Reinventing the Millennium

The leaders of Anhui Province and Luzhou are very satisfied with the progress of risk trial production of ice cores as scheduled or even ahead of schedule.

The inspection originally scheduled for February 15th was first postponed indefinitely, and then moved forward to February 9th. Such a loss and recovery made the leaders' roller-coaster mood become more... more enjoyable.

This year, Anhui Province plans to let Luzhou strive to be positioned as a "semiconductor base" from above. It needs ice cores to have normal production capacity and a certain scale and performance.

Luo Minghua had not mentioned this to Fang Zhuoming before, but it was not difficult to understand the implication of the application.

Fang Zhuo took administrative factors into consideration, even if it did not occupy the first place.

Now, as ice cores have the capability of small-scale mass production, let alone catching up, normal mass production will be a scene that satisfies all parties, including shareholder institutions such as Goldman Sachs and IDG.

One ice core affects the hearts of several families.

The leaders completed their cordial inspection and settled accounts together at the reception luncheon.

The planned production capacity of the ice core production line is to produce 3W wafers per month. If it can be fully loaded...

The ex-factory price of wafers is different in different wafer factories. For a 12-inch wafer, TSMC has the highest price in the industry, about 1,300+ US dollars. Other manufacturers have lower prices than this. The average price is 1,000 US dollars per wafer.

If the monthly production capacity is fully loaded, it will be US$30 million. If it is fully loaded in December of a year, the annual revenue will be US$360 million.

Of course, production capacity cannot be achieved in one step, and orders cannot be achieved in one step.

Fang Zhuo was just having fun with the leaders and mentioned the prospects of the semiconductor industry.

For comparison, he also mentioned SMIC's data last year. Its full-year revenue in 2004 was around US$1 billion, which was the result of the successive commissioning of three factories.

——One built by Shencheng, one purchased by Tianjin from Motorola MOS17, and one started production in Beijing.

There is also the capacity expansion of the production line in the middle.

"Secretary Sun, our city needs to develop an industrial chain and increase its attraction to related companies. This is not my selfish intention based on ice core."

“This is a real thing that benefits everyone.”

"Including my call to Secretary-General Luo, saying that Mr. Hu Zhengda and Mr. Hu's company should come to our city and give him the best preferential policies. This is not because I want to bring Professor Hu here for the ice core, but because the upstream and downstream can bring him here. The value of wafer manufacturing expands.”

"Take Lao Ni's TV as an example."

"He buys a chip from Philips for US$125. Our ex-factory price of a wafer is US$1,000. How many chips can be made from one wafer?"

"Taking into account the yield rate, we count one wafer as 450 chips, so the total revenue of the chips it packages is 125*450=56,250 US dollars."

"We sell a wafer for US$1,000, and the cut chips are sold for US$56,000. This is a 56-fold increase."

"So, our city must have a long-term vision and don't be afraid to provide policies. If people don't come, it will be in vain."

Fang Zhuo calculated another value at the end of the luncheon.

This calculation made Sun Ruolong's eyes turn red.

He almost grabbed Mr. Fang's arm: "56 times? Then why doesn't Bingxin make the money himself? It's better than Bingxin makes it himself!"

"56 times is considered a small amount. If the process is higher, from OEM to delivery to customers, it will be at least a hundred times." Fang Zhuo said with a smile, "If you want to make money with ice core, you have to have this ability to make money. Which one?" No aspect is easy.”

Sun Ruolong added some industry knowledge: "Isn't this wafer manufacturing the most difficult? Ice core has even done this, but it's not easy to develop other things?"

"Wafer manufacturing is not the most difficult. The most difficult thing is continuous research and development and the pursuit of the most advanced processes." Fang Zhuo shook his head, "We first do what we can do well, and then look at other things. It is still like SMIC, which also learns first. Let’s improve the production capacity and then start packaging.”

He continued: "According to my point of view, ice core does not have to do everything. If a good packaging factory comes to Luzhou, we can invest. It would be good to ensure that our goals are consistent."

"Anyway, we just study hard, make progress every day, and strive to pay taxes to our city as soon as possible."

Sun Ruolong still took Mr. Fang's arm and expressed his position: "Mr. Fang, let's work hard together. You must tell me what the ice core is missing. Don't keep it in your heart. When everyone adds firewood, the flames will rise. I am a cobbler. Zhuge Liang, the boss above, can’t do any big things!”

Fang Zhuo readily agreed, it doesn't matter who Zhuge Liang is, it's best if the flames are high.

Bingxin's holiday will end on February 17th, and then there will be a rotation of technical backbones. From now until the end of February, Bingxin's actions to improve the yield rate will be outlined. At the same time, it will also work with Changhong, Philips, Jieni, etc. Contact upstream manufacturers.

