Reinventing the Millennium

On the second day of April, Yike's stock price had already fallen significantly, and the company's overall market value also fell from the interim high of 289.5 billion US dollars to 266 billion US dollars. Even the latest excellent financial report could not save this trend.

Yike's net revenue in fiscal year 2015 reached 161.9 billion US dollars, which was still a 21% increase compared with the violent fiscal year 2014. This was not easy to do under the turbulent situation in the second half of last year.

However, the more beautiful Yike's 2015 financial report is, the uglier its financial report this year will inevitably be. After all, the lost US market clearly contributed 34.1% of its revenue in the financial report.

According to analysis, this is related to Yike's full supply to the US market in the fourth quarter and the clearance sales of channel dealers.

But such an important market is not even the most critical issue for Yike now.

More important and more critical than the number 34.1% is 71.2%.

This is the revenue proportion contributed by mobile phone products in Yike's financial report.

It is still similar to last year's financial report. It is not that Yike's tablet, notebook, mobile ecology and other business revenues are not strong, but that the mobile phone business is too strong. The proportion of the whole 2015 has increased compared to 69.9% in 2014.

Therefore, the priority of Yike's mobile phone production capacity issue has been higher than the divestiture of the US market.

According to Wall Street discussions, Yike's current stock price reflects the negative impact of losing the US market, but the negative impact of the production capacity issue has not been fully digested, that is, there is still room for decline.

It is said that the photoresist news from the China Wafer Manufacturing Alliance caused Yike's stock price to fluctuate, but such good news cannot be verified by the actual production capacity in the market, and it is inevitable that the stock price will be further frustrated.

Hedge funds always react faster and have a keener sense of smell. After verifying and retrieving various information, they will also give rise to greater greed. Yike seems to have no tricks?

The answer to this question is increasingly confirmed by the performance in the market.

In the first week of April, Mars 9 Pro in the European market was frequently out of stock. At the same time, Yike seemed to be trying to make efforts in enterprise business.

By the middle of the month, the Q1 financial report of 2016 cleared everyone's curiosity about the real situation of Yike. Compared with the same period last year, key data such as net revenue, operating profit, and net profit all showed a sharp decline.

Among them, the net revenue in Q1 of 2016 was US$29.344 billion, a year-on-year decline of 44.03% from US$52.432 billion in Q1 last year; operating profit was US$9.72 billion, a year-on-year decline of 47.23%; net profit was US$6.27 billion, a year-on-year decline of 54%.

Yike's market is sluggish, production capacity is limited, profits are declining, product costs are increasing, and, in addition, a "significant" description must be added.

At the same time, whether it is Apple or Samsung, their Q1 financial reports have set new highs, and many executives have also expressed their excitement.

"The US market is the most advanced market in the world. We are very happy to see that more and more American consumers are using Samsung phones. This is an extremely correct choice!"

"Samsung is the best mobile phone in the world and the king of Android!"

"Samsung is the smartphone sales champion supported by consumers all over the world with practical actions!"

This year, Samsung is particularly excited about the Qualcomm Snapdragon. On the one hand, it uses the technology of Taiji, and it does not have the problems that have troubled it in the past two years. On the other hand, it inherits the vacant Android ecological niche in the US market to a large extent, so its sales naturally soar.

However, Apple is more moist than Samsung.

Yike has confirmed its first position among the three major companies for two consecutive years with Mar 8.8 and Mars 9, but this virtuous cycle was broken by geopolitics. Apple, which was originally in the middle, has more space and divides more of the share left by Yike.

Wall Street is extremely pessimistic, competitors divide the market, hedge funds are pouring in again, the industrial chain has been slow to get support, and the stock price has been further frustrated...

With the release of the Q1 financial report, Yike's production capacity dilemma has added a bit of tragic grandeur.

After the Spring Festival, Sohu Finance tried to talk to different guests in the form of short videos on Douyin. After seeing Yike’s financial report, it specially invited its own head Zhang Chaoyang to comment on the current situation.

"Yi Ke is still very profitable now. Although the stock price has fallen, this situation is more or less within everyone's expectations, and the decline is not bad."

"It made nearly 42 billion Chinese yuan in the first quarter, which is net profit, and its revenue is nearly 200 billion Chinese yuan. It is still very large."

"If it were Sohu, I could run around Beijing three times if I could achieve this result."

"Of course, the standards are different. The measurement standards are different. Whether it is our peers, Wall Street, Silicon Valley or mass consumers, they are all looking at Yi Ke with the standards of a global large company."

