China cancels 129.1 billion chip orders? OEM factory howls, SMIC International becomes the biggest winner

Tech 2023-05-21 19:28:03 Source: Network

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Wen | Dawei

Edit | Have Wealth

Before reading this article, we sincerely invite you to click on itFollowIt not only facilitates your discussion and sharing, but also brings you a different sense of participation. Thank you for your support.

China wants to thrive in the field of chips, but after seeing China's rapid development, the United States began to unite with other countries to boycott China and want to comprehensively block its chip development.

The development of chips in China was temporarily affected, but time has changed and has changed the entire market. These OEM factories were originally on the side of the United States, trying to exert pressure on China, but now they are filled with howls of sorrow? What the hell is going on here?

There are reports that China has decided to cancel orders for 129 billion chips, and some say SMIC International has become the biggest winner.

In today's market, which chip has attracted people's attention and people would think of TSMC? It has a monopolistic effect for a long period of time, effectively controlling nearly 50% of the market share.

According to TSMC's report, it can be seen that operating revenue had already decreased by 18.7% in January, and rapidly entered a declining stage as we entered March.

Once upon a time, TSMC had obvious capabilities, but now with the gradual decline in Chinese demand, TSMC is no longer able to support it.

From the perspective of smartphones, Qualcomm, Samsung, and Apple have been continuously squeezing toothpaste. However, due to the lack of performance improvement and innovation, many consumers do not plan to replace their phones. They originally hoped to achieve a monopoly effect after Huawei's absence, but unexpectedly encountered backlash.

Many netizens have expressed that the chip war in China may continue for another three years, and everyone has already made corresponding preparations and will not replace their phones within these three years.

Nowadays, TSMC can only face reality. They thought they could have an impact on China, but they didn't expect it to have such a significant impact.

Nowadays, TSMC has caused a large amount of accumulation and cannot sell it. It can only continuously increase its revenue and expenditure, such as reducing the 10% increase in salary to 4%, and even deciding to cancel a portion of its employees.

In fact, based on the current difficulties of TSMC, if it weren't for the concern that a large number of talents would be lost when the salary increase system is abolished, it is likely that they would directly want to cancel the salary increase.

In addition to TSMC, other chip giants are gradually reducing their expenses, indicating that these companies have already faced serious difficulties in their daily operations.

The decline in chip prices has already had an impact on Samsung's earnings. For over a decade, Samsung's earnings have been very good, but in recent times, profits have already created the largest decline in 10 years, which is truly regrettable.

Let's take a look at Silicon Valley again. The company is the technology center of the world, but even so, it will face a chip surplus and enter a stage of rapid layoffs. In addition to Silicon Valley companies, Google, Apple, and Intel have also joined the ranks of layoffs.

Shortly before the communication, it was announced that it had decided to lay off around 5% of the workforce, and Apple announced that layoffs would become the final plan.

In less than a year, Silicon Valley companies have laid off nearly 200000 employees, and at the same time, this wave of layoffs has not stopped and is still gradually continuing.

The current situation of overseas giants has already been presented to people, either reducing salaries, layoffs, or delaying plans. In short, no matter what kind of model it is, it cannot change the current predicament.

Some people say that in this chip sanctions war, SMIC International has become a big winner. This is a leading chip enterprise in China, established in April 2000.

The current production capacity of SMIC International is all mature processes, and although 7nm technology has already been completed, it has not completed risk testing.

In 2022, the operating revenue of this factory area was only 50 billion yuan, which is not particularly high. However, in order to achieve effective changes beyond the fate of being stuck in the throat, it began to enter the stage of reverse investment.

In Beijing, Shenzhen, Shanghai, Tianjin and other places, efforts have been made to expand production capacity, with 70% of these capacities supplied to domestic enterprises.

As of now, SMIC International has entered the mass production stage and is expected to effectively achieve a monthly production capacity of 680 million chips by 2024.

In addition, China has always needed a large number of chips, and if we can independently develop them, we will not need to rely on new overseas products from now on.

China has entered a stage of rapid development in terms of manufacturing technology, equipment, and materials. It can be said that mass production will soon be achieved in the near future, changing the current situation.

Once domestic chips can achieve a 95% autonomy rate, these overseas chips will be directly eliminated and will never have the opportunity to enter the Chinese market, which will inevitably lead to a large "howl".

China has decided to cancel cooperation with overseas chips, which is equivalent to a favorable environment. With the gradual development of chips, the cancellation of a large number of orders will become the norm, and in such an environment, China's SMIC International truly becomes a big winner.

What do you want to say about this? Welcome to leave your thoughts in the comments section!

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