is as powerful as China's number one, does not dare to make any moves on the road of localization of equipment.

To put it bluntly, this pit is bigger than the fab.

"Nanshan Group has brought a lot of surprises to everyone in the past, and they can be regarded as the company that attaches the most importance to technology research and development in China."

"I hope it will be a good time to attend the commissioning ceremony of the new wafer fab later and make some progress."

Xie Min still has no interest in the 8-inch wafer fab.

But after listening to Wu Xuebin's words, she had some ideas on how to write articles to attract readers.

Now it’s time to follow the entire ceremony properly.

Leaders of the Government Affairs Council speak!

Ministry leaders speak!

Ministry leaders speak!

The leader of Shanghai City speaks!

Nanshan Semiconductor Zhang Jing speaks!

Employee representatives speak!

Factory tour!

After a lengthy process, the whole morning was almost over.

And everyone also successfully saw the "first" wafer at the end of the production line.

It looks like a VCD disc. It is just such a "disc". China has been chasing it but has not yet caught up.

"Mr. Cao, the production capacity of a wafer fab cannot even meet the demand for auto parts in Nanshan, let alone Honor mobile phones."

"Even if we add the wafer fab and packaging and testing plant we previously purchased from Renesas, it is still a drop in the bucket."

"But I think we can first enrich the product range, and then increase the production capacity of various chips after the new wafer factory is put into production."

"In this way, if we can produce most of our own chips, we will have more bargaining power when purchasing products from other chip manufacturers."

"Which chip supplier is the least cooperative, our own production capacity will be tilted towards that product."

As the actual person in charge of Honor mobile phones, Xia Qingqing naturally followed the large army to participate in the commissioning ceremony of the Magic City wafer factory today.

After these wafers are produced, they will be sent to the packaging and testing factory to prepare for the next process, and ultimately produce products that the market demands.

"This is also a plan, but in the first stage, we can only select some of the more important ones for production. Otherwise, there are too many models and it will be impossible to make them, and the cost will be very high."

After the ceremony, there will naturally be a meeting within the Nanshan Group to discuss the future layout.

As for the dinner party, when it reaches a relatively high level, it is not suitable for it.

Of course, if there is a celebration ceremony or something inside Nanshan Semiconductor, Cao Yang has no objection.

He himself also had dinner with the senior executives of the group who came to participate in the event.

"The deeper you get into this industry, the more you can feel how big the gap between the domestic semiconductor industry and the international industry is."

"Not to mention the various equipment we are researching at Nanshan Equipment, they are the most common sensors on the market. Many of the semiconductor components used in them are almost all imported."

"Low-end chips can't be used by others, and high-end ones can't be made."

“It will take at least five years for Nanshan Semiconductor to completely gain a foothold.”

"Now I slowly realize what Mr. Cao meant when he said that he was ready to suffer losses for five years."

As the general manager of Nanshan Equipment, Pan Jinxing is someone who is also familiar with the semiconductor industry.

After all, those who deal with equipment must do some research on the conditions of the things produced by their own equipment.

Otherwise, you don’t even know what you should work on with your equipment.

And the more you study, the more you realize how big the gap is between everyone.

If Cao Yang had not led Nanshan Group to create too many miracles in the past, Pan Jinxing himself would not have the confidence to build chip production equipment.

too difficult!

There is so much important equipment involved!

There is no company in the entire world that is like Nanshan Semiconductor, and all its main production equipment follows the path of independent research and development.

That is an extremely difficult road!

But it’s useless if you don’t do independent research and development. In the past two years, you can buy equipment with money.

In two years, you won’t be able to buy the most advanced equipment even if you spend money.

Even if the equipment is not that advanced, after you pay the money, you still have to queue up and wait for someone to arrange a delivery time for you.

Under such circumstances, how can Nanshan Semiconductor possibly catch up with the international pace?

Not to mention leading the industry, catching up is impossible!

After all, the world's major lithography machines in the future will be produced by ASML, and who are the shareholders behind ASML?

Intel, TSMC, Samsung...

These chip giants are all shareholders of ASML. How could they allow you, Nanshan Semiconductor, to surpass you?

As long as Nanshan Semiconductor can make them feel the slightest threat, don't worry about the stability of equipment supply.

Besides, with such a sensitive device, you don’t know if there are any backdoors left in the device!

If something goes wrong for you at a critical moment, it will be a problem that even vomiting blood cannot solve.

It's like an anti-aircraft missile purchased by a certain country and turned on to intercept it without its knowledge.

Who can I turn to to explain this situation?

Will the equipment in Nanshan Semiconductor's wafer factory suddenly catch fire by itself?

Or even exploded suddenly?

Who knows!

