Rebirth 99 to become a car giant

Nanshan Equipment is making waves in the chip equipment industry, and Nanshan Semiconductor is naturally not idle either.

After the successful mass production of the Modu wafer fab, the output began to slowly increase.

Subsequent chip processing and packaging and testing also began to proceed simultaneously.

Once the chip is produced, it cannot be switched directly.

Instead, it needs to be installed on the parts and conducted a series of tests.

And after these tests are completed, customer consent is required before changes can be made.

Anyone who has worked in the automotive industry knows that if a parts manufacturer wants to change its materials, chips, or underlying components, it must obtain approval from the OEM.

Of course, you have to say that you can change careers secretly...

As long as nothing happens, no one will probably worry about it.

But once something goes wrong, sorry, you will be in big trouble!

Therefore, in most cases, parts companies will prepare relevant change report materials, ask the technical department and R\u0026D department of the OEM to confirm, and after obtaining the other party's approval, arrange the delivery of parts with new specifications.

During this process, sometimes the part codes need to be changed and the drawings need to be upgraded.

Of course, if your original drawings do not reflect some specific information about the components, then it is okay to keep the drawings unchanged.

Obviously, whether it is Nanshan auto parts, Nanshan engine, or Nanshan gearbox, as long as the chip on it changes, it will definitely need to be approved by the OEM.

"Mr. Cao, every year OEMs have the task of reducing prices, and today is no exception."

"Generally speaking, the targets for this annual price reduction are 3% to 5%. Of course, there are some that require higher prices."

"In the past few years, the annual reductions we have actually given to various OEMs are generally around 2%. Even if the sales of some customers' models are not good, it may even be 1%."

"I think this time we can recommend chip switching from the perspective of reducing supply risks and achieving cost reduction."

"And we do not directly replace the original chips with chips produced by Nanshan Semiconductor, but make changes by increasing the types of chip supply."

"In this way, for the OEM, both chips can be used, which indeed reduces the supply risk."

"We are also cooperating with price reductions on corresponding parts, and convert the price reductions that need to be carried out every year into VA proposals for chip changes."

"For various OEMs, this proposal should sound less objectionable to them."

"It doesn't matter even if everyone knows what the actual reason behind it is."

How to change chip manufacturers for the equipment and chip-related parts that Nanshan Group supplies to various customers is something that Nanshan Group must consider during this period.

Although with the production capacity of Nanshan Semiconductor, not all parts are switched now.

Instead, we will first find a few typical parts to promote, and then fully promote them after Nanshan Semiconductor's production capacity is further expanded.

Of course, in order to improve the efficiency of future advancement, we must choose parts that are relatively high-volume.

For example, for the TCU under the gearbox, as long as Nanshan Semiconductor smoothly promotes the chip switch this year, even if 99% of the parts continue to use the original chips and only 1% realize the switch, then as long as the chip production capacity increases in the future, it will be possible. Freely expand 1% to 100%.

After all, what Nanshan Group is applying for is to add a type of chip usage and use the chips based on supply conditions.

So as long as the customer approves it, whichever of the two chips is used is compliant.

This way you don’t need to go through the process again later.

To a certain extent, this can be regarded as a trick that complies with the rules.

Otherwise, if you simply switch certain parts according to Nanshan Semiconductor's current production capacity, then the subsequent switch of other parts will require a relatively long process.

For self-owned brand customers, the process of these changes can be slightly faster.

For joint venture car companies, the efficiency is much lower.

In China's joint ventures, most do not even have the authority and ability to judge such changes. They need to find the R\u0026D department at the headquarters to apply for changes.

Such a fuss will take a long time.

When the production of Nanshan Semiconductor increases, it may happen that the chips cannot be loaded into cars and used.

Zeng Tingting definitely hopes to avoid such a situation as much as possible.

Otherwise, you will be very passive when the time comes.

"Minister Zeng's proposal is very good. I think the engine ECU, the gearbox TCU, and the main control chip on the ESP are the chip parts we use the most."

"As long as the change application for these parts is successfully promoted, basically the production capacity of the new factory being built by Nanshan Semiconductor can be fully consumed after it is put into production."

"Even once our parts have been approved by customers, we can start considering the next stage of Nanshan Semiconductor's capacity expansion."

