184: Chapter 184 Earthquake Chain Reaction

"Our inventory is absolutely not a problem." Wang Shangzhong, the head of the Black Tech Dismantling Center, said with a confident look.

For others, this massive earthquake was an absolute crisis, but for Transsion, it was a moment of dual celebration for rising profits and sales.

If upstream manufacturers could harvest the whole world, why couldn't Transsion do the same?

"At present, we still have 180 million recycled chips of various types, and our screen factory is also about to go into production.

With these invisible supply chains, we are almost the same as Samsung; we won't be affected by the market, and we can even take the opportunity to make a big score."

A mischievous smile appeared on Wang Shangzhong's face...

This wasn't taking advantage of a crisis; it was industry standard practice.

A production capacity crisis meant price hikes; that was a truth as old as time.

"The latest contracts signed with Sony and Sharp last year were for delivery one quarter in advance.

Currently, we have about 30 million sets in inventory; this capacity is enough for our technology to be implemented," Liu Fang also reported.

At this moment, everyone finally put down the heavy stone in their hearts; they were truly well-stocked now...

Then they could go all out. Half an hour later, it was confirmed that the T86 series and T3 series for the Africa market would be mass-produced according to plan.

It would still be increased volume without price increases.

...

That evening, news arrived one after another.

Sony official statement: The Miyagi factory is severely damaged, and recovery is unknown. Due to force majeure, related orders cannot be compensated. Thank you for your understanding.

Following that were Toshiba, Renesas, Fujitsu... Japan's semiconductor industry was almost completely shut down.

Early the next morning, the chain reaction began to appear.

Samsung issued an announcement: "Due to the interruption of upstream material supply, the memory factory is reducing production capacity by 30%.

The sensor factory suffered even more severe losses and is currently undergoing a technical upgrade; it is expected to be shut down for 6 months."

Micron followed suit: Memory chip production capacity reduced by 30%.

Elpida: Production capacity reduced by 25%.

In less than a week, DRAM prices skyrocketed by 30%, and NAND flash memory prices skyrocketed by 25%.

LPDDR2 running memory and eMMC4.3 storage skyrocketed by 35%, leading to a predatory phenomenon in the mobile phone market.

The price of large-version RAM plus ROM had already exceeded the price of the chipset, which was unheard of in the industry.

As a large company, Apple still had some bargaining power, but for small companies, this was a devastating blow.

...

Beijing, Dami Company.

Lei Jun looked at the latest price list on the screen, his brows furrowed for half an hour, and they hadn't relaxed for a long time.

Lin Bin stood by, also feeling a bit anxious.

The price hike was too fast, too fierce.

It was faster than any of them could have imagined.

"1GB of LPDDR2 was 3.6 USD before the earthquake, and now it is 4.9 USD. It has risen by 35%."

Lei Jun didn't say a word; this was truly a sudden and devastating blow.

Lin Bin continued: "The BOM cost for our first-generation Xiaomi and the Mi 1s has increased by 500,000 USD just for memory alone.

Calculated at an increase of 3 USD per unit, 10 million units would mean 30 million USD."

After looking for a long time, Lei Jun finally sighed:

"What do the suppliers say?"

"They are all snatching it up. HTC, Lenovo, and ZTE are all sweeping up stock. Our volume is still the smallest, and we can't even get in line right now."

Lei Jun closed his eyes.

The Mi 1s was released last December. The original plan was to reach a shipment volume of 6 million units before April this year, but due to supply chain reasons, only 2 million units were actually shipped.

Now, because of the rising costs...

End of life? This goal had completely lost all hope.

As for the planned Redmi series, using a price of a few hundred yuan to disrupt the low-end market, with the current market situation... it's better to put it on hold!

Now, let alone disrupting the market, Xiaomi would just die faster.

Maybe we should build Redmi into a high-end brand; after all, Redmi is inherently red, which naturally fits high-end attributes.

Should Xiaomi continue to push the price-performance ratio to the end?

But soon he returned to reality; the cost was like a huge wall pressing down on him.

After all, the rise in supply chain costs was a problem he had to face.

If phone prices rise, users definitely won't accept it, but if they don't, it's selling at a loss. Currently, we can only sell off the chips in inventory; as for the rest, we'll take it one step at a time.

"Brother Lin, how much is left in the warehouse?"

Lin Bin smiled bitterly: "Currently, it's only enough for a little over a month."

Dami Company, in order to reduce costs as much as possible, signed all contracts for one month and had no long-term orders.

No matter what parts they were, the inventory was very scarce.

Originally, this was to reduce costs, but now that costs were skyrocketing, they had suffered a huge loss instead.

...

On the other side, South Korea, Samsung Electronics.

Several people in the conference room were looking at reports.

"Chairman, DRAM, LPDDR2, and other storage chips have all risen by 30%, and the prices of mid-to-high-end lenses have officially risen by 40%.

We are really making a killing."

"It is thanks to the Chairman's capable leadership. Announcing the technical upgrade at the first opportunity and cutting some capacity further increased market anxiety, directly driving up the prices.

This wave has really filled our pockets."

"What are you saying? This was clearly a technical adjustment forced upon us by the constraints of upstream suppliers. In the future, we must strengthen our independent research and development.

Without a full industrial chain, we will be constrained by others."

Seeing Li Yihai say this, others gave him a thumbs up.

As expected of someone who does R&D; they are truly cultured.

Lee Kun-hee nodded. He looked at the report in his hand but discovered a blind spot.

Everyone was placing additional orders, but the one who had made him suffer in Africa was nowhere to be seen.

"What about Transsion?"

"There is no movement yet. Their partner, Huawei, has also not placed any additional orders."

"This is very strange."

Lee Kun-hee also frowned. The two largest companies in China actually hadn't placed any additional orders.

He checked the two companies again. Their previous orders were indeed large, but the corresponding inventory had also been exhausted...

Especially those low-end lenses, storage, and screens... they should have placed additional orders by now.

But why?

"Their inventory shouldn't last much longer."

"In the Africa market, their monthly Smartphone shipment volume can reach 2 million units, requiring at least 3 million image sensors and 5 million storage units.

President Lee, rest assured, they won't last long."

"Wait. Wait for them to come and beg us," Lee Kun-hee said.

The person beside him laughed and echoed: "By then, the price won't just be a 30% issue."

Lee Kun-hee didn't laugh. Before the contracts were finalized, all of this was just their wishful thinking. He always felt that the company Transsion was a bit strange; the parts they ordered didn't match their sales volume at all.

They must have another alias.

But regardless, such a large order must be able to find a source.

By then, the advantage would be in Samsung's hands, and holding the advantage meant...

"Not just price, but other conditions as well."

Lee Kun-hee turned around: "The great Samsung lost in the Africa market; this is a very shameful thing."

"It is time for us to wash away the disgrace."

...

Guangzhou, Transsion Headquarters.

Huang Tianya pushed the door open and came in, his expression a bit strange.

"President Shen, if we really donate according to this, in this situation, isn't it a bit..."

Huang Tianya hesitated for a long time, then finally said: "Isn't it a bit inappropriate?"