Original: Gu Ziming authorized to reprint this article to wechat official account: political affairs hall plus2019
On the 22nd, Ren Zhengfei released an article entitled “the business policy of the whole company should shift from the pursuit of scale to the pursuit of profit and cash flow” within Huawei.
The article believes that the global economy will face a recession and a decline in consumption capacity. Huawei should shift from pursuing scale to pursuing profit and cash flow to ensure that it can survive the crisis in the next three years. Take survival as the most important program, shrink and close all the edge businesses, and pass the cold air to everyone.
This makes me think that on the same day, there were two unrelated “punch in” news.
U.S. Indiana governor Hou Kangan led an economic, trade and academic delegation to Taipei to discuss the “democratic chip supply chain” with Tsai ing Wen. Japanese Liberal Democratic Party legislator and leader of the “Japan China parliamentarians’ Forum” Guiji Kouya led a delegation to visit Japan and threatened in Chinese that “Taiwan has something to do, Japan has something to do.”.
As the United States and Japan continue to give carrots and guarantees to Taiwan, the preparatory meeting of the US Japan ROK Taiwan chip alliance at the end of this month can almost be confirmed to be able to go. In other words, an almost monopolistic global chip OPEC will soon be established.
This kind of monopolistic alliance can not only gain benefits, but also deeply affect the geography.
In the fourth Middle East crisis in 1973, the Arab coalition forces were completely defeated by the Israeli army. In order to reverse the decline in the war, OPEC announced an oil embargo, causing the oil price to soar by 350%, triggering the first oil crisis and forcing all western countries to collectively paralyze. Finally, Israel had to intervene and make it spit out the Arab territories it had eaten.
Once the chip OPEC operates, a large number of high-end manufacturing enterprises and capital will join the ranks of “lobbying” the government, forcing the Chinese government to adjust its foreign policy and strategy.
Moreover, even if there is no embargo, the semiconductor industry in Chinese Mainland can be severely damaged through monopoly and dumping.
In the past few years, the global semiconductor industry has benefited from the high inventory demand brought by the trade war in the trump era and the consumption stimulus brought by the large-scale release of money. Everyone is constantly expanding production capacity and enjoying dividends.
As the Federal Reserve begins to increase interest rates and scale down and a large number of expanded production capacity begins to be put into production, chips at the peak of the wave will also appear, like the memory of the year, and will usher in a trough in the next few years. A large number of low-end chips will be as cheap as cabbage, resulting in chip manufacturers losing money.
The chip4 of the United States, Japan, South Korea and Taiwan, which has formed the chip OPEC, can maintain the profit of high-end chips by reducing production during the epidemic period, or can attack the price of low-end chips by increasing production in response to shale oil.
Even in those years, Microsoft’s bundling sales will be promoted. If you want to buy high-end chips, you must bundle a complete set of low-end chips. This will severely hit chip manufacturers other than chip4.
This also means that the current chip price crack is only the beginning. With the gradual formation of the chip4 coordination mechanism, they will take the initiative to attack the profits of low-end chips to ensure that the semiconductor industry in non chip4 countries can obtain development funds.
In the near future, low-end chips will surely usher in an avalanche.
After all, Japan and South Korea have seen this path many times in the previous large semiconductor cycles. South Korea has relied on its strong willpower to face the falling cost price, and still “add positions at the bottom” time after time. It has taken the downstream of the semiconductor industry from Japan and established a huge Samsung Empire and SK Hynix.
At the same time, China’s rapidly developing semiconductor industry will also face a huge crisis. Like Ren Zhengfei’s Huawei, it will also face the “three-year crisis” and make survival the main responsibility. In the future, a large number of low-end chip giants will become dismembered residues like Evergrande, the king of low-end real estate.
However, as long as we survive this long winter, China’s semiconductor industry will also be reborn in Nirvana and complete the counter cyclical rise. Just like the five small bronze giants, they will become stronger after standing up. They will wash the low-end bronze on their bodies into the holy clothes of God with blood, so that the sea kings of chip4 can witness the dusk of the gods.
Therefore, those who are used to making fast money can no longer be in charge of China’s semiconductor direction. They must be taken. In order to survive this cold winter, the large funds that will continue to be put in more efforts need to be run by a new wave of people with the goal of “living”.
To survive, we need not only slogans, but also the vast central and western regions, but also the huge international market. From Uzbekistan in Central Asia to Cambodia, Indonesia and Thailand in Southeast Asia, these are the diplomatic battlefields that we will win in the future.