Chapter 360 SIC’s Revenue

Author: quiet thoughts

Chapter 360 SIC’s Revenue

The application of STN screens will definitely no longer be limited to handheld devices, as the presence of TN screens is clearly ahead of the market.

Its application range is very broad, and it is a technology that can bring huge profits to SIC.

I really need to talk to Heitaro Nakajima about its promotion. As the president of SIC, that is one of his businesses.

Tomorrow, in addition to the LCD R&D department, Hongchuan Feng decided to go to see the chip R&D work.

SIC's first-generation chip has three different parameter specifications, namely the 8-bit processor 8089A, the 8-bit enhanced version 8089, and the 16-bit processor 8081.

Currently, the most widely used 8-bit chips on the market are the first two, and the reason is ultimately not because they are cheap.

As a pure 8-bit chip, 8089A is as good as Intel8080, Z80, MOS6502 and other famous chips of the same specifications.

As Hong Chuanfeng exposed the existence of SIC at a press conference in July, the outside world also paid more attention to Neon's local chip design company.

As the cheapest product with the widest range of applications, 8089A has also received a large number of local orders from Neon.

It was a process that gradually progressed from less to more. After receiving good reviews from initial users, more and more customers placed orders with SIC.

In less than half a year as of the end of the year, SIC has shipped a total of nearly 3 million 8089A pieces.

As for why there is such a large shipment volume, is it because there is a large demand for 8-bit processors in industrial production and consumer electronics.

From industrial process control, data processing, power systems, grid security, grid equipment monitoring, petrochemical systems and other fields.

Products that are commonly used in daily life include computers, printers, scanners, fax machines, electronic dictionaries, DVD players and other products.

Therefore, 8-bit processors will be used in all fields or products involved.

Because it is the most basic and mainstream chip processor in the current era, 4-bit machines lower than it are almost on the verge of being eliminated.

Therefore, 8-bit processors will be a necessity for industrial and electronic manufacturing industries for a long time to come.

That also means that SIC's 8089A chip can be sold for at least 10 years.

It's a sure-fire business, and now SIC can count on the design of 8089A for decades.

At most, some other versions of 8089A are designed every year according to customer needs to adapt to different applications.

But that is nothing more than calf surgery, and the general design structure will not change, so there won’t be much research and development costs.

Another reason why 8089A can receive a large number of orders is that some government departments are taking the lead in using SIC chips.

For example, the fields mentioned above such as power system, grid security, petrochemical industry, etc. are not the focus of the country.

Generally speaking, processors in those fields have very high reliability requirements and are unlikely to change their previous usage habits easily.

But after it was first used on a large scale in Akita at the beginning of the year, it slowly began to spread throughout Tohoku.

Ruming SIC's chips have occupied all markets in northern Honshu Island and Hokkaido.

Even the central agencies in Tokyo have begun to pay attention to such a domestic chip development organization.

With those demanding departments taking the lead in using it, ordinary companies have nothing to hesitate about, of course, whether to support domestic production.

Xiaoyuezi is the same as the people of Tianchao in this regard, they seek reliable quality and will support Yidong domestic products within their capabilities.

After using Laomi's chips for so many years, now that Neon has local products that can compete with it, why not use its own chips?

Since it took nearly a year to design the 8089A, the crazy shipments in that half year were the biggest reason why it could reach 3 million sales.

Due to the surge in shipments, the production cost of 8089A has now dropped to less than $3.

And its selling price is basically hovering around 18 US dollars, and the 15 US dollars difference in the middle price is not the profit.

Three million pieces is equivalent to a profit of US$45 million, which is equivalent to approximately 11.25 billion yuan per month for Donglai.

The profit earned in this half year was more than 10 times that of SIC's full year's revenue last year. The fact is that it is not that amazing.

And that's not just the 8089A chip, so how does its enhanced version, the 8089, perform?

In fact, its large-scale application is much earlier than 8089A, such as Namco's Jiaowang and Fujitsu's computers.

In particular, Fujitsu's FM-7 personal computer will definitely be the star product in next year's computer industry.

From May to the end of the year, approximately 800,000 units were sold, basically taking the title of next year’s personal computer sales champion.

Its explosive sales, SIC chips and the open MS-DOS system played a role that cannot be ignored.

Also because of the sudden rise of FM-7, several giants such as Yueli, Toshiba, and Soushi also paid attention to the existence of SIC.

Because of the IBM commercial espionage case in June, those companies are now taking a more cautious attitude as they have made mistakes in all computer-related technologies in the United States.

