170: Kirin 701

"The global smartphone market is becoming increasingly competitive this year, and our Huawei must continue to exert effort in the mid-to-high-end segments."

"Therefore, I propose that based on our high-end chip, we design and develop an additional mid-range Processor aimed at the mid-range market."

"This Processor must support 4G networks."

"This year is the first year of 4G in China. Since Huawei's communication technology is at the forefront of the world, we must introduce a mid-range phone that supports 4G if we want to gain ground in the mid-range market!"

At the Board of Directors meeting for high-level executives the next day, Yu Chengbei spoke eloquently to the crowd.

With President Ren's support, Yu Chengbei was fearless now.

"Mid-range chip? Supporting 4G?"

"The sales volume of the 910T is still unknown, and now we are developing another mid-range Processor. What if it loses money like the previous few generations of models?"

"Redesigning a model requires a huge investment of resources. Can the Semiconductor Department withstand potential further losses?"

"The Brand has achieved almost nothing noteworthy this year; we might as well cut it."

President Ren listened to the others discussing heatedly but did not speak up. This was meant to be a discussion, and he needed to hear everyone else's opinions first.

But Yu Chengbei couldn't hold back anymore. "President Hua, please get your priorities straight."

"Firstly, the losses of the Semiconductor Department were not caused by our Mobile Terminal Department; this is a company strategy."

"I admit that the previous two generations of models had issues with insufficient product strength, but this is complementary to our Semiconductor Department!"

When Yu Chengbei heard President Hua mention losses, Big Mouth couldn't help but speak up. The company's strategy was for the mobile department to support its own Semiconductor Department. Yu Chengbei certainly wouldn't tolerate having the business losses pinned on him.

"Market competition is gradually becoming white-hot now. Our mid-range phones must also introduce models with sufficient competitiveness, or they will truly be eliminated by the market."

Everyone thought about it and agreed. The strategic plan to use the Mobile Department to support the Semiconductor Department had been approved at the previous company strategy meeting.

It wasn't appropriate now to single out the Mobile Department's losses.

Moreover, since Yu Chengbei was attending this meeting, it showed that he must have received President Ren's approval. The discussion shifted from whether to develop the chip to how to develop it and how many resources should be invested.

"Developing a new mid-range Processor requires significant resources. Can we modify the 910, or perhaps shield a few cores of the defective products and use them as mid-range chips?"

"That's right, modifying the 910 directly would save a large amount of resources."

"Semiconductor Department, do you think this plan is feasible?"

Sun Wei of the Semiconductor Department saw everyone looking at him and could only bite the bullet and say, "It's feasible, but..."

"But what?"

Yu Chengbei felt a little awkward on the side. Using the defective 910T units as mid-range chips was a good idea.

However, mid-range phones ship at least several million units, potentially tens of millions if sales are strong. Where could they find so many defective 910T units?

Calculating based on a 20% defect rate, this means the P7 Series would need to ship at least 20 to 30 million units to generate enough defective chips for the Brand to use.

The problem is that Huawei's previous generations of high-end phones combined didn't achieve that level of sales!

Sun Wei glanced at Yu Chengbei, gritted his teeth, and said: "I still hope the company will invest resources for us to redesign a mid-range chip!"

"We already have preliminary drafts; we just temporarily halted this mid-range plan to prioritize the 910 Series."

"If we reinvest resources, development can begin at any time!"

"Is everyone finished speaking?" President Ren's authoritative voice reached everyone's ears.

The conference room immediately fell silent.

"Since everyone is finished, I will say a few simple words."

President Ren scanned the people in the conference room. "Self-developed chips are our group's strategy, and this point is non-negotiable."

"The Mobile Department has already sacrificed a lot for the Semiconductor Department. You don't need to be too critical of Xiao Yu."

"Huawei has now arrived at an era full of challenges."

"Can we refuse to do certain things just because we fear losses?"

"Where did your initial drive go?"

"One person worries about investing too many resources and not recovering costs, another worries about losses if sales don't meet expectations."

"If you think like this, then just stop making phones and focus on building our 4G base stations!"

No one in the entire conference room dared to breathe loudly. It seemed President Ren was genuinely angry this time.

"In the past, our Switches were monopolized by foreign manufacturers. It was us Huawei people who fought our way out of the blockade imposed by foreign manufacturers, forging a path that belongs to Huawei."

"The same is true for chips now. Even Lei Jun has the ambition to make chips. What are you afraid of?"

"I'm telling you, in the future, Huawei will not only make chips but also engage in Wafer Manufacturing and Chip Production!"

"Are you scared off by these minor losses?"

"Back then, Chen Yunlong went all-in to make chips. Some of you even laughed at him for being ignorant of the immensity of heaven and earth. Look at him now?"

"Red Star's lingxiao chip is no worse than our Kirin Processor!"

At this point, President Ren's tone softened slightly. "So, don't be afraid, and don't worry about losses. Huawei is walking a path that no one has walked before."

"The current era is one of Changes Unseen in a Century. We must face all challenges without fear to ensure Huawei's survival."

"Everyone remember what I said today: A new era has arrived. May we all encourage each other!"

"Huawei!"

"Huawei!"

Seeing the momentum of these people, President Ren smiled. As long as the Huawei people maintained a mentality of not fearing hardships and pressing forward bravely, Huawei would definitely secure a place in this era.

"No need to shout slogans. If outsiders see this, they might think Huawei is a pyramid scheme."

"Hahaha."

The atmosphere in the entire conference room eased from the previous seriousness. Everyone stopped debating whether to make a mid-range Processor and instead discussed how to invest more resources into the Semiconductor Department and the Mobile Department.

Maybe one day in the future, phones, this "side business," will become Huawei's main business?

At this moment, Sun Wei stood up. "President Ren, our Semiconductor Department has been dragging down the Mobile Department for the past two years. I take responsibility for this."

"But please rest assured, President Ren and President Yu, we will definitely produce a more powerful Processor next, and we will absolutely not hold you back again."

President Ren waved his hand at him, indicating that he didn't need to say more. Huawei had been cultivating the communication industry for many years, and the mobile chip industry had only been entered for a few years, to be precise. To achieve such results, the Engineers had already worked very hard.

"President Ren, we will go back and restart the development of the mid-range Processor immediately. We will certainly provide President Yu with a satisfactory Processor."

In July in China, the Huawei Semiconductor Department restarted the development of the mid-range Processor series, with the internal codename 701.