Morningstar Semiconductor from Baodao did perform well, but Changhong also needs to weigh the situation of its inherent partners before making a final decision.

But even so, Morningstar Semiconductor still followed their nanny-style service and began to station its R\u0026D team in Luzhou, intending to optimize the design of Changhong's products.

"What if Changhong didn't choose you in the end?" Fang Zhuo asked when receiving a phone report from Morningstar Marketing Director Wei Boyun.

Wei Boyun first sighed and then smiled: "It's going to rain and my mother is going to get married, so there's nothing we can do. Let's just accumulate experience."

Fang Zhuo felt that the attitude presented by Morningstar Semiconductor was at least in place.

Contacts in this area need to be further weighed. Fang Zhuo’s flight back to Shanghai is scheduled for February 14th. He will return to Shanghai together with Su Wei, Vice President of Yike. He will confirm the progress of Yike before giving himself a break. I went to Tokyo to spend a short vacation with my parents and stopped by Sony.

The last thing Fang Zhuo did before leaving Luzhou was a meeting with Ni Runfeng, Zhang Xuebin and other senior executives of Changhong and Meiling.

Looking at their identities alone, the composition of the members of this meeting is rather strange. Fang Zhuo neither holds shares in Changhong nor has a shareholding relationship with Meiling, but he just convened such a discussion meeting.

"Mr. Ni, Mr. Zhang, I am an outsider in the television industry. I don't understand some things, but I may see some things more clearly."

"Whether it is Changhong or Meiling, the current second- and third-tier domestic TV companies are not optimistic about their competitiveness compared with TCL or Konka."

"Mr. Ni, Chairman, and President Zhang, when we look at a company, we look at the industry trends and the strategic direction of the company."

Ni Runfeng smiled bitterly, already knowing what Mr. Fang was going to say.

Zhang Xuebin was attentive. This was the second time he met Mr. Fang today, and he was still very curious about the views of the richest man in the mainland.

As expected, it is still a cliché.

"Domestic TV panels account for 70% of the cost, chips account for 10%, and up to 80% of parts must be purchased from Japan, South Korea, the United States and Europe. This kind of control must be observed and guarded against."

"It is precisely because there is no core technology. Among Changhong, Meiling, Konka, Skyworth and TCL, which one's core strategy is not a price war?"

"Mr. Zhang, you are from Skyworth. Do you think this is true?"

Fang Zhuo knew that Lao Ni was "stubborn" and started chatting with the "Prince" during this trip.

Zhang Xuebin nodded slowly: "It's generally like this, but price wars can have good and bad results. Team building and channel control can make the price wars of different companies have different effects."

"Yes, Skyworth is good in this aspect. This is Mr. Zhang's experience. But now that you have come to Meiling, our country is not fighting one round, but several rounds of price wars. As a result, home appliances are in a red sea, and Meiling is also Dying, otherwise Changhong would not have become the largest shareholder now." Fang Zhuo said.

Zhang Xuebin still nodded, this is what the home appliance industry is like today.

"Such a red ocean competition will not help even if we become the market leader. I believe many companies can see this situation. So far, I have only seen TCL take strong actions to deal with it." Fang Zhuo gave an example, "TCL Last year, we acquired France’s Thomson Electronics to expand overseas.”

"TCL Li Dongsheng, when he saw this situation, he went abroad to enter the foreign market that has not yet completely become a red ocean. He wanted to break through in terms of scale."

Fang Zhuo clasped his fingers on the table: "But this cannot solve the core problem. The core parts of the industrial chain are never good. What is the use of TCL even if it temporarily expands its scale? If Thomson Electronics is profitable, it will not sell to TCL."

Last year, TCL and French consumer electronics giant Thomson Group established a joint venture, TCL-Thomson, which caused quite a stir.

Because Thomson once committed itself to the world-famous CEO Jack Welch, but was ultimately abandoned due to failure in revitalization.

Welch also met Li Dongsheng when he came to China. The two had a conversation on the same stage. Welch said, "General Electric failed to turn Thomson into a profit. Mr. Li is now taking on a major challenge of global significance." Many people cheer for TCL.

Li Dongsheng confidently gave a time limit of 18 months, and it would take 18 months to turn Thomson from losses to profits.

All the senior executives here today knew this. Zhang Xuebin heard Mr. Fang’s tone and asked curiously: “Mr. Fang, are you not optimistic about TCL’s acquisition of Thomson’s TV business?”

