374: Chapter 374 Lenovo Goes All In on Semiconductors?

Just as everyone was celebrating, Xiaobai Unboxing also posted a comment on Weibo:

"Everyone, calm down. The price reduction is just the beginning; ASML will not sit idly by.

Their next-generation DUV Lithography Machine should already be on the way, and we still cannot achieve a breakthrough with immersion Lithography Machines or EUV Lithography Machines in the short term.

Domestically produced Lithography Machines have just come out; their yield rates, stability, and mass delivery capabilities still need time to be verified.

We can be happy, but we cannot get carried away.

This is the first victory in a protracted war."

After Xiaobai Unboxing posted this, Transsion Technology's official Weibo left a very subtle comment.

"The blogger is right, but..."

"Oh, the official account is here. It seems there really is more..."

"I was about to say that Xiaobai was right and let us celebrate for one night, but now it seems it will be more than just one night."

By the next morning, ASML's PR team discovered that their carefully prepared rhetoric about technological iteration and offering concessions to customers had been interpreted on the internet across the ocean as a complete mockery and carnival.

Their staff used translation software to translate one of the most popular comments:

"Back when you sold a Lithography Machine for 200 million, 300 million, or even more, you said it was the price of cutting-edge technology. Now that you sell it for 110 million, is it suddenly no longer cutting-edge technology?

Stop pretending. Everyone knows the reason for the price reduction: it's because China has managed to build one."

The comment on this Weibo post included a meme: "A panda wearing sunglasses and smoking. The text above it reads: 'Sorry, we accidentally made it again.'"

Looking at the news online, the PR team had a bad premonition at this moment. Could it be that their price reduction was still not enough?

But if they lowered the price any further, they would truly be losing money.

Meanwhile, on the other side, at the Lenovo North Research Park in Beijing, the headquarters of the Mobile Business Group.

Because of the domestic Lithography Machine situation, combined with being ripped off while purchasing chips, a bold idea suddenly flashed through Liu Jun's mind!

So, he convened a meeting.

At this moment, around the conference table sat over a dozen heads of the mobile business, with a copy of the procurement contract for the Taishan 710 in front of each of them. The unit price on it made everyone feel heart-stricken.

As for Liu Jun, his ashtray was already filled with seven or eight cigarette butts, even though he had quit smoking for three years. In the past, despite many complex situations, he had never thought about smoking, but this time...

"160 USD..."

Liu Jun looked at the contract and sighed silently once again.

"The quote for the Fire Dragon 800 is 45 USD. If we sign this contract, we'd really be getting a huge bargain, right?"

The others in the conference room didn't dare to respond, as they knew their boss was being sarcastic.

According to their investigations and the compilation of some past data, when the Motorola S2 used the Taishan 900, the chip cost was only 50 USD. Now, they have to spend 160 USD to buy a similar product, and the other party even thinks Lenovo is getting a bargain.

"We really picked up a huge deal!" Liu Jun said again, gritting his teeth.

Product Director Wang Hui coughed lightly. He understood what Liu Jun meant, so he chimed in:

"Mr. Liu, whether the performance is crippled or not is one thing, the key is that Transsion has us by the throat.

They said they won't sell the 9 series, only the 7 series.

And supply is also an issue. If production capacity gets tight, we will be the first ones to be cut."

Supply Chain Director Li Min also added: "I've seen the people they sent; they are all arrogant and look down on us completely.

Back when we had the Taishan 610, we encountered a power consumption issue and sent three emails to Transsion, but we had to wait four days for a reply.

If the same problem happened at Huawei, it could be solved in less than four hours. This gap in development cycles will only keep widening."

A chorus of sighs echoed throughout the conference room. At this moment, they were all wondering if their initial insistence on going all-in on Transsion was truly wrong.

At this moment, Liu Jun took a deep drag of his cigarette, stubbed it out, then looked up. His gaze swept across the crowd, and he spoke of the biggest hesitation in his heart.

After all, his goal was going against the very foundation of Lenovo... If he wasn't careful, he might be the one getting killed.

"I have a direction, let's discuss it. If you think it's feasible, we will report it to Mr. Liu and see what the boss thinks."

Everyone nodded, but a small number of people lowered their heads even further; they really didn't want to discuss this issue. Seeing these complex reactions, Liu Jun also hesitated...

"Should we develop our own chips?"

With that one sentence, his voice was very soft, but it still caused a huge impact in everyone's hearts.

Some people instantly understood his line of thinking and widened their eyes, while others lowered their heads to look at the table, and of course, some were whispering to each other.

Wang Hui hesitated for a moment, but ultimately still tactfully raised an objection.

"Mr. Liu, the investment for in-house chip development is not a small amount. We cannot compare ourselves to those two monsters, Transsion Semiconductor and HiSilicon.

Take MediaTek, for example; their R&D cost for making a mobile SoC is roughly 200 to 300 million USD, with a cycle of about 18 months.

Starting from scratch, without a team, without IP, and without experience, we won't be able to produce our first chip in under two years without 500 million USD.

And even if it comes out, whether the performance can catch up to the mainstream is another question."

Li Min also shook his head: "Moreover, in terms of the supply chain, we have deep cooperation with Qualcomm, and we also have relationships with MediaTek.

We have also always had a cooperative relationship with Transsion.

Once we start our own R&D, it's equivalent to creating a certain rift with all chip manufacturers.

If we just produce a few samples to fool consumers, that's fine, but if we go for large-scale mass production, that's really turning against them. When that time comes, will they cut off our supply? What will we do during the transition period?"

At this time, Cheng Hao, a senior manager in the Strategy Department, raised his hand. He felt he was the only person in the room who understood Liu Jun. So, he said with a smiling face:

"I actually think that in-house chip development doesn't necessarily mean we have to release a product immediately.

We can start the project first, recruit people first, and paint a picture first. The capital market loves stories, especially the story of 'autonomous and controllable.'

Look at Transsion; isn't it because they have their own chips that their valuation keeps soaring, even if they don't want to go public?

If we present this line of thinking to Mr. Liu, maybe we can really get the project approved. As for subsequent progress... once we have any problems, we can pull out the in-house chip project to save the day. Isn't that a good thing?"

The corners of Liu Jun's mouth twitched; it seemed like he was smiling, yet it also seemed like he wasn't.

He truly wanted to develop chips in-house, but Lenovo's strength... this was already the best answer.

"Cheng Hao is right. In-house chip development doesn't necessarily have to succeed, but it must be announced."