Chapter 263: Launch of SX-900
Translator: Nyoi-Bo Studio Editor: Nyoi-Bo Studio
20th February 20X2.
Xing Hai Technologies, together with Purple Ray and Teng Xun Corporation had jointly released a new mobile CPU.
The SX-900!
This was a high-end CPU model that was produced using the 10 nanometer chip processing technology. It had an operating frequency of 2.6GHZ, and an Antutu running benchmark 325,000.
As compared to its previous generation, the SX-800, its performance was increased by 55%.
All aspects of its performance were generally better than the high-end flags.h.i.+p Snapdragon 845 released by Qualcomm more than three years ago. It was also comparable to the current mainstream mid-range U Snapdragon 765 on the market today….. However, the SX-900 had a 10% lead in terms of power consumption and GPU performance.
The most important thing was its price!
The Snapdragon 765 by Qualcomm was selling at $385 per unit, almost $400.
Everyone was shocked when the price of the SX-900 was announced at its launch on the 25th.
$195!
Its price was half of the Snapdragon 765.
If manufacturers purchase in bulk, the price could even be discounted further!
The audience at the launch was abuzz as they immediately started whispering to one another.
“f.u.c.k, they’re actually selling it so cheaply?”
“This is pennies, it’s a proper steal!”
“What an attractive price! And it’s a domestic made to boot. I can tell that the prices of mid-range phones are about to fall again.”
“Mr Amon, we’re done for. Our company is about to completely lose our share of the mid-range market!”
Zheng Junming, the president of Qualcomm’s branch in Z country picked up his mobile phone in a fl.u.s.ter and called Qualcomm’s President, Christian Amon to explain this grim situation.
“what?”
Christian Amon nearly threw his phone on the ground. He cried out in alarm, “$195? Are those folks from Z country insane?!”
He found it unbelievable. The greatest cost in making chips was not in production. The production cost itself was not high. There was still a significant amount of profit to be earned from the hardware even if a medium to high end CPU chip sold for $200 per unit.
The greatest cost was actually in Research and Development!
A good CPU required a team of engineers to spend a year or two on its development during which hundreds of millions would be spent.
Then, they had to look for an OEM to conduct the testing and trials. The cost of each test exceeded $200 million.
A high-performance CPU, from the very start to the end, cost a lot to make. Research and development cost up to several billions even hundreds of billions….. This meant that the price of high-end CPUs could not ever be reduced.
Qualcomm was currently in a very difficult situation. With the wave of “100% domestic made products” in Z country, the market had become an unfavourable one for mobile phones containing Qualcomm CPU chips. Consumers were afraid of backdoors and sales volume had plummeted more than 30%!
This was a fatal blow to Qualcomm. The company’s sales in Z country’s market accounted for more than 70% of its total revenue. The consequences would be unimaginable if they lost their share of Z country’s market.
In order to save themselves, Qualcomm announced that it would move its headquarters to Z country. The President, Vice President and several of the upper management executives of the company had come to Z country. They guaranteed that “our products absolutely do not have any backdoors. If there is, please call the police to arrest us”. This move reflected how important Z country’s market was to Qualcomm. With this, they were able to win the trust of the vast majority of Z country’s consumers.
In addition, the licensing fee for the 5G baseband had been greatly reduced. The price of the CPUs was also lowered to the point that it was even cheaper than the price of those CPUs that were sold in Europe and Merica.
Qualcomm’s various initiatives had won them the t.i.tle of “A Conscienable Company in The Land of Z” among Z country’s netizens.
Even so.
Qualcomm was still suffering in the face of the strong compet.i.tion presented by Xing Hai Technologies and Teng Xun, Qualcomm is still suffering. The SX-1000 had s.n.a.t.c.hed away more than 30% of the high-end CPU market for itself while the SX-800 had s.n.a.t.c.hed away more than 40% of the low-end CPU market.
They had never expected that a SX-900 would burst onto the scene of the mid-range CPU market, with only half of the typical price.
Christian Amon had to call the marketing department. “Quickly, announce price cuts for our Snapdragon 7 series. The price will be reduced to less than $200. Yes, including the best, Snapdragon 765. All of their prices cannot exceed $200!”
After saying those words.
He covered his heart, which was dripping with blood.
…
22nd.
Zhongxin International.
At the latest 10 nanometer chip processing factory.
Chen Jin had brought along a few of the upper management for a site visit.
In the factory’s sealed off product testing room.
Chen Jin held a SX-900 chip in his hand and gently rubbed it through his gloves for some time. He asked Zhang Wei Jin who was standing next to him: “President Zhang, this CPU was made with Shanghai Microelectronics’ super-resolution photolithography machine? ”
“Yes.”
