Chapter 167 Self-developed Chip
“How do you evaluate the topological semimetal and Ark chip at Huawei’s press conference?”

Compared with video, text output will contain more substance and less emotional rendering.

This has to do with the platform's tone and also with the form of expression.

“Thanks for the invitation. I saw a question on Zhihu about China’s national destiny, and a lot of the answers were talking about how lucky China is and how good its national destiny is.

I actually don’t agree with most of the views there. I have always believed that China’s good fortune is not due to its good national destiny, but rather the result of the joint efforts of all its people. Take joining the WTO as an example. Joining the WTO is not China’s privilege. On the contrary, China has made a lot of compromises in order to join the WTO.

Joining the WTO is not a charity from the West, it is a transaction. The economic system led by America wants to keep having excess returns, so they set a price and made a deal with China. There are always some self-media on the Internet with ulterior motives who describe this as charity.

When I talk about joining the WTO, I am not trying to discuss whether it was a handout or a deal, but I am saying that it seemed like an opportunity for our country. If we had not been well prepared in terms of infrastructure, residents' quality, business environment and other aspects at that time, we would not have been able to usher in economic take-off even if we joined the WTO.

Joining the WTO is also the result of our efforts as China's huge economy has been developed for more than a decade and is now able to be put on the table for trading.

Such events are more the result of hard work than the destiny of the country.

The economic boom after joining the WTO cannot ignore the sacrifices made by a large number of people in this process.

Therefore, in my opinion, the only thing that can be regarded as a national destiny is the 911/ World Trade Center Twin Towers incident in the millennium. This incident caused America to make a major strategic misjudgment and won China a decade of peaceful development.

This is absolutely destiny on my side, and I think this technological breakthrough in topological semimetals is a blessing from national destiny that is no less than the Twin Towers of the World Trade Center.

Even in some ways, it's worse than that time.

Not to mention room-temperature superconductivity, which takes time because it is a completely new technology and it will take a long time for it to mature. It cannot be plugged and played in the existing economic system, and its successful research and development will be more symbolic.

There is only news on the application side at the moment, and no specific products have been seen. I estimate that the research and development progress is limited. After all, this thing is a bit too high-end.

It is difficult to see the effects of products that are too high-end in the short term.

Topological semimetals can be plugged and played directly in the existing semiconductor system, directly replacing silicon with topological semimetals, which means that a leap in computing power can be achieved at an extremely low cost.

Its biggest advantage is that it is no longer limited to a fixed area, and there is no need to find ways to make the chip's transistors smaller. The same effect can be achieved by stacking up the number of transistors, which is larger.

This means that a large number of technologies in the original system can be used directly without much modification, which is completely different from quantum computers that need to completely subvert the original system.

The benefit it brings to the future is that China's semiconductor industry chain will usher in a comprehensive upgrade around topological semimetals. There is a vast market not only in developed countries, but also in a large number of underdeveloped and developing countries.

What's more, America is not the only developed country. There are also a large number of countries that are not on good terms with America and will try every means to do business with us. Even our die-hard little brothers may turn against us.

Under this premise, China's semiconductor industry will have technology, market and capital, and will experience explosive growth. I hope America will not compromise and not allow China's topological semimetal exports.

Because of this, technological upgrades surrounding topological semimetals will be completed by Chinese companies, and we will take the lead in the next generation of semiconductor industry revolution.

Last year, the total output value of the global semiconductor industry was approximately US$5330 billion, of which the output values ​​in mainland China and Taiwan fluctuated around US$ billion.

Taiwan relies on TSMC to do more high-end business, while the mainland is more focused on mid- and low-end production capacity. Everyone knows that the profit of high-end production capacity is far greater than that of mid- and low-end production capacity.

With the development of AI, the global demand for chips will show explosive growth in the future. At present, only China can produce 1nm process chips worldwide.

Therefore, relying on topological semiconductors, China will slowly erode the high-end market share. From a quarter of the output value, I expect that in three years China's semiconductor output value share in the world will rise to 50%.

