Behind the scenes technology company

Chapter 51 Backlash from the Industry

As the world's largest manufacturer of processor chips, Microfruit did not make the decision to cut prices out of enthusiasm. After the technology exchange, Microfruit obtained information related to room temperature superconducting technology. Through continuous verification and research, It is even more clear that the birth of superconducting processors will have a huge impact on the company's most fundamental interests.

It can be said that Microfruit's choice to reduce prices has far-reaching strategic significance and is preparing for changes with the arrival of superconducting processors.Capital pursues profits. In the absence of a major threat to the company's survival, Weiguo itself is the leading industry in the entire processor chip manufacturing industry. More people think that price reduction is unreasonable and a crazy and wrong decision. This is not the case.

For a chip company, Weiguo has been on the road of competition since its inception. The performance breakthrough of each generation of products has followed Moore's Law, and there has been a huge improvement. This is not just the result of technological development. Regularity is also what is needed for the development of a broad market. It can kill a bloody road among thousands of manufacturers, improve performance, expand the market, and earn more benefits.

The development of science and technology will always fall into slow progress or stagnation. Before there is a new breakthrough, Weiguo Company decisively chose to squeeze toothpaste.Scientific development cannot be separated from the support of a large amount of funds, and maintaining the frequency of product updates every year is not an easy task for companies, especially when technology development is slow, how to bring more benefits to the company, I have no choice but to make a fuss about product performance.

Having always been ahead of competitors, user demands are increasing day by day. Considering the financial needs and time for technological development, the performance breakthroughs of each generation of products have gradually slowed down. However, at the same time, in order to cater to the needs of the market, we have maintained It is an inevitable choice for enterprises to update every year so as not to fall behind.

The influence and impact of superconducting technology is not one country and one company, but affects the whole world.With continuous research and experimentation on room temperature superconducting technology, Micro Fruit is aware of the coming chip revolution.If this most fundamental change in materials is not prepared in advance, it will make Weiguo face a difficult situation.

With the unanimous consent of the board of directors, the decision of price dumping was born.The first thing to do is to clear the backlog of inventory. The fundamental innovation of the product has made the previous inventory backlog completely useless. Before the profit plummets, even a [-]% discount can make the old product available. A huge profit.

Killing multiple birds with one stone, while lowering prices, further seizes more market share. The chip industry itself is an industry of small profits but quick turnover. Using a larger market to face high production costs, the rapid growth of market share also gives This has provided the impetus for the continuation of Weiguo's high-level plan.

More industry influences are reflected in Huaxia, and the large-scale price cuts make it difficult for bottom-level companies to survive. While providing ample cash flow for their own company's scientific research, it also makes other companies that covet the leading position exhausted. Response, bought more time for the breakthrough of room temperature superconducting technology.

This is not a mistake in the decision-making of Weiguo Company, but an unequal information.Although there are relatively certain speculations that China has already been able to manufacture room-temperature superconducting materials, in the estimates of Micro Fruit or other countries, there is still a certain distance from the production of large-scale new materials.

Such an estimate cannot be wrong. In the first few months of chip dumping, the chip industry represented by Huaxia had no power to fight back. If the cost of superconducting alloys cannot be reduced for a long time, then in terms of chip design, the global The semiconductor industry is still the processing plant of Weiguo, and a sound ecosystem is still a sharp weapon in the hands of Weiguo.

The dumping of inventory lasted for six months and then stopped. Microfruit’s inventory chips have been greatly released, and while the profits are being distributed, the company has obtained sufficient funds to make different corporate decisions.However, the decision to cut prices is not without risk. The cessation of dumping is partly due to the clearance of the backlog of inventory, and more reasons are from the backlash of the industry.

Purely from the perspective of inventory clearance, the dumping will not stop, and Weiguo can even engage in pre-sales to continue to maintain the decision to cut prices. This is a thankless thing. The market has its own saturation. The victory and the huge loss will deal a heavy blow to the company in the near future, and the maximum dumping time of Weiguo Company regardless of cost can only be maintained at six months.

The second is the backlash of the entire industry. Weiguo holds the most lucrative profits and is at the top of the industry's food chain. While cutting prices, Weiguo is also continuously reducing the profits of the bottom and pillar industries. The bottom industries are sucking blood, which reduces their own costs.

Before China announced its "groundbreaking" plan, the entire industry cooperated with Microfruit to reduce production and reduce costs due to concerns about superconducting technology. However, after the plan was announced, the entire industry was unwilling.

Judging from the results, Weiguo's time struggle was shattered, and a large amount of funds fell into Weiguo's pockets. The cooperation of the entire semiconductor industry did not get the slightest benefit from it, through the suspension of production of electronic components, insufficient supply, and strikes. There are various reasons for resistance.

Microfruit also had to deal with dissatisfaction from the entire industry, and the plan was discontinued.More information disclosure is well known to the public through the media, and the price reduction of Weiguo Company has brought bad results to itself after all.

At the beginning of April, some media broke the news that Weiguo's suppliers had stopped production, which opened the prelude to the siege.A steady stream of suppliers complained that Weiguo suppressed the industry in order to reduce industry profits to maintain their own consumption and rob the market.

Ten days after the announcement of the "ground breaking" plan, netizens discovered that Weiguo had quietly restored the product to the original price, which immediately sparked more discussions.

"Damn it, I haven't bought it yet. Blood loss!"

"I bought it, hehe, depending on the situation, Weiguo Company can't hold it anymore, suck the blood of the bottom industry, and benefit everyone. I don't believe you when you say you're not crazy."

"I really don't understand this wave of operations. The inexplicable price cut, and the inexplicable return to the original price, account for so much market share, so it shouldn't be so crazy."

In mid-April, more semiconductor companies went on strike to demand compensation from Microfruit, and some even imposed legal sanctions on Microfruit for disrupting market order.Of course, in fact, the losses suffered by Microfruit were within the acceptable range. Due to the pressure of public opinion and the restoration of industrial order, on May 5, Microfruit announced the restoration of the original price due to insufficient production capacity and the increase in the price of supplied components. Suppliers were appeased in the form of subsidies.

Under such circumstances, the counterattack from China was initiated by the technology companies behind the scenes, and the second war in the chip market began.

(End of this chapter)