"It should be said that we all look at Yi Ke with the standards of the world's top 50 companies."

Zhang Chaoyang spread his hands: "Why use such standards?"

He faced the camera, thinking about Yi Ke's current situation, and couldn't help sighing: "Because Yi Ke has indeed reached that position, and it has developed year by year in everyone's eyes."

Yi Ke's development history is very transparent. The first angel investment was obtained from a TV program, and over the years, Yi Ke's products have also climbed to the world's number one position step by step.

Therefore, Zhang Chaoyang's sigh contained an unconcealable feeling.

It would be fine if it was defeated by commercial means. What kind of thing would it be if it was defeated by geopolitical factors?

"Mr. Zhang, how long do you think it will take for Yike's production capacity problem to be solved? How should Yike handle the challenges it faces next?" asked the host of Sohu Finance.

Zhang Chaoyang shook his head twice, pondered again and again, and then said: "Yike's matter is difficult and complicated. This cannot be explained clearly in a few words, and almost no one can explain it clearly, but I always have expectations for him."

He frowned again, shook his head for the last time, and sighed worriedly: "This is the time when our survival is in danger."

As a veteran in business, Zhang Chaoyang's worries in front of the camera felt very real to the audience, and many domestic media and even bloggers were giving advice to the current Yike.

Regardless of whether the idea is useful or not, everyone has gradually reached a consensus that now is really the time of crisis for Yike's life and death.

On April 15, Nasdaq’s fixed information disclosure time, Yike was rapidly catching up with the companies that had been shorted before. Its position had reached 10.5 billion US dollars, ranking fourth.

Alibaba is US$11.9 billion, Tesla is US$11 billion, Apple is US$10.6 billion, and Yike is US$10.5 billion.

On this day, Fang Zhuo ended his inspection tour of the mainland's semiconductor industry chain and returned to Shanghai to attend the recent intensive meetings of the Yike General Office.

"This is a time when our sincerity's survival is at stake. I saw what Mr. Zhang of Sohu said. What do you think?"

Fang Zhuo had a cup of bitter coffee before the meeting and started by quoting the slicing video he saw on Douyin.

"It's indeed not easy." Qi He answered objectively.

Fang Zhuo nodded and said with a smile: "Yes, how can there be such an easy thing in the world for us? This is the time when our sincerity's survival is at stake. However, the core of ice is to work tirelessly within, and those who are ambitious and talented forget about the outside world. I want to repay Yike's glory in times of crisis."

He paused and then said: "This is a time when Cheng's survival is in danger, and it is also a time to turn the tide."

"Mr. Fang, if you record a piece like this, it will definitely get a lot of likes and retweets. It will also push up our stock price and boost the morale of everyone." Yu Hong said sincerely.

"I feel that there are difficulties, and there is hope. I saw everyone working hard during this trip, and I felt very comforted." Fang Zhuo said about his feelings about the inspection trip, "Everyone is also very concerned about it. Yike is willing to provide the greatest help within its capabilities.”

Everyone nodded. This time, no matter from what aspect, everyone’s expectations and support for Yike could be felt.

"The problem now is that we may face the possibility of the situation deteriorating further." Yu Hong considered, "The production capacity issue needs to wait. We still have notebooks to sell this year. Intel and AMD both have licenses for us, but we don't know At some point, this line may be cut off, and the company is not fully prepared. Even if the chip is designed, it still needs the support of advanced manufacturing processes.”

Yike's Y-Book notebooks have actually sold well in the past two years, but they have been overshadowed by the performance of mobile phone products. Because of its performance, Yike's goal for this line is to become the top three in the domestic market. With the top five in the world.

Last year's global notebook shipments were approximately 164.44 million, down 6.3% from the previous year. Judging from this development trend, Yike's efforts in this field do not seem to be a good choice.

However, Yike has sold 21k last year, approaching the fifth position in the world.

This effect is somewhat beyond internal expectations, and is generally believed to be driven by the power of the smartphone brand, which makes everyone even more dissatisfied with the positioning of a brand assembler.

However, not wanting to be a brand assembler is not just a matter of hardware, but also the expansion of the system ecosystem, the vast sea of ​​drivers, various compatibility supports, etc. are all very difficult.

From this point of view, it is good to use the advanced technology of Ice Core to earn some hard money from AMD. High value-added products do have high tangible and intangible thresholds.

Fang Zhuo responded calmly: "Let's do it step by step. When you are pinched, face it. Once it happens, it will be familiar again, and everyone will get used to it."

