Rebirth: My 80s

The art of war says: Food and fodder must be sent ahead before troops move.

They say shopping malls are like battlefields.

In the business world, the rule is: advertising comes before the product.

With the release and order conference of Longteng 1 approaching, extensive advertisements have been put out in both the mainland and Hong Kong.

According to the original plan of the sales department, there would be no advertisements in Hong Kong for the time being. The current sales of Longteng 1 are only targeted at the mainland, which is what the sales manager He Yuanwei said - to take over the base first.

It was Li Jiankun who instructed the advertising department to carry out the placement.

Placing advertisements in Gangcheng is not for the people of Gangcheng to see, and it does not conflict with the sales department's plan. Before taking over the base, there is no plan to expand the business outward. However, in Li Jiankun's view, this can be done in a short time.

Instead, they used the port city as a megaphone to announce to the world:

China officially enters the storage chip market!

People in later generations all know that there are only a handful of companies in the world that produce chips.

Even teenagers know that when they configure their first computer, they should use Intel or AMD processor chips.

There is almost no other choice.

why?

Admittedly, high technical difficulty is a factor.

But it is not the main factor.

Let’s go back to the field of storage chips.

You have to know that in the 40s, there were about 50- DRAM manufacturers in the world. By the s, there were only three left:

Samsung (South Korea), Micron (US), Hynix (South Korea).

It was not until 2015 that my country began to vigorously develop its DRAM business as its annual DRAM chip procurement amounted to tens of billions of US dollars and was influenced by the international situation. As a result, companies such as Unigroup Guoxin, GigaDevice, and Dochip were born.

But the road to development is also quite difficult.

The main reason is that the competition on this track is too fierce!

It is not just a matter of money, but also means the control of an indispensable high-tech resource - this can have many far-reaching impacts and even determine the world pattern to a certain extent.

Li Jiankun knew very well that as long as he produced DRAM chips and did nothing, someone would try to get rid of him.

War is inevitable.

Instead of responding passively, why not take the initiative?

Come on, kill him or cripple him.

As Li Jiankun expected, after the news spread to the world through Hong Kong media, someone immediately jumped out.

Japan, the United States, South Korea, and Taiwan are all good.

Most of the US and Taiwanese media used a mocking tone, questioning whether my country could produce high-quality DRAM chips.

The Japanese media are getting anxious.

Nissan's DRAM business is huge, and at one time it occupied 60% or even more of the global market share. High production means high investment and large scale, but now the owner sees that it is jumping around too much, so he put a lock on it, causing a sharp drop in Nissan's DRAM sales.

Japan's huge DRAM chip production needs to find other markets urgently to absorb it.

Is there a better choice than the Chinese market, which is just a stone's throw away, has a population of one billion, and where computers are gradually being accepted by more and more people?

An article in the Asahi Shimbun is titled:

【It is a very unwise choice for China to produce DRAM chips! 】.

The article uses a serious essay format to logically and rigorously demonstrate this point from several aspects.

such as:

Japan's DRAM chip technology ranks first in the world, and the two countries are so close to each other that the logistics costs are not high. Japan can fully provide China with high-quality and low-cost chips.

China's economy is not developed, and many basic areas still lack a lot of funds for improvement. Under this premise, China should not invest huge amounts of money to produce a product that is not as good as its neighbors.

The article ends with a stern warning.

It is claimed that if China's DRAM chips lose in the market competition, it will be a serious blow, which will make the situation worse for the country's already poor economic situation!

There is also an article in the Yomiuri Shimbun titled:

【There is a lack of communication, Japanese companies can provide help】.

I don’t know who wrote this article, but it fully demonstrates the love for neighbors and the words are very nice.

The article shows that many Japanese companies are willing to invest and set up factories in China with their most advanced DRAM technology in the world to help the development of China's DRAM industry.

Korean media also made quite a stir.

But there was a kind of...king's contempt in his words.

There is an article in the National Daily entitled:

【Imitation? A road doomed to failure】.

The title is a summary of the content.

It’s as if DRAM chips belong to them and China is not worthy of manufacturing them.

However, it must be admitted that South Korea has some capabilities in the DRAM field.

After the DRAM business of Xiao Ri Zi suffered a blow, the vacated global market share did not fall into their pockets as the United States wished.

It was basically swallowed up by South Korea.

As far as Li Jiankun knows, in the bloody forty years of the DRAM industry, there is one company that not only survived, but also killed countless competitors and occupied a dominant position for a long time.

This company is Samsung.

Why is Samsung so powerful?

In addition to South Korea's national support, there is another key reason:

Samsung is good at something called "counter-cyclical investment."

The DRAM industry follows a cyclical pattern, which industry insiders have summarized: for every year that DRAM semiconductor storage makes money, it loses money for two years, the so-called "profit one, loss two."

