Chapter 168 Direction
"It's really a storm coming."

The weather in Yanjing was very good and sunny, and Xiaomi Auto's successful start far exceeded expectations, with both sales and reputation being better than they had expected.

The main reason for choosing a coupe instead of an SUV, the most popular car model in China, is path dependence. When Xiaomi mobile phones were first established, they targeted Apple's lower-end market, and Xiaomi Auto targeted Tesla's lower-end market.

Unlike the price of Xiaomi mobile phones fifteen years ago, which was cut in half and then cut again compared to Apple, the price of Xiaomi cars is not much lower than that of Tesla. The main focus is to provide a better experience at the same price.

As to whether this could be achieved, the executives were not sure before the product was officially launched on the market, and neither was Lei Jun himself.

Now Xiaomi Auto's performance has exceeded expectations, and its share price in Hong Kong has soared. However, neither the good weather nor the recent excellent performance of Xiaomi Auto can calm Lei Jun down.

Because at Huawei's press conference yesterday, Ark was like a bolt from the blue, causing Lei Jun to feel exhausted.

As a participant and witness of the development of China's smartphone industry, Lei Jun read a clear signal from yesterday's press conference: war is about to break out again in the mobile phone circle.

The domestic 1nm chip is the clarion call. In the future, the mobile phone market will be divided into two camps, domestic chips and American chips.

Under this general environment, it is impossible for American chips to gain consumer recognition in the domestic market.

In recent years, Chinese consumers' enthusiasm for supporting domestic products has far exceeded imagination. As long as domestic chips can achieve 80% of the user experience of foreign chips, most consumers will prefer domestic chips.

Not to mention that the performance of domestic chips is so far ahead that there is no comparison.

Xiaomi's Ultra series of mobile phones has no chance of competing with Huawei's Mate and P series. Previously, it could rely on differentiated competition and the experience advantages brought by Qualcomm chips to gain market share. What about the future?

Lei Jun's judgment is similar to OPPO's. Next year, the 1nm Ark chip will definitely be deployed in the Mate and P series. By then, Xiaomi's high-end mobile phone strategy will completely fail.

Not to mention Xiaomi, even Apple cannot hold on to its current market, otherwise how could Apple’s stock price plummet by more than 10%.

As for joining the domestic camp and abandoning Qualcomm, this decision is even more difficult. The ties between Xiaomi and Qualcomm are much deeper than those between other manufacturers. It can be said that Xiaomi's rise was fueled by Qualcomm.

Not to mention that there is a share swap agreement between them. When Xiaomi gave up the Surge chip, it was because the chip was indeed difficult to make and also because of Qualcomm's lobbying.

Xiaomi is the domestic manufacturer that has the most difficult time making this decision.

This can also be seen from the progress of self-developed chips of various manufacturers. OPPO once had Zheku, VIVO had its own ISP chip, not to mention Huawei.

Only Xiaomi's Surge S1 fell into a long period of stagnation after its failure. In the past two years, they have begun to work with MediaTek again to develop mobile phone SOCs.

However, the chips they are currently developing belong to the mid-range market, which means they will not affect Qualcomm's core interests.

"Mr. Bin, do you think it was a wrong decision for us to give up the Pengpai S1 back then?" Lei Jun was very melancholy.

Lin Bin is one of the earliest founders of Xiaomi. He resigned from his senior executive position at Google Greater China to start a business with Lei Jun and has made great contributions to Xiaomi.

When Xiaomi gave Lei Jun 99 billion yuan in stock incentives, it was Lin Bin who came out to respond to outside doubts, basically saying that this was a decision made by several directors without Lei Jun's knowledge.

Believe it or not, that's what he said.

Lin Bin said: "No, developing SOC in-house is a thankless task. We gave up on Surge S1 because it was difficult to make a profit, let alone recover the investment.

No one would have thought that China would be the first to break through 1nm in chip manufacturing process today.

The decision we made back then was understandable.”

Lin Bin didn't finish his words. The Pengpai S1 was a solution from Unigroup, a subsidiary of Datang Telecom, which Xiaomi purchased as a package before its listing in order to give the market confidence. It was reasonable to abandon it as it was not its own product.

“The chip we are developing jointly with MediaTek will probably be outdated by the time it is completed.

We now need to make an urgent U-turn and redesign chips based on topological semimetal materials," said Lei Jun.

Lin Bin thought for a while and said: "In fact, we don't have to develop our own products. We can choose to cooperate with some domestic manufacturers and use their SOC."

Lin Bin went on to say: “Our current battle line is too long. If we invest more resources in chips, the overall financial statements will not look good.

Moreover, for topological semimetal, a new material, its yield rate, wafer production cost, and chip design logic are all unknowns, so it will take a very long time for us to invest.

Huawei is already far ahead in this regard, and it would not be wise for us to catch up. I think we should focus our resources on areas where we currently have advantages, such as Xiaomi Auto.

More importantly, we recently signed a procurement project memorandum with Qualcomm, and we will purchase $20 billion worth of chips from Qualcomm in three years.

If we use topological semimetals to develop our own chips, and use them for the high-end market, then we will never be able to use up the $20 billion worth of chips.”