Especially if it doesn't become clear in the first month, I wish I could replace all the parts with Neon's local products.

Other computer components are easy to talk about, but if you look at processor chips, no company has that capability.

It happened that Hongchuan Kaede announced the existence of SIC in July, so SIC became Yueli's only choice.

There is a lot of talk about specific orders in Bu Nao, and those giants have a huge appetite.

They want to license the technology of SIC chips and then produce them themselves.

How could Hongchuan Feng agree to them under such conditions? It would be tantamount to digging one's own grave.

With their size and investment in the semiconductor industry, once they obtain SIC's technology authorization, they will probably not be able to sell a single chip of their own.

Don’t forget that the giants who are the kings of volume are also members of the VLSI (Very Large Scale Integrated Circuit) Research Institute.

Hongchuan Feng had already heard about it in his previous life whether they were systematically involved in destroying American DRAM chips.

Give them your best-in-class technology and leverage Fangfang's accumulation in the semiconductor field. There is no doubt that SIC has a lot of talent.

So even if those giants join forces to put pressure, Hongchuan Feng will never let go.

Don’t forget that Hongchuan Electric is not a company with a market value of more than one trillion yuan now. He has straightened his waist and is not afraid of the intimidation of any giant.

Then there is one of the invisible benefits brought by being in the market, the huge social influence, which everyone wants to weigh.

At present, Hongchuan Feng has already talked privately with Dong and Yue Li, and it is very likely that the wrong party will be the first to relent.

After all, they are under the greatest pressure. If SIC gives them some discounts, the two parties will almost reach an agreement.

As for the remaining few, the alliance no longer exists. It will be a matter of time before they return to the negotiating table.

Although there are currently very few orders from those giants, there are still orders from Fujitsu's personal computers, as well as from several prominent manufacturers such as Namco, Taito, and Sega.

The shipment volume of SIC8089 has also reached about 1.4 million pieces, and the shipment volume has exceeded 1 million. The manufacturing cost of the chip has dropped to more than 25 US dollars.

When the market was first opened, the price of 8089 was set at a low price, around US$40.

But to make up for the decrease in profits, later on, the processor chip 8089F used in Tongjiaowang and personal computers all integrated a modular design like a graphics auxiliary chip.

With the strong improvement in graphics performance, the price of 8089F has also increased to the range of 60 to 70 US dollars.

In that case, the profit of one piece of 8089F will be enlarged to about 35 US dollars.

No matter how they try to harvest customers' wallets, SIC's tricks are all high-tech.

I think if I add a chip, the performance will be more comprehensive and powerful.

But the price is still much cheaper than the 8088 which costs more than 100 US dollars. So I asked if I was interested.

Facts have proved that no matter whether it is Fujitsu or Namco, they are all very excited.

1.4 million pieces, with a profit of US$35 per piece. The total is US$49 million, which is equivalent to 12.25 billion yuan per month.

Although the shipment volume is far lower than the 3 million pieces of 8089A, the overall profit is higher than the former due to the higher profit margin.

Those two chips are currently the two most profitable products for SIC. As for the 16-bit chip 8081, the current shipment volume is not high.

Although its performance can be more powerful, because the price is too high, very few customers choose this chip.

Because of the outstanding performance of the 8089F, Fujitsu has decided to use the 8081 16-bit chip in next year's high-end personal computers.

In addition to Fujitsu, major research institutes in Tokyo are also among the main customers of 8081.

Because those research institutes require chips with powerful computing power, ordinary 8-bit chips simply cannot meet their needs.

Although it has been on the market for almost two years, a total of more than 300,000 pieces have been shipped as of today.

That shipment volume is really low. Now we can hope that Fujitsu's personal computer sales will increase next year.

I hope they will buy more mainframes and compatible computers from Yueli, otherwise I don’t know when the 8081 demand will explode.

The price of the 8081 is around US$280, and since less than one million pieces have been shipped, the current cost is as high as US$100 per piece.

But even with such a profit of nearly US$180, 300,000 chips also brought in US$54 million in revenue. It is difficult to make money on both chips.

The fact is that it is so outrageous. It sells the least but makes the most profit. 13.5 billion yuan per month is not a large amount of money.

That is not the reason why Hongchuan Feng has tried so hard to promote 8081, because it is really very profitable.

Profits are high, and SIC's current base is mainly in 8-bit chips.

Because their shipments are large enough, it means the market is stable and demand is strong.

In comparison, 16-bit chips are currently only used in high-end equipment. It is expected that it will take another two years to enter the market and be widely used.
To be continued...