What we will consume mainly is the output value of Taiwan and Korea. America may also relocate Taiwan and Korea's semiconductor companies back to America in order to protect its own industries.

We used to have a huge semiconductor industry, but these industries were more like a kind of puffiness. Today it is still puffy, but topological semimetals will act like a magic pill to make it quickly strong.

I am looking forward to seeing what will happen to Taiwan after it loses its semiconductor industry and TSMC, the island's guardian mountain. I just hope the relevant parties will not do anything to benefit Taiwan! "

There are many similar highly praised answers on Zhihu, such as:
"It's all fake. The chip breakthrough, Ark 100, and topological semimetal are all fake. This is a strategic deception by Huawei in cooperation with relevant parties.

Ark 100 is just the Kirin chip with a new logo, so I hope you won’t snatch it from me when it goes on sale in the second half of this year.

I was just joking. I think the production capacity will be very limited, so the Extraordinary Master in the second half of the year will probably be harder to get than when the Mate 60 was released. Considering the 1nm chip, I estimate that scalpers will drive up the price.

Oh, I don’t want to think about it anymore. I feel annoyed when I think about it. If I don’t buy it as soon as possible, I will definitely not be able to sleep.

Okay, let's get back to the topic. I want to talk about how significant this matter is, how important it is to us, and why the capital market reacted so violently. The A-share market, which is jokingly called a scam market, was able to go against the U.S. stock market. It rose against the trend when the U.S. stock market plummeted. Even the son could not recognize his father.

Because I have been working in a securities firm and doing macroeconomic analysis, I can tell you very clearly that for a long time in the past, we have pursued four main strategic goals:
1. Withstand the economic pressures brought about by the current supply chain shift
2. Prevent the economic pressure that future confrontation will bring

3. Increase the dependence of major economies on China

4. Maintaining the development of artificial intelligence

Yes, it is a very pragmatic and basic goal. Made in China 2025 has not been mentioned much. A large number of policies are centered around our need to survive and to stay alive. We cannot be kicked out of the current global economic cycle.

Before the God of Light appeared, no one could have imagined that we could exceed our strategic goals in such a short time.

A series of technological breakthroughs led by the God of Light, including human hibernation, perovskite, and room-temperature superconductivity, have fully demonstrated China's independent innovation capabilities in the field of cutting-edge technology. These technologies are indispensable to the world to some extent, which is why France came to China urgently. Even if it offended America, it had to give the European Space Agency's cargo transportation order to Guangjia Aerospace.

The large-scale global shipments of perovskite batteries this year have brought about a significant increase in profits for the photovoltaic industry. It can be said that the first point has been initially achieved and the third goal has been exceeded.

With the chip industry revolution brought about by topological semimetals, we will take the lead in this industrial revolution. Combined with AI, this will be an opportunity no less than the Internet wave after the 90s. The good expectations for the future formed from the top to the grassroots can basically solve the second point.

Finally, the fourth point is that we had hoped not to be left too far behind. If Nvidia does not sell us the most advanced chips, we can use some less advanced chips. Huawei can also produce some Ascend chips to meet the demand and maintain a position of not falling behind.

Now with the support of 1nm process technology, China will soon catch up with the backwardness in AI. After all, China does not lack data and algorithms, but only computing power. Therefore, all the strategic goals pursued before have been achieved, and even exceeded.

Leading the world in chip manufacturing is something we never dared to think about before."

As for other manufacturers who watched the press conference, they had mixed feelings. They could forget about the high-end market this year as it was almost 100% monopolized by Huawei.

Huawei itself has strong marketing capabilities, and with such powerful technical support, it is impossible for its products not to sell well.

Fortunately, the price range of Extraordinary Masters is not what they are pursuing, so for the time being the impact is not that great.

The question everyone faces is whether to make their own chips.

Since China can produce 1nm chips by itself, should it do it itself? There are countless advantages to developing chips by itself. It does not need to pay Qualcomm tax and can maximize the advantages of software and hardware, which is a great marketing highlight.