Lin Bin obviously doesn't want to do self-research anymore. In his opinion, it would be great if self-research succeeded, but the chance of success is too small.

If the financial statements fail and look ugly, how will we explain this to the capital market?
So there are also advantages to not going public, as it allows you to continue doing the right thing for a long time.

"Mr. Lei, I think we might as well ask Yuan Guang for his opinion. As a core R&D personnel of the technology, he should be the most authoritative person on the future development of the technology." Lin Bin finally said.

This statement feels like why not ask Aladdin about his magic lamp.

Lei Jun nodded after listening to this. "I've wanted to call and ask for a long time, but I haven't thought about what to ask yet. I'll call when I think about it.

But his answer may not be what you want. "

After listening to this, Lin Bin said with emotion: "Based on past experience, betting on both sides is the best.

It is impossible for the country to allow Huawei to dominate the mobile phone SOC market. Not to mention that the country will not agree, none of the domestic smartphone manufacturers will use Huawei's chips.

Therefore, there will definitely be several chip design companies similar to HiSilicon Kirin in China, such as Unisoc, which already had a certain market share. We can wait until their solutions mature and directly purchase their chips.

Don't offend Qualcomm either.

But the world is changing too fast now, and I’m not sure whether I should invest more in chip research and development, so I think it’s better to listen to Yuanguang’s opinions. It’s always right to listen to God’s opinions.

If he suggested that we develop our own products, it would be a reassurance.” Lin Bin finally joked.

At about 7:30 in the evening after dinner, Chen Yuanguang received a call from Lei Jun. He smiled when he saw the caller ID. He was a little later than he expected.

"Brother, what's the matter?"

Lei Jun's distressed voice came from the other end of the phone: "Junior brother, you have given us a difficult problem this time.

This question is too difficult, we have a bit of trouble solving it, so I came here to ask you for help. "

Chen Yuanguang didn't beat around the bush: "Topological semimetal?"

Lei Jun: “That’s right, I was terrified watching the Huawei press conference. I felt like we were going to be killed by Huawei very soon.

Huawei itself is stronger than us in some aspects. Their previous weakness was in chips. Due to the restrictions imposed by America, their chips were only on par with Qualcomm's two years ago.

After the chip breakthrough, our competition with Huawei will become very difficult. What does a 1nm mobile phone SOC mean? Leading us by five to ten years is too exaggerated.

I couldn't sleep the whole night yesterday because I was so stressed out.

I wonder how quickly it will replace silicon and how will it perform in terms of cost?”

This goes straight to the core of the problem. If the cost of topological semimetals is lower than that of silicon, then silicon-based chips will completely lose their market even in the mid- and low-end markets.

After listening to this, Chen Yuanguang's thoughts went back to three months ago. At that time, they were just happy about finding the right design logic for the light source system, but there were still many problems to overcome in the face of mass production.

He remembered very clearly that day, right after he finished a meeting with the space station design team of Guangjia Aerospace, Liang Mengsong came to him and said he had a new idea:

"Yuan Guang, why do we have to apply the silicon-based chip technology to topological semimetals?"

After listening to this, Chen Yuanguang asked in confusion: "What do you mean?"

Liang Mengsong said excitedly: "As the FET process gradually approaches its limit, the industry has conducted a lot of exploration to try to find ways to break through the process limit.

These include new materials. Using topological semimetals to replace silicon as chip raw materials is just one of many methods. Another material that is believed to have the potential to become the basic raw material for the next generation of chips is 2D materials.

Like topological semimetals, it cannot be directly developed using silicon-based chip technology. However, unlike topological semimetals which remain entirely in the laboratory, the industry has done a lot of exploration on the physical properties of two-dimensional materials.

It has moved beyond the laboratory stage and started wafer-level exploration.

Among them, CVD, one of the most mainstream methods for two-dimensional materials, is very suitable for our use in the secondary processing of topological semimetals.

It was originally developed to address the sensitivity, yield and stability of two-dimensional materials.

By controlling the orientation, a suitable substrate that matches the lattice is selected, and a thin film with high crystallinity, complete lattice structure and controllable lattice orientation is grown.

To adapt to topological semimetals, we can use metal-compounds as precursors, achieve a uniform supply on this substrate, and adjust the final suitable substrate through the combination between film and substrate."

After listening to this, Chen Yuanguang realized that this was a solution. An important reason why everyone had made slow progress before was that they had no direction.

The synthetic routes in the future space and time are not applicable to the present, such as using a solid-state atomic spin operation platform to build a topological semimetal chip and realize quantum sensing of the chip.

Where to find a solid-state atomic self-selected operating platform in the first half of the 21st century.

Even though this is outdated technology four hundred years later, chip production has developed into an absolute black box for most humans, almost entirely relying on the self-operation of AI.

This backward technology was out of reach even in the early 21st century.

After Liang Mengsong keenly realized the application points in current cutting-edge technologies, their progress in topological semimetals can be described as rapid progress.

With a direction, specific technical difficulties can easily find theoretical basis in the future time and space.

After they modified the existing process to produce the first topological semimetal chip, he and Liang Mengsong knew that the world would change.

(End of this chapter)