As the general manager of Nanshan Auto Parts, Dai Hanbiao naturally attaches great importance to this change.

This is a major event related to Nanshan Group's future semiconductor strategy and must not be taken lightly.

"I agree with Mr. Dai's proposal. The TCU of Nanshan Transmission can apply for changes first."

"Although we have several specifications of TCU, there are actually only two types of main control chips."

"As long as the customer agrees to use Nanshan Semiconductor's chips, the initiative in the future will be in our own hands."

"The goal of achieving 100% localization of chips mentioned by Mr. Cao is expected to be fully realized within the next five years."

Ji Hua is also very positive about this change.

Until now, except for semiconductor components, Nanshan gearbox has not been domestically produced. All other parts and materials are purchased from China.

This localization rate is already considered very high.

If the main control chip can be switched smoothly this time, and other chips can be replaced later, Nanshan Gearbox will not need to worry about the supply of chips.

After all, during this period, ASML and other international chip equipment giants began to deal with Nanshan equipment, and he also knew about it.

Who knows when there will be problems with Nanshan gearbox chip supply.

Ji Hua, who has spent many years abroad, does not think that those people really follow rules when doing things.

People are only willing to be polite and gentlemanly in front of you when they are very strong.

Once someone overtakes you, you will immediately jump over the wall.

"Since everyone thinks this plan is feasible, we should advance the relevant recognition work as soon as possible."

"Star Motors and Jaguar Land Rover, as companies under the group, should complete verification in this area as quickly as possible to support our group's semiconductor business and set an example for other customers."

"Both Xingchen Motors and Jaguar Land Rover dare to use Nanshan Semiconductor's chips. Our customers have no reason to worry too much."

Cao Yang felt that Zeng Tingting's proposal was quite reasonable, so naturally he agreed to their reporting plan without saying anything.

Nanshan Semiconductor has spent a lot of manpower and material resources to develop the chip industry, and now it is finally time to start loading.

This is definitely a very meaningful moment.

If there is any OEM in the future that does not support this switch, Cao Yang will be prepared to suppress them from the moral high ground.

For example, if a joint venture affiliated with the Modu Automobile Group is struggling, then you can ask Modu City to put pressure on it.

Similarly, Didu Automobile, Spring City Automobile and Changan Automobile can also use similar solutions.

As for independent brand companies such as Chery and Geely, Cao Yang is not very worried.

There is no reason for these companies to get stuck on this matter.

If any company really uses this matter to disgust Nanshan Group, Cao Yang has countless ways to fight back.

We don’t even need to use any means to directly tell customers when our parts will switch chips. You must either admit the switch or find other suppliers in advance.

As a top supplier, Nanshan Group has such confidence.

Just like in later generations when chips were tight, if top suppliers such as Bosch and Continental insisted on replacing some kind of alternative chips, the OEM would eventually have to accept them.

Otherwise, just wait for it to be discontinued.

The more troubled a company is, the more afraid it will be of stopping production when something like this happens.

Because once production is discontinued, it is a major event and requires various reports within the company.

Then many things that were not originally intended to be explained had to be explained.

This can definitely make a lot of people feel stressed.

Now that a conclusion has been reached internally, all departments naturally start taking action immediately.

Some chip-related single product tests have been completed, and some tests of the assembly can be carried out relatively quickly.

Soon, Nanshan Gearbox and other companies began to contact many customers about changing chips.

"Mr. Wang, the Nanshan gearbox has started to use chips produced by Nanshan Semiconductor, and is now applying for the relevant change procedures."

"They move pretty fast."

In BYD's cafeteria, Zhong Qiang, the director of the purchasing department, sat opposite Wang Fu and specifically mentioned to him about Nanshan's gearbox chip change.

Under normal circumstances, such "little things" would definitely not be on Wang Fu's desk, otherwise even 72 hours in his day would not be enough.

But Zhong Qiang felt that Wang Fu would definitely be interested.

Sure enough, after listening to Zhong Qiang's words, Wang Fu immediately stopped his chopsticks and asked: "What is the performance of their chips? Can they reach the same level as before?"

BYD now has a wafer fab cooperation project with Nanshan Semiconductor, and previously formed a joint venture company like BYD Nanshan Semiconductor to jointly develop automotive-grade chips.

