The Millennium Semiconductor Survival Guide.

Chapter 89 Industrial Upgrade
Different from the era of mobile Internet in later generations, the public has no concept of consumer electronics and does not have a clear definition.

Cao Yongluo is the same, he asked: "What is consumer electronics?

Is it mobile phones, game consoles, etc.? "

Zhou Xin nodded: "These are roughly the same. Simply put, everything related to the chip industry chain belongs to consumer electronics.

I intend to use my personal reputation to endorse this brand and create a consumer electronics brand that is influential enough to enjoy a high premium. "

Cao Yongluo, who has been well-informed since he was a child, naturally knows that this is difficult. How many Huaguo companies want to be a brand, and it is very difficult to establish brand recognition in China, let alone establish popularity on a global scale.

"It's very challenging, too difficult, really too difficult, it's not that the higher-ups have never thought about strengthening our domestic brands, and there are many practical difficulties in the process.

When it was called the Ministry of Machinery and Electronics Industry before, we did research and wanted to build a consumer electronics brand.

The first is the technical gap. The gap between our technology and foreign countries is too large, so it is difficult to produce high-quality products, or the yield rate is insufficient, and the cost cannot be controlled.

Secondly, it is difficult for Huaguo's consumer electronics companies to gain popularity and reputation in the international market, let alone you want to be a consumer electronics brand with a high premium. "Cao Yongluo is very sincere.

Zhou Xin smiled. He knew very well that the power of one person is small. The entire semiconductor industry chain ultimately needs products to support subsequent R&D and technology iterations.

"I also know that it is very difficult, overseas consumers' recognition of domestic consumer electronics brands is very low.

But the consumer electronics brand I founded, overseas consumers will not think it is a Huaguo enterprise.

I am highly bound to the image of Silicon Valley. When consumers talk about this brand, they will think of me, NewPay, Quora, and Riot, all of which are companies in Silicon Valley.

Users will not associate them with Huaguo.

Just like when users use Yahoo, will they associate Yang Zhiyuan with Wanwan?
And to create a consumer electronics brand with a high premium, I will not put all the industrial chains in Huaguo. If Huaguo-owned enterprises can do it, then I will give Huaguo enterprises the opportunity to do this part.

The yield rate cannot meet the requirements, and they will continue to do so even if they lose money.

What I need is to have such a brand that will reverse Huaguo's iterative upgrade of electronic technology.

Even if Huaguo joins the WTO, these foreign consumer electronics brands will be mainly based on manufacturing bases in Huaguo, and they will be relatively low-tech manufacturing bases.

At the same time, product R&D will definitely be put in Huaguo gradually, but these R&D results belong to foreign consumer electronics giants, and they will not let Huaguo enterprises be responsible for R&D, they will be responsible for OEM production.

The only people who will do this are Chinese people. "

To put it simply, for example, Samsung is the most downstream of the consumer electronics industry chain, consisting of a series of components from chips, screens, radio frequencies, antennas, batteries, memory, etc.

For the components with high profits, Samsung will choose to make them by itself, for the medium-profit components, it will find Korean companies, and for the low-profit components, it will be the turn of Huaguo companies.

Profit also means technical content.

Later, Huaguo wanted to upgrade its industry. What about industrial upgrading?It is to go to the link with high profit.

This is something that industrialized countries need to develop to a certain stage before they can think about it. Such a good thing is that foreign consumer electronics giants have no chance at all with Huaguo enterprises.

Huaguo enterprises neither have this technology nor this opportunity.

Only high-premium brands can support the continuous iteration of technology in the entire supply chain.

If you often read research reports, any research report on the mobile phone supply chain will have a deep impression on the part about key companies.

Until 2019, Huaguo brand awareness has been fully recognized internationally, but in the mobile phone industry chain, a large number of Huaguo companies are concentrated in the fields of casings, mechanical components, PCBs, displays, chip packaging and mobile phone assembly.

These are all segments with very low profit margins.

That's true 20 years later, let alone in 1999.

Cao Yongluo was very calm, and was not excited by Zhou Xin's words. The more he got in touch with him, the more he knew how difficult this road was: "Zhou Xin, you may have a net worth of billions of dollars now, but you want to build a world-class The consumer electronics brand is not enough.

Not to mention that you still want to support the domestic industrial chain in this way.

We also know that only with a high premium can there be enough profit margins to promote technological progress, and then continue to enjoy the high premium.

But the reality factor is here, it just can't be done.

There are too many Huaguo companies. If any technology is broken by Huaguo, the price of related products will drop significantly. They don't even think about selling high prices, and they only want to seize the foreign trade market at low prices.

We currently do not respect patents enough, that is to say, after technological breakthroughs, other companies rush to them, and the companies that achieve technological breakthroughs first cannot fully enjoy the technological dividends, let alone high premiums that feed back R&D.

You should know that Huaguo has been negotiating to join the WTO. After joining the WTO negotiations, we need to pay patent fees to foreign companies.

Take the DVD industry as an example. Huaguo is a big DVD producer. We export a large number of DVDs to the world. Now we don’t need to pay patent fees to foreign companies, but after joining the WTO, we have to pay a patent fee of US$9 for each DVD.

However, if the technology is a local company in Huaguo, then this technology does not need to pay patent fees, and it is almost impossible for domestic companies to collect patent fees.

Of course, on the bright side, we will pay attention to patent protection work sooner or later, but we are currently facing realistic factors.

It is extremely difficult for Yanjing's research and development organization to recover patent fees from export companies in Guangdong Province.

This is really very difficult. Getting Huaguo enterprises to focus on research and development is even more difficult now than building a consumer electronics brand.

In fact, after what you just said, I think your idea is indeed feasible. Starting from some small fields, there is a chance to make this happen.

But if you want to use this to cultivate Huaguo's enterprises and shift their focus to technology, it will be difficult. "

What Cao Yongluo is talking about is reality. In fact, many things are systemic problems at the moment, not individual problems in a certain field.

In fact, Zhou Xin knew some of the questions Cao Yongluo mentioned, and some didn't.

But for him, it is impossible not to do it because of difficulties.

If you don't do it because of difficulties, wouldn't it be nice to just lay flat in Silicon Valley and become an Internet tycoon?
"I don't care which company can provide me with the product I want in the end, I just ask for it.

If Huaguo companies can meet our needs, then I will give Huaguo companies a chance, or Huaguo companies think that they can meet our needs as long as we give them time.

Then when he meets the demand, I will let them join the industrial chain. "

(End of this chapter)