After all, let alone the intention to harm others, one must always have the intention to guard against others, right?

"Actually, I think we can consider applying for some support funds from the ministries and commissions. Otherwise, if we have to rely on ourselves to make losses, it will still be very stressful."

"SMIC has been established for so many years, and it lost more than US$900 million last year. We have just started producing chips, and the proportion of losses may be even more exaggerated."

Dong Shengnan, the Minister of Finance, also mentioned it.

However, Cao Yang had a different view.

You can boldly accept the land and tax concessions provided by the magic city.

After all, no matter where you go, no matter which country you are in, large wafer fabs have the opportunity to enjoy such benefits.

But support funds from ministries and commissions are not so easy to provide.

If you accept money from others, you will definitely be subject to supervision and even auditing.

When the time comes, a lot of things will happen, which is also a hassle.

Besides, the money is not that easy to get, and the amount is not very large.

There is no need for Nanshan Group to lose too much freedom for the money now.

After all, money is really just a matter of numbers for Cao Yang now.

Some unquantifiable influences are more important.

If Nanshan Semiconductor can really become China's largest chip company in the future, the impact will definitely be huge.

"Loss is relative. Our early chips are mainly used by the group itself and can be sold directly at cost price."

"As for a small part of the OEM business, we can't lose too much money just by following the contract."

Cao Yang did not directly answer Dong Shengnan's proposal, but his meaning was very clear.

This is equivalent to asking Nanshan Auto Parts and other related companies to help Nanshan Semiconductor bear part of the losses.

Because these companies purchase Nanshan Semiconductor's products, it is equivalent to changing the chips that can be bought for 10 yuan into 12 yuan, or even 15 yuan.

Of course, companies such as Nanshan Auto Parts have the ability to pass on these costs to OEMs.

Invisibly, it can be regarded as letting the OEM pay for Nanshan Semiconductor.

Most people really can't see through the logic in this.

Even if you see through it, there is no evidence.

Even if there is evidence, there is nothing that can be done.

Even if the prices of Nanshan Auto Parts parts have increased a bit, they are still cheaper than those from Bosch and Continental, and sometimes their performance is even better.

In this case, you may still hesitate to use Volkswagen or Mercedes-Benz.

Companies such as Chery and Great Wall will definitely not have any hesitation.

"This is also a way."

"Now Nanshan auto parts, Nanshan gearboxes, Nanshan engines, Nanshan equipment, Nanshan robots and Honor mobile phones all need to use chips. We all bear the responsibility together and pass on the development costs of Nanshan Semiconductors to the terminals."

"If it can succeed, then Nanshan Semiconductor can enter a positive cycle of development, and the future is bright."

"Mr. Cao entered the semiconductor industry out of a desire to contribute to the development of China's chip industry, not to make money."

"It is also appropriate to let other domestic independent brand companies help bear the cost of development."

"Even if those companies know about this, they should be able to understand."

As the general manager of Nanshan Auto Parts, Dai Hanbiao is Nanshan Semiconductor’s most important customer.

He is not worried about this mode.

After all, he knows very well how strong the company is.

Although he has not been very angry with chip manufacturers in recent years, he has seen some of the overbearing practices of chip manufacturers countless times.

In the future, it will definitely be a good thing for him if he can completely get rid of his dependence on chip giants such as Inflix and NXP.

The benefits of being able to form your own ecosystem are very obvious.

If Nanshan Semiconductor is an isolated company, and you expect Nanshan Auto Parts to buy your chips at high prices, it is simply impossible!

Without a market, there is naturally no future.

If you cut prices to seize the market, the amount of losses will be exaggerated.

At that time, the more you sell, the faster you will die, and you will fall into an endless cycle.

Naturally, there is no future left!

Although Nanshan Semiconductor's cyclical development problem has been solved within Nanshan Group, in fact, in addition to Nanshan Group's own companies, there are also other far-sighted companies in China as a whole.

Just when Cao Yang returned to Yangcheng from the Magic City, Xu Jun, the person in charge of Warwick Haisi, came directly to visit him.

"Mr. Cao, congratulations!"

"The Modu wafer fab has finally entered mass production. Nanshan Semiconductor is now the only company in China that has the entire chip industry chain."

Although Xu Jun is a technical man, he is also very good at talking.

Obviously Nanshan Semiconductor is still very weak, but he was able to find the most special point of Nanshan Semiconductor at once.

SMIC is currently the leading company, but it only does foundry business and not chip design.

Warwick HiSilicon's chip design business is very strong, at least better than Nanshan Semiconductor at this stage.

However, they do not have their own wafer fab. They adopt the popular model of designing their own products and then finding others to manufacture them.

Some other chip manufacturers have no way to compare.

In this way, Nanshan Semiconductor appears to be very special and powerful.