Therefore, Wang Fu is very interested in the latest mass-produced chips of Nanshan Semiconductor.

"Judging from the report materials submitted by the other party, the performance of the chip in all aspects is no worse than the original one, and many parameters are even better."

"After all, the previous chips were not made with the latest chip technology. Now that Nanshan Semiconductor uses its own chips, the performance of the TCU is even better."

"I estimate that Nanshan Group will comprehensively promote the switching of various chips in the next step, and it is even possible to use this opportunity to upgrade some parts."

Zhong Qiang said while watching Wang Fu's reaction.

He wanted to judge from the other party's reaction whether Wang Fu supported this chip switching or not.

This determines how he will respond to Nanshan Semiconductor's change application.

As for the so-called processes and rules, they are often relatively flexible.

If the boss says yes, then it can be done quickly and within the scope of the process.

If the boss says no, he can also find reasons within the scope of the process to reject the other party's application.

After all, many things are done by people, and all standards are set by people.

"It seems that Mr. Cao is very determined to develop the chip industry."

"After several years of hard work and a lot of money spent, many people are waiting to see Mr. Cao's joke."

"If this switch can be carried out smoothly, then Nanshan Semiconductor's automotive-grade chip business will be on the right track."

"In the future, if those chip giants want to dominate Chinese companies in car-grade chips, they will have to think more."

Wang Fu still looks at the problem from a very high level.

China's auto parts can be 100% localized, including chips and raw materials.

This matter is in the interest of all independent brand car companies.

He had no reason to object.

"Yes, Nanshan Semiconductor will build four wafer fabs at once this year. It is said that more new fabs will be started this year. Tens of billions of yuan will be spent at this time. If no results are achieved, it is really extraordinary. enterprises can bear it.”

"That is to say, China has such an alternative as Nanshan Group. Otherwise, I think it will be impossible to achieve 100% localization of automotive-grade chips even if it takes another ten years."

"Don't even say 100% localization. Even a 10% localization rate is difficult to achieve."

"After all, judging from the current situation, there is not even a 1% localization rate, or even 100% import."

"Nanshan Semiconductor has achieved a historic breakthrough this time!"

Having said this, Zhong Qiang couldn't help but show a look of admiration on his face.

A company like Nanshan Group was the only one among all the companies he knew, and there was no semicolon.

Other parts companies cannot even achieve a fraction of Nanshan Group's results.

"Will Xingchen Motors and Jaguar Land Rover also start using chips from Nanshan Semiconductor?"

"Yes, the other party mentioned this specifically when he came to report."

Zhong Qiang replied firmly.

This issue is actually a matter of concern to him.

After all, if the companies within their own group dare not use Nanshan Semiconductor's products, then Zhong Qiang will certainly not dare to agree easily.

"Since both Xingchen Motors and Jaguar Land Rover dare to judge replacement, we have nothing to hesitate."

"Under the condition that it is in line with the company's work flow, we will approve this change as quickly as possible, which also makes Nanshan Group feel our sincerity."

Wang Fu didn't hesitate anymore and gave the instructions directly.

He even planned to make a special phone call to Cao Yang to express his congratulations, which was a subtle expression that BYD was supporting Nanshan Semiconductor.

With Wang Fu's instructions, BYD naturally quickly approved the application for Nanshan's gearbox. The gearbox equipped with chips produced by Nanshan Semiconductor soon began to prepare for formal delivery to BYD.

Of course, since it involves some parts inventory and the like, it will definitely take some time before the cars are actually assembled and sold to consumers.

At the same time, other OEMs are also carrying out similar work simultaneously.

However, not every customer is going smoothly.

"Cao, do you want to replace TI's chips with those from Nanshan Semiconductor?"

Over at Modutong, Austin called Cao Yang directly.

They are old acquaintances.

So in many cases, as long as things don't involve each other's core interests, everyone can communicate well.

It stands to reason that this kind of chip change would not be in Austin's hands.

But now he called, indicating that things were definitely not that simple.

"Yes, in order to meet the cost reduction requirements of various customers and reduce supply chain risks, we have promoted two chip replacement and production plans."

“This can fully ensure that we can supply products according to the needs of OEMs at any time.”

