293: Chapter 293 The Three Sangdi Lobbying

"Big brother upstairs, someone below has sent you a Heavenly Dao cultivation manual. Go learn it quickly, we're waiting for you to join Transsion!"

"What Heavenly Dao cultivation manual? I thought it was English vocabulary? I don't understand it, I don't understand it at all!"

Tech bloggers weren't about to be left out, and Xiaobai Unboxing took the opportunity to post a Weibo update.

"Uncle Bai specifically asked a friend to check the information on Transsion Semiconductor. [Remember this site's domain: for good Taiwan books, choose Taiwan Novel Network, twkan.com, super worry-free] This company was only founded two years ago! And they have completed full self-development of 28nm and 14nm processes. As for the Lithography Machine... that's not important.

After all, since the items are already here, there's no need to quibble over these minor details. Anyway, the semiconductor supply chain in China is now connected. Sanctions? They don't exist!"

"By the way, Transsion's three production lines have a monthly capacity of 60,000 wafers.

The 28nm line can cut out about 18.9 million per month [estimated, yield loss has already been deducted]. The 14nm monthly capacity is about 22.44 million.

That's 496 million a year.

Transsion and Huawei can't digest this capacity in the short term. Since they can't use it all themselves, they can naturally do contract manufacturing for other companies.

Uncle Bai strongly suggests that Mr. Cook consider it. I'm going to clear out your inventory, so hurry up and learn. After all, Apple is truly too far behind now... behind in every aspect."

Xiaobai was happy to see that the comments under this Weibo post were full of "Haha"s.

If Transsion didn't exist and Huawei developed normally, then China's technology sector would likely be lagging behind.

In that situation, everyone would be willing to choose Apple.

But with these competitors now in the mix, if Apple still refuses to make progress, then they deserve to die—as far away as possible.

Meanwhile, at the TSMC headquarters.

Morris Chang wasn't angry at all; instead, he laughed.

But this laugh was pathetic, and he kept calculating in his mouth, "So that's how it is."

This worried the secretary beside him, but Morris Chang waved him off.

"Don't worry, I'm fine."

"Our 22nm and 16nm must be developed simultaneously. We must strive for a breakthrough in both processes at the same time; only then can we catch up with Transsion."

The secretary nodded and quickly left the office.

Morris Chang continued watching the promotional video. He had originally thought that Transsion had obtained one Lithography Machine through some unknown means, but it turned out... there were three.

At the same time, the even more terrifying news was that Transsion had a stable smuggling route for Lithography Machines.

From a sentimental perspective, Transsion's breakthrough was a good thing for China.

But from a commercial perspective, this action dealt a massive blow to TSMC and had to be crushed.

After final consideration, he decided to make a trip to the United States; he had to convince them to pursue an investigation.

Meanwhile, Cook watched the promotional video and nodded with satisfaction. Global contract manufacturing was a good thing.

Three production lines were even better.

The supply chain manager here asked: "Tim, Transsion has three lines, so does that mean our plan is..."

"Theoretically, yes, but we still need to inquire if they can handle contract manufacturing. Send someone to probe them!"

"But Transsion is our competitor!"

The supply chain manager was still a bit hesitant. After all, in his view, Shen Fei's temper was indeed a bit strange, and he might actually reject them.

"Don't worry.

Contract manufacturing doesn't conflict with the mobile phone business. Samsung also does contract manufacturing for us while selling mobile phones."

Cook looked at him.

"Go ask. I'm going to the lab to see if we can speed up our 14nm chip development."

That evening, Transsion Semiconductor's customer service email received an inquiry from Apple.

It was very straightforward, asking about the possibility of contract manufacturing and the pricing.

When the customer service representative saw the email, they weren't excited at all. It was just Apple, right? That promotional video was made specifically for them.

If there was any surprise, it was just that Apple had reacted so quickly.

The customer service representative quickly delivered the email to Professor Li Jiahui.

"Mr. Li, Apple is here asking about contract manufacturing."

Professor Li Jiahui was slightly surprised. He quickly put down the documents in his hand, looked at the report, and then slowly nodded.

"Reply simply: we can do the contract manufacturing. The capacity limit is 150 million chips.

The tape-out price includes the photomask, 30 wafers, and a one-stop service covering packaging and testing, at 9.5 million USD per session.

The contract manufacturing price is 6,700 USD per wafer."

This price was about 1.8 times more expensive than what was charged to Huawei. Of course, this was the market price.

HiSilicon was cheaper because they were essentially a subsidiary, which counted as an internal discount.

Moreover, this price wasn't just randomly set by Shen Fei. In the future, in 2015, when TSMC was doing 16nm contract manufacturing, it was 4,000 USD per wafer.

Now, three years in advance, with 28nm being the mainstream, this price was certainly not expensive.

Most importantly, Apple could afford it, and they had no other choice.

...

On the other side, Lee Kun-hee was already standing at the entrance of the White House.

The 70-year-old Samsung chairman, who was also the nominal supreme ruler, rarely went out personally to discuss matters, but this time he had to come.

The pincer attack from Transsion and Huawei had brought Samsung's market share in China close to single digits.

The market share in Africa... was almost zero!

In the Indian market, Transsion's Spark series had beaten Samsung so badly it couldn't lift its head. As for the European market, sales of the Motorola S series and Transsion S series were also sliding.

Even the only local market they could still hold onto was beginning to be eroded by Transsion.

Lee Kun-hee met with the US Department of Commerce Secretary Bryson and the presidential trade advisor in a White House conference room.

"Mr. Secretary, Samsung needs the United States' help!"

Bryson looked at Lee Kun-hee, having already thought of Morris Chang, whom he had just met that morning. The two of them must be here for the same matter!

"Chairman Lee, what specific help do you need?"

"Increase industrial restrictions on China's semiconductors.

Transsion's 14nm chips are already in mass production, while Samsung's 14nm is still two years away; the earliest we can reach this process is the end of 2014.

By then, all of the advanced semiconductor capacity will be taken by them, which is not good news for the global supply chain."

Bryson and the trade advisor exchanged a glance. Regarding this issue, they decided to play dumb.

"Chairman Lee, the United States has already sanctioned Transsion. Huaxin Investment has not yet been removed from the entity list, and we are still discussing other methods."

"It's not enough." Lee Kun-hee's voice was filled with urgency. "The Lithography Machine used in Transsion's chip production line, although we can't tell what model it is, is definitely related to ASML.

The United States should strengthen its investigation into ASML. One Lithography Machine leaking out might be explained as an accident, but three is definitely not that simple."

Bryson also nodded; the issue of the Lithography Machine was indeed important.

But unfortunately, they had been continuously investigating this issue without any progress.

However, Obama had approved another batch of funding, deciding to increase the intensity of the investigation.