"It's a long way to go!"

"The current international mainstream is 12-inch wafer fabs, but we are still producing 8-inch wafers."

"But it is indeed like what you said, Mr. Xu, we have now taken the first step, and the future is worth looking forward to."

Don't be overly proud, but don't be overly humble either.

Cao Yang is getting better and better at grasping the degree of this.

Warwick HiSilicon came to communicate so actively. Cao Yang naturally wanted to think about the purpose of the other party's coming and what benefits it would bring to Nanshan Semiconductor.

If others don’t know Warwick Haisi’s abilities, how can he know it?

“With the first fab, there will be a second fab, and with the second fab, there will be a third and fourth fab.”

"With the strength of Nanshan Group, building more fabs is not a problem."

"Although the semiconductor business is currently in a state of sluggish development, I think the situation will change sooner or later."

"Especially with the emergence of electric vehicles and smartphones, the demand for chips will be greater and greater in the future. The extra production capacity now will be consumed soon, and even the production capacity will become tight."

“At that time, we won’t need to sell components at a loss.”

Xu Jun has been working in the semiconductor field and is naturally very clear about the current market environment.

To put it bluntly, even a powerful company like Samsung Electronics is struggling right now.

It depends on who can survive it, and then they can make money comfortably.

"You are right, but the semiconductor industry is too complicated. If you are a little behind, it will take a lot of manpower and material resources to catch up."

“The key is that the more backward your technology is, the higher the cost will become, and ultimately it will be more difficult to catch up with the international advanced level.”

Cao Yang and Xu Jun were fairly familiar with each other, so their chat was relatively candid.

"Mr. Cao, we in Warwick also have a huge demand for chips every year. In the past, we basically found TSMC and other companies for OEMs."

"In the future, if Nanshan Semiconductor's wafer fab has production capacity, we are willing to hand over the main business to Nanshan Semiconductor for production."

"We don't need you to give us a special preferential price, we just need to accept the order at the cost price."

If Xu Jun's request was placed in the ears of people who didn't know the business, they would think it was adding insult to injury.

Taking orders at cost price?

Is this a normal transaction?

Isn't this bullying?

Actually it’s not!

Huawei HiSilicon is supporting Nanshan Semiconductor!

Xu Jun knows very well that it will be difficult for Nanshan Semiconductor to make a profit in the next few years.

Their products are basically sold at a loss.

Of course, he may not know that a new cost-passing plan has just been discussed within Nanshan Group.

But even so, being able to accept orders at cost price is higher than the price of other chip manufacturers.

This is definitely Warwick supporting Nanshan Semiconductor.

After all, they could obviously find a cheaper partner, but instead of choosing, they found Nanshan Semiconductor.

This favor must be received.

"Mr. Xu, our Nanshan Semiconductor currently has neither cost advantage nor technical advantage. Are you so confident in leaving your business to us?"

Cao Yang also didn't follow the routine and asked directly.

After all, for Nanshan Semiconductor now, there really are no production capacity issues.

The demand within the group alone can make the Modu Wafer Factory work overtime every day.

Therefore, it is naturally necessary to take this opportunity to talk about Xu Jun's true thoughts.

After all, everyone must consider long-term cooperation in the future.

"Others don't know about Nanshan Group, how can I not know about it?"

"I'm not saying that, if all Chinese companies can really develop chips in the future, I think apart from Huawei HiSilicon, you are the only one who owns Nanshan Semiconductor."

"Other companies naturally have shortcomings of one kind or another and cannot truly possess core competitiveness."

Xu Jun is also an arrogant person.

There were no outsiders now, so he directly spoke out what was on his mind.

"Thank you very much for Mr. Xu's recognition. Thanks to Mr. Xu's trust, within ten years, Nanshan Semiconductor can supply all Huawei and HiSilicon orders at cost price."

"Even if you, Mr. Xu, are interested, you can invest in a wafer factory together and each produce the chips you need."

It is rare that Warwick HiSilicon is so optimistic about itself, and Warwick's profits are very good.

Cao Yang felt that he could find someone to help share the burden of building the fab.

Although Nanshan Semiconductor can definitely make a lot of money in the long run, it is really difficult to make money in the past five years.

Unless they have been doing business within the group, they will transfer the profits of other business units to Nanshan Semiconductor in disguised form.

But for a chip company to become strong, it must take orders from outside.

"Let's invest in the fab together?"

Xu Jun was stunned for a moment. He did not expect that Cao Yang would actually make such a proposal.

According to Huawei HiSilicon's internal plan, it does not plan to enter the chip production business.

In the past, their chips were designed by themselves and then produced by foundries.

If we want to change this strategy now, it will definitely not be done in a few words.