"As I said before, the core that is controlled by others cannot be solved. If you want to rely on scale to reduce costs, TCL has very little room to maneuver in Europe." Fang Zhuo shook his head and gave a clear opinion, "Moreover, the form of domestic channels this year is also different. .”

He said seriously: "Suning and Gome are listed, and capital promotes the development of domestic electrical appliance stores."

"Dazhong Electric Appliances was acquired by Tesco and will be the Amazon of the East."

"Soon, you will know what channel is king."

"Domestic electrical appliance stores will become more and more crowded. You TV companies without core technology will not only be impacted by foreign brands, but also be manipulated by channels."

Fang Zhuo looked at Ni Runfeng: "So, Lao Ni, what we really need to do and what is worth doing is not to expand the scale outwards, but to look inward for the core technology of the industrial chain. Without this stuff, everything we do will be in vain."

Ni Runfeng didn't look at Mr. Fang and sighed at Zhang Xuebin.

Zhang Xuebin felt that Mr. Fang's words made sense. However, Meiling definitely didn't have the money to buy panels now. Changhong might be able to make some budget by moving left and right.

"Mr. Fang, this is not the first time you have told me about the interview..." Ni Runfeng spoke.

Fang Zhuo interrupted: "Mr. Ni, this should be the third time I'm talking to you. Today I'm not just talking to you, I'm talking to Mr. Zhang, Changhong and Meiling. Some things require determination and courage. If you know you have to do something, you must do it.”

"I'll just advise you this three times and I won't mention it next time."

"But no matter what, I think the production capacity of Ice Core and the filing of Morningstar Semiconductor are good news. It can solve 10% of the cost dependence of domestic companies such as Changhong. What do you think?"

What else could Ni Runfeng say besides nodding.

Mr. Fang is even a little angry now that he has spoken.

He couldn't help but think of what Mr. Fang said last time-forcibly implementing the panel investment strategy at the end of his term, but this cannot be done at once.

The meeting did not last long. In addition to talking about the dependence of domestic TV on imported components, Fang Zhuo also talked about the future prospects of online B2C. He hoped that they could have healthy cooperation with each other.

Zhang Xuebin took a more proactive stance on this point, believing that Meiling can increase its bets on online channels, and he is willing to believe in the development of this industry.

Having said that, Changhong can still be considered a second-tier brand, while Meiling is more of a local brand. Even if it is considered a third-tier brand, it is already a bit elevated, and it does not have many bargaining chips of its own.

On February 14, Fang Zhuo and his team boarded a flight to Shanghai. On the way, he chatted with Xiao Su about the process of yesterday's meeting.

Su Wei asked curiously: "After three times of persuasion, this panel must be done?"

Fang Zhuo said calmly: "I lied to Lao Ni."

"Oh?" Su Wei waited for the next step.

"Although I have tried to persuade him three times, I will talk to him again if I have the right opportunity next time." Fang Zhuo shook his head and said, "For quite some time, the better Changhong is, the more ice core production capacity can be filled. Look at Morningstar Semiconductor. , what they did for the order."

"Ice cores will also need orders from now on, and a large number of orders will be needed, because the own process technology is not dominant."

"Changhong is a good comrade, and I hope it can be better."

"I am also leaning towards Morningstar Semiconductor now. Its growth potential is very good. If Bingxin becomes Philips' OEM, there will be less room for display than joining Morningstar to challenge Genie's market position."

Fang Zhuo said thoughtfully.

Su Wei smiled and said: "No matter what, this year's Spring Festival, the ice core is not in vain. The risky trial production is completed, and it will be back on track soon, right?"

Fang Zhuo nodded. Although there was still a matter of yield, it was indeed on track.

"What if you go to Tokyo at the end of the month and our e-commerce store goes online?" Su Wei asked about her family affairs.

Fang Zhuo said strangely: "What should I do?"

"Since you, the big CEO, are not in charge in China, Tesco's launch on March 1 will have little momentum." Su Wei was half teasing and half serious.

Fang Zhuo suddenly realized: "With Mr. Su here, I can rest assured that it will be online as soon as it is online. I will pay attention to it in Tokyo. Sony's matter will not drag on for too long. I will be back soon."

Su Wei glanced at Mr. Fang: "Don't blame me if you mess up."

Fang Zhuo smiled slightly: "I believe in President Su, and I believe in Xiao Su. Xiao Su is the one who wants to betray the leader. Isn't Xiao Su easy to catch?"

Su Wei stretched out her hand to grab Mr. Fang's wrist and smiled brightly: "It's really easy to catch Mr. Fang. Mr. Fang didn't lie."

Fang Zhuo shrugged: "I put in the bid and sold it, willingly, that's all."