Zhang Weijing nodded, “This was made with the first super-resolution photolithography machine a.s.sembled by Shangwei. They are currently a.s.sembling the second and third units… the machines will arrive soon.”
Chen Jin asked, “How is the yield rate?”
The Chief Technical Inspector, Yang Ming, who was standing behind him leaned in and said “100%. There has been no junk units produced so far, hence it can be regarded as 100%….. This is the advantage of super-resolution photolithography.”
“What about its production capacity? Is there sufficient?”
“President Chen, it is definitely sufficient!”
Yang Ming arched his brows with a lively expression. He said excitedly, “Just this one CPU production line is enough to meet the needs of the entire world for the mid-range CPU.”
It was because super-resolution photolithography machine was used in this chip production line!
6 photolithography lenses were integrated in this first generation of the super resolution photolithography machine.
There were 10,000 miniature lenses inside each major lens.
This meant that there was a total of 60,000 “pens” painting at the same time.
The “canvas” was made up of blocks of 24-inch wafers.
Due to the utilisation of the most advanced intelligent control program, the photolithography efficiency was improved by 3 times. Moreover, each “pen” could even be finely controlled with different tasks a.s.signed to each “pen”.
Hence, such a photolithography machine was equivalent to five conventional immersion type photolithography machines.
It could process 1,000 pieces of 24-inch wafers and cut 1.5 million chips per day.
Such a production line could indeed meet the needs of almost all users of the mid-range CPU.
But was it too cheap to sell such a good CPU for only $195 each?
The Vice President, Liang Mengnan said, “Actually, the material cost of this CPU is only $10 yuan per piece. The OEM will charge another $10 as their processing fee. Including the additional 1 billion in R&D expenses, the per unit cost will be further reduced to $30 if more 100 million units can be sold. Even if we sell one unit at $180 instead of $195, we’ll still have profit margin of 500%.”
He shook his head, “When it comes to chips, as long as you’ve conquered the market, it is definitely an industry of windfall profits.”
Even something that cost pennies could be profitable when the amount sold was sufficiently ma.s.sive!
“Not bad.”
Chen Jin nodded, this was not bad at all.
Chen Jin thought of something and asked Zhang Wei Jin, “President Zhang, has the adjustments for your 28 nanometer production line been completed? The Xinghai first generation of the Xinghai computer will soon be launched. The performance of the 28 nanometer CPU is still falling way too short of the mark. We are waiting for you to ma.s.s produce the 10 nanometer ‘Qinglong First Gen’ CPU.”
“Adjustments have been completed!”
Zhang Wei Jin nodded, “We’re currently waiting for the photolithography machine from Shanghai Microelectronics. Their second unit of their super-resolution photolithography machine is estimated to arrive on the 25th. We will debug the machine first and try our best to produce the first batch of the 10 nanometer ‘Qinglong First Gen’ CPU chips by mid-March.”
“So that means that the ‘Xinghai First Gen’ computer can only be launched at the end of March?”
Chen Jin wrinkled his eyebrows. He had planned to officially release the ‘Xinghai First Gen’ computer on March 15th. Was it not too late if he had to wait until the end of March?
Zhang Wei Jin guaranteed, “President Chen, we’ll try our best to speed up the process so that the launch of the Xinghai computer will not be delayed.”
“All right!”
…
The inspection ended.
However, on the 10th of March.
Zhang Wei Jin suddenly called, “President Chen, we’ve underestimated the difficulty in manufacturing the 10 nanometer computer CPU. Moreover, the surface area of the ‘Qinglong First Gen’ is too big. It’s four times that of the Intel CPU, and twenty times that of the SX-900. There is also a high error rate caused by multiple heavy exposures. We have not successfully produced a 10 nanometer CPU so far. The rejected rate is 100%.”
He added, “We need at least three months to solve these problems.”
Chen Jinda was shocked, “What? The launch is scheduled in the next few days and you don’t even have the finished product? What have you been doing?”
Zhang Wei Jin explained multiple times and proposed a plan of compromise, which was to temporarily give up on the multiple heavy exposures. They would use the super-resolution photolithography machine, to produce a batch of 22 nanometer CPUs as a last minute replacement.
The manufacturing process of the 22 nanometer chip was one generation ahead of the 28 nanometer. It sounded much better too.
The manufacturing difficulty had also been significantly reduced. The yield rate was 100%.
“Ok ok, replace it with 22 nanometer first. In any case, we must make it in time for the launch event.”
Chen Jin shook his head. Although he was flushed with “cheat codes”, technical laws still remain. Intel used 6 or 7 years to conquer the 10 nanometer production techniques. Why did Zhongxin International think that they could achieve the 10 nanometer with only 10 odd days? It was impossible.
The 15th of March soon arrived.