Seeing the success of Kirin, leading manufacturers have launched projects one after another. Xiaomi has Surge, VIVO has its own imaging chip, and OPPO has Zheku.

OPPO is in the most pain now because they cancelled the company registration and disbanded the team before the Zheku tape-out in May last year, retaining only the core architecture team.

If Zheku had not been disbanded, we could have started working right away. Unfortunately, Zheku is gone now. It will take at least half a year to put together a new team and push the chip to the tape-out stage.

"Our question now is whether or not to develop our own chips?" OPPO's executives held an emergency online meeting after the press conference, with all executives attending.

Everyone is deeply shocked. Huawei has gone to 1nm, so will they still continue to play?

The insufficient production capacity this year will not affect their market, but what about next year? And the year after?
"I just consulted Mi Yujie, and he said they expect to complete the 2028nm chip tape-out in 1, which means they will not be able to advance the process to 2029nm until 1.

When we attended the International Electronic Components Conference last year, TSMC said it would take until 2030 to advance the process to 1nm.”

Mi Yujie is an executive in charge of R&D at TSMC. OPPO is very familiar with TSMC executives because Zheku once wanted to take its chips to TSMC for tape-out.

"This year, Huawei's 1nm chip is limited by production capacity and new technology, and will only appear in the highest-end extraordinary masters. What about next year? And the year after?

When both the Mate series and the P series are equipped with 1nm chips, how can we sell our high-end models?
What’s even more frightening is that their mid-range NOVA series all use self-developed chips and 3nm technology to achieve differentiation. What should we do?
By that time we will have lost most of the market.”

The new technology has brought the greatest shock to mobile phone manufacturers, which is almost a dimensionality reduction attack.

The executive who said this simply couldn't imagine that the nova series chips use 3nm process, and OPPO's highest-end find also uses this process.

"Before the meeting, Qualcomm came to us and said they would try every possible means to promote cooperation with China. Even if it meant giving all their high-end production capacity to SMIC, they would still cooperate with China," said another executive.

This is Qualcomm's argument to appease these partners.

Since everyone is developing their own chips, should Qualcomm still collect taxes?

Although taxes can still be collected from communications patents, the taxes collected are much less than those from the Snapdragon series.

“Haha, this requires Washington and Yanjing to discuss it, it’s not something Qualcomm can decide.

And even if Qualcomm can come in, their priority is very low. For us, we can wait this year, we can wait next year, but we absolutely cannot wait the year after.

Even if it just loses the high-end market, it will be fatal enough for OPPO."

"That's right, we must develop our own chips and get Zheku back."

“What if I get banned by America?
If we develop our own chips and don't use Qualcomm, will we be put on America's blacklist and lose overseas markets like Huawei?"

“No, we will not lose overseas markets, we will only lose the American market.

As long as there are no problems with the new technology's production capacity and yield rate, we no longer need Qualcomm or TSMC.

It doesn’t matter even if TSMC doesn’t manufacture for us and Qualcomm doesn’t sell chips to us.

What is more important is that what is lost is the American market, while what is gained is other global markets.

With the support of new technologies, Samsung has no chance of competing with us in overseas markets. If we have the support of 1nm, we can grab the market share of even Apple.”

“That’s right, our only option now is self-development, and it has to be fast.

Because other manufacturers will make such a decision, SMIC's production capacity is limited, and we need to grab the production capacity of topological semi-metal chips. The faster we do it, the better it will be. "

Almost all OPPO executives have figured out one thing: the only way out is self-developed technology.

Losing the American market is not a big deal, but losing the Chinese market would be a huge blow.

It would be even more fatal if Huawei could enter foreign markets.

Not to mention that Honor, as the son of Shenzhen state-owned assets, will definitely choose to develop its own products. Honor and Huawei are enough to swallow up the entire market.

There are still some problems with self-research. The team was disbanded last year and was re-established this year. It was a bit embarrassing in public opinion, so it will cost more money to get the people back.

But these are not the problems that can be solved.

"Let's do it this way, Mr. Liu. I need you to set up the bureau again."

(End of this chapter)