Qi He asked at this time: "Mr. Fang, what kind of help can SMIC provide..."

"SMIC is not bad." Fang Zhuo simply answered.

Only a few people knew that Dr. Liang led his team to enter SMIC, and he did not intend to talk about such news on this occasion. SMIC is the most advanced foundry manufacturer in China besides ice cores. It currently uses 20nm to manufacture for Yike Optoelectronics. "Morning Light" series of chips is also the latter's new choice after verifying GlobalFoundries' technology.

"Our notebooks can still be sold, and our smart home is growing at a very good rate. There is actually a lot of profit mining in the YMS ecosystem, and there is room for the development of technical service fees." Qi He said one by one that he could make up for the operating profit this year. Regarding the business acquisition, "Yike Cloud may need to digest this year's corporate performance, but the performance of the European market will not be affected too much, and it may be able to maintain a 30% growth."

Yike's production capacity is affected by the three series of products: Mars, Selfy, and Galaxy. Among them, mobile phones are its core business, tablets are also Yike's previous second growth curve, and notebooks are the third curve.

Liu Qiangdong was also calculating next to him: "Notebooks have grown by 30%, and revenue has been supplemented by 3.9 billion US dollars. Smart homes have grown by almost 1 billion US dollars. YMS ecology has slightly more advertising, which is 1.5 billion US dollars. Yike Cloud's situation this year Yes, more than 2 billion U.S. dollars, as well as technical service fees. We collect some money from Tesco, Mi Tuan, Douyin, and Yixin, adding up to 3 billion U.S. dollars... and the transfer of Yike Optoelectronics. The technical cost, even after discounting, is 1 billion US dollars, which is a lot.”

Qi He's mental arithmetic speed was very fast and he gave an answer: "12.4 billion US dollars!"

Fang Zhuo couldn't help but laugh and said: "You guys know how to pick on the skin. This year's revenue target is 80 billion US dollars, which is success. Let's live through the hard times."

This was a huge decrease based on last year's standards, but Yike has grown rapidly in the past two years. If we use the revenue two years ago as a reference, 80 billion is not bad.

The target previously discussed within Yike was actually 90 billion. However, Fang Zhuo felt that there was no need to be so nervous at this special stage.

But now that the conversation was over, he continued to listen to the next plans for different businesses.

After such a morning meeting, after everyone else left, Yu Hong asked about a more promising direction: "Is Dr. Liang's research and development at SMIC going well? Is there no problem with the integration between the two sides?"

"It went well, well, it went very well. There is nothing dissatisfied with the team selected by SMIC." Fang Zhuo paused for a moment and smiled, "I heard that Dr. Liang's first words when he arrived at SMIC were, 'The record of large companies can be checked. ’, and everyone was convinced.”

"You have a good attitude and can make jokes at any time." Yu Hong was busy from morning to night during this period, and she looked a little haggard, but she didn't feel it herself and was still thinking about the company. "If Dr. Liang can The smooth launch of 10nm. According to this experience, if SMIC is also restricted, the inventory of this batch of 10nm chips will only be 60 million units. "

SMIC needs to ramp up its yield rate and production capacity. If everything goes well, if it encounters the same photoresist dilemma, SMIC will only have half a year's production capacity.

Yu Hong frowned and said: "Being beaten passively like this is indeed a struggle. The key is to restore the supply of photoresist. At least it can maintain the supply of basic production and allow the blood to flow."

Fang Zhuo nodded slightly and did not mention the possibility of a photoresist breakthrough within the year, but mentioned something special: "The capital asked Bingxin to submit another list of special enterprise support. Now it is necessary to concentrate more resources. Once the If the core achieves a 10nm breakthrough, if it also encounters restrictions, it will inevitably lead to a larger-scale confrontation. "

Yu Hong walked a few steps, asked the robot in the office to make a cup of coffee, then sat on the sofa, frowning and said: "Washington has imposed severe restrictions on Yike since it decided to take action, changed the law, and kicked it out of the market. The companies that instigated our allies are desperate to kill us.”

"I now feel that this is still very iconic. What I mean is that if Yi Ke survives, it will be a sample of resistance to Washington."

"It kind of helps break down some of the fear that everyone has."

Fang Zhuo said with a smile: "Mr. Yu has elevated the meaning. We just do our best in the moment. Other influences and fluctuations may or may not occur. They are all natural."

He continued: "On the way back, I was also thinking about the market value of Yike. Later, I still felt that the market value is not the market value. We have developed to the point where we now have various IC designs, advanced manufacturing processes, and real industrial chain companies. These are all valuable.”