Under this strong cyclical law, it is very difficult to survive for a long time.

DRAM manufacturers need to have strong cash flow and financing capabilities to maintain high-intensity R&D expenditures and keep the team stable.

In a loss cycle, DRAM manufacturers need more money to survive; in a prosperous cycle, they cannot be careless either. Manufacturers need to be very cautious when choosing the time to expand production capacity, otherwise, it is likely to lead to oversupply and profits turning into losses.

Samsung's counter-cyclical investment strategy has been included in the textbooks of countless business schools in later generations.

Of course, it's nothing original.

As early as more than 2,000 years ago, our business saint Fan Li mentioned in "Ji Ran's Seven Strategies": "When there is water, we can build cars; when there is drought, we can build boats. This is the law of nature."

This means that when there is drought, you should invest in boats, and when there is flood, you should invest in cars.

This is the business strategy of investing in TD Counter-Cyclical.

The so-called "Tao is the movement of opposites, and opportunity lies in the return of heaven and earth."

Samsung has mastered this trick to perfection. They take advantage of the cyclical nature of the industry and when the industry enters a downturn and competitors shrink in size, they do the opposite: they increase investment, expand production capacity, and further lower prices, thereby causing their competitors to suffer greater losses or even go bankrupt.

In other words, we will all perish together, but I have more money, so I will burn you to death and I will continue to live.

Samsung, relying on the national strength of South Korea, has adopted the strategy of "counter-cyclical investment" one after another, defeated countless competitors and become the leader in the semiconductor storage field.

At present, Samsung is making its first "counter-cyclical investment".

In 0.3, the war between Japan and the United States was in full swing, the DRAM market was generally depressed, and prices plummeted. The price of mainstream DRAM chips fell from an average of US$ per piece in to US$ per piece.

In 64, Samsung built its first memory factory and mass-produced 1.3K DRAM chips at a production cost of $ per chip. Facing the industry's cold winter, Samsung not only did not shrink its investment, but instead began to invest in reverse and expand its production capacity.

By the end of 1986, Samsung Semiconductor had accumulated losses of US$300 million, its equity capital was completely depleted, and it was close to bankruptcy.

At a critical moment, the South Korean government stepped in to "save the market", investing a total of nearly 3.5 million US dollars, and endorsed Samsung in the name of the government, raising billion US dollars in individual fundraising.

So now Samsung is doing very well, swallowing up the DRAM chip market share lost by Japan, and its performance is booming.

This is the confidence of the Korean media.

Ran Zi compiled all the newspaper excerpts and the DRAM market's reactions and presented them to Li Jiankun.

This will become a long-term routine in the future.

Because of the "Declaration of War", Li Jiankun has issued it.

Moreover, he would take the initiative to provoke a fight.

Since war is inevitable, why doesn't he be the one wielding the sword?

The winner takes it all, there's nothing much to say.

The entire Huadian Industrial Park was actively preparing for the launch and ordering conference of Longteng 1. Li Jiankun was also busy. He did two things:

1. Use your personal connections in the mainland to personally send invitations to some major DRAM chip demanders and ensure that they will send people to participate.

For example, post and telecommunications.

2. Immediately send Longteng 1 chips to professional testing institutions in Hong Kong, Japan, South Korea, Taiwan, the United States and other regions to test the performance and failure rate of Longteng 1.

Subsequently, Hong Kong City was the first to announce the test results.

The data of Longteng 1 is confirmed to be completely consistent with that released by China Huadian Corporation.

Next came Japan, the United States, Taiwan, and South Korea.

Li Jiankun paid for these tests and signed contracts. The testing agency dared not not disclose the information or play tricks.

the strange thing is.

In addition, the Hong Kong media published a series of news with shocking headlines afterwards.

The media in several other regions, which had been very active before, have all fallen silent on this matter.

So, Li Jiankun was happy to be quiet.

Focus your attention on the launch and ordering conference of Longteng 1.

……

……

June 6th.

The Huadian Industrial Park is decorated with lights and the gates are wide open.

At daybreak, the nine-story Huadian Hotel was brightly lit, with lights in all the rooms - the hotel had been fully occupied a few days ago.

When it was bright, waves of people came to the Huadian Industrial Park from the major hotels and guesthouses in the Special Administrative Region.

It must be said that there are really a lot of people in our country.

The sales department cast a wide net to invite people, and Li Jiankun made precise invitations to major customers. With the help of media advertising, it was thought that there would be a high probability of 200 manufacturers from across the country coming. Assuming an average of five people from each company, that would be a total of 1,000 people.

result.

It should have doubled.

It is difficult to say exactly how many manufacturers have come now. We will know after the reception is completed and the statistics are counted.

Some people are from certain units, not clients, but they also come here...

As for the reason, it’s hard to ask.