Cao Yang will definitely not mention anything about the chip localization strategy and the positioning of Nanshan Semiconductor at this time.

It is obviously more appropriate to come out with some high-sounding reasons.

After all, there are things you can do but not say.

Sometimes I know you know my purpose, but I just don’t say it.

Seeing through things without telling them is a quality in the workplace.

"Cao, I admire you very much for your ability to set up Nanshan Semiconductor and successfully install the chips you produce on parts for sale."

"I personally have no objection to this chip change, but I think you still need to pay attention to this matter."

"I have received news that some chip companies are lobbying the headquarters to demand that General Motors is not allowed to use chips produced by Huaxia Chip Companies."

"Even parts equipped with chips produced by designated Chinese companies are not allowed to be used."

Austin has received a lot of benefits from Nanshan Group, and this time he revealed a relatively important news.

Although for General Motors, this news is not something worth keeping secret, and it does not involve General Motors' core interests.

But for Cao Yang, some more information can be deduced from this news.

Those international chip giants and equipment giants are obviously unwilling to give up.

Not only are people unwilling to see the rise of Nanshan Equipment, they are also unwilling to see the development of Nanshan Semiconductor.

For them, the chip is a part that Chinese companies should not touch.

You can just produce shirts, shoes, and home appliances.

Leave other high-end medicines, chips, equipment, etc. to me.

Euphemistically called it—industrial division of labor!

"Car-grade chips are not high-end chips. Are those chip giants getting nervous now?"

Cao Yang frowned and began to think about some situations he might face in the future.

Obviously, some companies in the United States are moving faster than they think.

Originally, the two parties were still in the honeymoon period, and many companies were suppressing some of their own special ideas.

Now it seems that some companies no longer want to suppress themselves and are ready to fight.

Then it is necessary to speed up some of Nanshan Group's strategies in the future.

After all, if the American chip giants start to take action, their methods will definitely become more and more fierce.

If there is no preparation, Nanshan Group may be severely damaged.

This is obviously not a situation Cao Yang wants to see.

"Although car-grade chips are not high-end stuff, so far no company in China can produce car-grade chips, except for you, Nanshan Semiconductor."

"On this point alone, the chip giants have reason to treat you as enemies."

"Besides, Nanshan Group not only has automobile business, but also smartphone business."

"Compared to car-grade chips, the chips used in smartphones are not low-end technologies."

"Many companies should speculate that you will also be involved in mobile phone chips in the future."

"Especially because your group has even developed high-end equipment such as photolithography machines, it makes many people wary of you."

When Austin said this, Cao Yang did not insist on refuting.

After all, he was kind enough to tell you important news.

If you insist on not admitting anything, it will be detrimental to future cooperation between the two parties.

Austin is one of the few automotive giant executives who have been fed by the Nanshan Group. Naturally, Cao Yang does not want the relationship between the two parties to be affected too much.

"Austin, thank you for sharing this information with me."

"We will take this matter seriously."

After ending the call with Austin, Cao Yang immediately asked Mi Ying to call Zhang Jing and Pan Jinxing.

"Some of the planning for our chip factories needs to be considered a little bit ahead of time."

"You should make a new mid- to long-term plan as soon as possible. We will officially start the construction of a 40-nanometer chip factory within this year, and form mass production capabilities by the beginning of the next year at the latest, so that our Honor mobile phones can use domestic chips. "

"Nanshan Semiconductor and Nanshan Equipment must maintain full communication, and everyone will make specific plans as soon as possible."

"This time the 40-nanometer chip factory will be larger than any current factory."

"After mobile phone chips are upgraded in the future, car-grade chips can also be upgraded to 40 nanometers. I even think that 90% of car-grade chips will only need to use the 40-nanometer process at most."

"So the 40-nanometer process will be a very important process for me in the future."

As soon as Cao Yang said these words, Zhang Jing and Pan Jinxing were stunned for a moment.

This plan is at least one year ahead of schedule.

We all have a lot of work to do to respond.

The most important thing is that this kind of action is not just something they can do on their own, but requires the entire industry chain to be mobilized.

However, the boss has already spoken, and Nanshan Semiconductor and Nanshan Equipment have the relevant challenge capabilities, so naturally they have to roll up their sleeves and work hard!