Fang Zhuo also took the coffee handed over by the robot and said with a smile: "This robot is also a good achievement. The visual recognition, data processing and command understanding are much better than before."

He took a sip of coffee: "Yike has solved the performance problem and built a certain ecosystem. Now if we break through the production capacity limit, everything will be fine."

Performance, ecology, productivity.

Yu Hong couldn't help but nod. This was a concise summary of strategic key points.

She hesitated and asked a question: "Is there any news about the photoresist?"

Fang Zhuo asked calmly: "How can you see it?"

"Look at the look in your eyes." Yu Hong stared into the eyes of the man in front of her. "The eyes seem different."

Fang Zhuo: "..."

He drank half a cup of coffee and said with a smile: "No, I just prayed to God by the window, hoping to receive blessings so that I can have more abilities and ideas to solve the problems we face.

Yu Hong looked at Mr. Fang suspiciously and started talking nonsense again.

"But God didn't give me any movement, and there was only my own voice in the office." Fang Zhuo looked at his hands stirring up the business storm, "I realized then that I don't need blessings, I am the strongest me."

"Okay, okay, stop talking. I won't guess anymore." Yu Hong felt that a certain tendency had been verified, but she stopped asking. The hard days were longer and shorter, but it didn't seem to matter now. Yike relied solely on the domestic market Then you can survive.

This is the brand power of Yike over the years, the R\u0026D investment over the years, and the hard work over the years.

Fang Zhuo spread his hands: "If you ask again, I will have a detailed chat with you."

Yu Hong glared at the man in front of her and raised her wrist to check the time: "Get ready for the meeting. No matter whether it's good or bad, no matter what uncertainty there is, it's up to you."

Fang Zhuo stretched out his hand and sent Mr. Yu away as a gift.

When he was the only one left in the office, he thought about the company's affairs for a while before pulling out a research and development report from Xinyang Luzhou from the drawer.

Fang Zhuo read it carefully for a while and had to admit that he really couldn't understand it at all, but it was enough to understand the meaning of the conclusion.

He silently recited the nouns in the report several times, took out the pen, ink, paper and inkstone, and after a little brewing of emotions, he wrote down the eight words "polyester cyclic acrylate".

Fang Zhuo admired the eight words for a while, hesitated for a moment, and gave up the idea of ​​hanging it in the office.

Forget it, it's just a possibility, let's wait for the specific implementation.

Fang Zhuo sighed, put away the restlessness in his heart, and locked the words in the drawer.

Whether it is photoresist or Dr. Liang's research and development, as long as one of them turns around, Yike's current struggle will be greatly alleviated, and the entire system will have more vitality.

However, the current struggle is also a real headache...

Fang Zhuo is confident in the future, and he doesn't mind talking about Yike's current situation.

He returned to Shanghai, and while handling various tasks, he also took the time to pat the newly evolved robot in his office and introduced the progress of the visual algorithm to everyone.

The rough version of Yike's robot opened the audience's eyes, but most people in the short video comments were still asking about the production capacity of Yike's mobile phones.

Fang Zhuo saw that there were always such questions, so he objectively introduced the situation and acknowledged Yike's struggle.

Such words from the head of Yike will undoubtedly become the content of news reports, but whether the stock price decline or the market performance is actually not a secret, and there is nothing to hide.

It's just...

Two days later, Nasdaq's data at the end of April was released. The short-selling data that was originally thought to have a bomb effect due to Mr. Fang's remarks actually did not increase but decreased, reducing by nearly 2 billion US dollars.

This data of Nasdaq has become a reference for the media to measure Yike's situation. This sudden drop is really confusing.

Similarly, Fang Zhuo was also quite confused. This time there was no wolf coming, no change in market capacity, and no good news. Why did the shorts run a small wave again?

Gasoline man Kong Yu gave his own opinion on this situation: "Mr. Fang, they may not understand your honesty and think that such a statement is a fraud, so..."

Mr. Fang's honesty has caused people to suffer a lot, and he is often unforgiving with his words. Suddenly, this happened...

So, those with psychological shadows took emergency risks, resulting in such a bizarre scene.

Fang Zhuo sneered: "Is this also considered influential?"

"Yes, this is definitely Mr. Fang's extensive influence." Kong Yu praised, "They also think we set a trap, which is purely judging others by one's own meanness!"

Fang Zhuo happily accepted the praise. Traps are traps, but this time, the upright research and development is a trap set by a gentleman. If you step into it like this again, you deserve to be killed.