Asking means coming here to learn.

Fortunately, after so much preparation, we have several backup plans for the reception.

Yan Xue, a student majoring in Chemistry at Harbin Institute of Technology, joined the Special Economic Zone Huadian Company last fall. She is currently working in the photoresist factory in the industrial park. Because of her sweet looks, she was transferred here to work as a temporary receptionist.

At this moment, Yan Xue was leading a group of "retail investors" assigned to her——

The company did not send an invitation, but customers who came on their own initiative but who really had demand for DRAM chips strolled around the park and were taken on a tour.

These retail investors basically come from private enterprises, those small workshop-style factories that are related to technology.

The launch and ordering conference of Longteng 1 is scheduled to be held at : in the morning, which is nearly two hours away.

"Comrade Yan, may I ask you a question?"

Yan Xue paused and looked at the person who was talking. He was a handsome old man. She had a list in her hand, but she didn't pick it up to look at it. If she remembered correctly, it was Ren Zhengfei, and he had a small company called Huawei.

"You don't have to be so polite. Please go ahead." Yan Xue smiled, revealing two little fangs.

"What is the purchase price of a single Longteng 1 chip?" Ren Zhengfei asked with concern.

"Also, do you support small-batch purchases?" an old man nearby added hurriedly.

Yan Xue didn't remember the information of this plain-looking uncle, so she picked up the list and glanced at it. Then she regained her memory and her eyes fixed on a line of information:

【ZTE Corporation, Hou Weigui】

Looking at the nervous expressions of the two uncles, Yan Xue was destined to be unable to understand what these two questions meant to them, and stuck out her tongue and said:

“How would I know that?

“To be honest, I’m just a technician. Because there are too many guests, I was temporarily assigned to receive you.

"As for the price, it will definitely be announced at the press conference."

Ren Zhengfei smiled and said, "You are an insider, so you must know something, right? Longteng 1 has been proven to have a lower failure rate than American chips of the same performance. Will the price be more expensive than that of the United States?"

Yan Xue said: "That's for sure."

The girl thought, shouldn’t good things be sold at a higher price?

Karma!

Ren Zhengfei's heart sank.

I thought I had seized a great opportunity, a path for self-development...

Hou Weigui's smile froze, and he gritted his teeth and asked, "I don't know how the production of Longteng 1 is. For small customers like us, do you think your sales department can allocate supply to us?"

He thought that since the product was better, the higher price was reasonable.

However, this is the manufacturer's first-hand source after all.

All in all, the price should be similar to that of purchasing American chips from first-tier wholesalers, right?

The hope of finding a better and cheaper source of goods has been shattered.

But there are two more important points:

1. It is very convenient to pick up the goods here, it is only a few steps away.

2. Stable supply of goods.

How do they get the goods from the first-tier wholesalers?

There are no first-tier chip wholesalers in the mainland, so you have to go to Hong Kong to find them.

After you go there, you can only take whatever chips are in their warehouse, or you have to wait. The delivery cycle is usually inaccurate. Small businesses like them cannot place orders from first-tier wholesalers.

If you say a few more words, they will become impatient and will not bother to sell to you.

Therefore, the following two problems will arise:

1. For example, they want to purchase relatively cheaper Taiwanese chips, but the first-tier wholesaler's warehouse only has the most expensive Japanese chips, forcing them to increase costs.

2. This batch may contain Japanese chips, and the products produced are of excellent quality and praised by customers. However, the next batch may contain American chips, and if the failure rate is slightly higher, customers will have great complaints.

Not conducive to long-term development.

Yan Xue blinked and asked, "How much do you buy each time?"

Hou Weigui and Ren Zhengfei looked at each other and exchanged glances. On this issue, there was no point in bragging, even though they really wanted to.

Hou Weigui: "Ours is basically 1,000 yuan."

Ren Zhengfei: "We are about 800."

If possible, they would like to purchase less each time.

But if that happens, the first-tier dealers will dislike them even less.

"Only a few hundred dollars?"

Yan Xue stared. She didn't know much about other things, but she knew the company's production capacity. Just think about it, there were fifty fourth-generation lithography machines alone in the wafer factory. There was probably no such wealthy chip manufacturer in the world. There was no other way. They could produce lithography machines by themselves. They were so willful.

Fifty photolithography machines were whirring and whirring, operating like a tiger. After one process, a large wafer was produced, which could be divided into many individual chips...

The output is quite amazing.

"Well, well, I'm afraid it won't be easy."

Yan Xue scratched her head.

The girl thought that if the company relied on such customers, it would go bankrupt and they would starve to death.

The sales department will definitely invest its limited energy into major customers.

Karma!

Ren Zhengfei and Hou Weigui both turned pale, as did the other retail investors next to them.

As expected, the greater the hope, the greater the disappointment.