Chapter 2843 Public Expectations

It was not only Feng Yiping and his group who knew that Qimonda was going to fail, so it was not only them who were happy at this time.

Objectively speaking, after learning the news, some people were several times happier than Feng Yiping and his group.

After waiting for a long time, they finally saw that a peer was going to fail. On such a good day of the Chinese traditional festival Spring Festival, such good news made many people in South Korea, Japan, and across the Taiwan Strait have the urge to pull a few cars of fireworks and firecrackers to set off.

In fact, the entire industry has waited for such good news for too long, too long!

The memory industry is an important part of the semiconductor market. It is an industry with a certain large demand.

Like all semiconductor-related products, it originated in the United States at the beginning, but like other manufacturing industries in the United States, it was later transferred to Japan and South Korea.

Generally speaking, there are currently four major forces in the field of memory chips.

South Korea has put all its efforts into the two major chaebol groups, Samsung Electronics and Hynix under Samsung and Hyundai; in order to compete, Japan integrated the storage businesses of Hitachi, NEC, and Mitsubishi Electric in 1999 to form Elpida; Qimonda under Germany's Infineon.

These are the three most influential giants in the industry, and they occupy more than 70% of the market share. The two Korean companies account for more than 20% each, and Qimonda and Elpida both account for more than 10%.

Micron, which is still quite ordinary at the moment, several foundries across the strait, and many other small companies that do not deserve to be named, together are considered the fourth party, dividing the remaining less than 30% of the market share.

Although there is a huge market demand, for these memory manufacturers, like our domestic pig farms, they often suffer losses. The main reason is not because of the decline in demand, but because there are too many live pigs slaughtered and the market is oversupplied.

The core elements of competition in the memory industry are manufacturing technology and scale effects, which makes it different from the vertical division of labor model of other products in the semiconductor industry. The memory industry basically adopts the IDM model, that is, it has its own wafer manufacturing plant and packaging and testing plant, realizes the internal integration advantage of resources, and has a higher profit margin.

The reason why South Korea is currently the leader in this field is mainly because they have once again adopted the trick of counter-cyclical investment that has been successful in other industries in this field.

The so-called counter-cyclical investment means that when it is determined that an industry will definitely have huge demand, in order to kill the opponent and finally establish their leading position in this industry, they go against the trend when the industry is in a trough and everyone should reduce the scale of production.

This approach is a bit rogue, that is, we don’t compare making money, we compare losing money, and see who can hold on in the end.

If you can’t hold on and go bankrupt, the market will naturally belong to me.

But this method is indeed effective.

Back then, Samsung relied on this trick to leave behind the Japanese companies that originally occupied a leading position in this industry.

Soon after Samsung launched its own memory in September 1984, the market price fell rapidly. At the beginning of the year, one piece could still be sold for $4, but by 1985, it could only be sold for 30 cents. At that time, Samsung's production cost was $1.3 per piece, which means it lost one dollar for each piece sold.

By the end of 1986, Samsung Semiconductor had accumulated losses of $300 million and its equity capital was completely lost.

But they persisted - they had strong support from the Korean government behind them, not only did they continue to sell, but they also increased their investment in product research and development.

Later, due to the sluggish market, Intel withdrew from the memory market and mainly produced more profitable CPUs. At that time, several Japanese companies were fighting on their own and had not been integrated into Elpida, and they also reduced their investment scale and production capacity.

Soon after, the market turned around... Samsung finally became the industry leader as expected.

The main reason for the current sluggish memory market is the same.

In 2007, the growth rate of market demand was already slowing down. In 2007, it had already decreased by 7% compared with the previous year, and in 2008 it was even reduced by 19.8% compared with 2007.

However, under such circumstances, the two Korean companies still ignored the continuous decline in demand and continued to invest a lot of money to expand production capacity. As a result, the industry was hit hard by oversupply and price decline, so that the market situation worsened.

At this time, the big mess that Wall Street had poked was completely broken out, and the decline in consumption in Europe and the United States made the memory market, which was already losing money, even worse.

In September last year when Wall Street's troubles broke out, the price of memory officially fell below the cash cost of 1.3-1.5 US dollars. After that, some manufacturers in Taiwan who could not hold on began to reduce production. Although it led to the participation of Elpida and even Hynix, it could not stop the price from going down like a wild horse.

By the fourth quarter of last year, the price was only 0.6-0.7 US dollars, which was actually lower than the material cost of each manufacturer.

From then to now, the situation is that from the industry leader Samsung down, the entire industry is competing to see who can lose more money, or waiting for who will fail first.

Because once a company goes bankrupt, the market it occupied will be vacated, which is equivalent to further reducing production in the entire industry, which means that there is hope for market prices to recover.

Everyone is guessing that the two Korean companies that have been losing money since the fourth quarter of last year will definitely be able to survive because they have the Korean government behind them.

Qimonda should be fine, as its parent company is strong and it is still the only one left in old Europe, so it should be able to get support from the government.

Micron and the companies in Taiwan should be able to survive for a while because they have a small share and relatively small losses.

Elpida, on the other hand, is already burdened with high debts and it is hard to survive such losses.

No one expected that Qimonda would be the first to fail!

Because Qimonda shamelessly proposed investment to them, but the investment was not received, but everyone knew that it was about to go bankrupt.

Don't blame us for being cruel, it's really too bad, everyone's life is not easy, it's really hard for the landlord to have surplus food, dear, have a good journey, I won't see you off!

For these companies, if they were to write an article titled "On the Collapse of Qimonda", the central idea of ​​the article they wrote would be unprecedentedly consistent: Sacrifice you, and thousands of families will be happy. Goodbye, my friend, goodbye, my friend...

As long as Qimonda collapses, other companies will keep their production cuts unchanged, and the market will continue to reduce supply by more than 10%, then the selling price is likely to return to the cash cost, that is, $1.3-1.5.

In this way, everyone can at least make do with their lives.

…………

Kwon Oh-hyun, who played an important role in the rapid development of Samsung's semiconductor business and officially became the president of Samsung Semiconductor in May last year, is a strong man who will lead the entire Samsung in the future. He has not had a good time recently.

Feng Yiping's acquisition of ARM made them alert all of a sudden, after all, they also bought ARM's IP.

Looking at Feng Yiping's posture, it seems that he wants to build a complete industrial chain around smartphones and mobile devices, and this is exactly what Samsung wants to do.

So, now that we are preparing to help promote Android, are we assisting our future opponents?

In this regard, the relevant countermeasures department is studying countermeasures.

The more direct pressure is that he had just taken over, and the semiconductor department suffered losses again after a few years.

This certainly did not make him happy, as he knew his boss, Old Li, very well.

Now, after hearing the news, he felt that he could finally spend the Spring Festival with peace of mind. .

The same was true for other heads of Hynix and Elpida. Hoo, spring is coming!

Micron of the United States also breathed a sigh of relief, patting his chest and saying with some fear, "It's good, it's good, it's good that you died in front."

On the other hand, there are two companies in Taiwan that will feel a little uncomfortable.

Although Qimonda has its own factory, it still found a foundry because the cost in Germany is too high.

One of them is Huaya Technology, a subsidiary of Formosa Plastics. Because of the payment period, it currently has NT$3 billion in receivables. Although lawyers were sent there immediately, it is estimated that it will be difficult to recover them.

Another foundry of Qimonda, Winbond, is also facing this problem.

But when they met such creditors, they could only look forward, hoping that the collapse of Qimonda would make the price rise, so that they would be better off from another aspect...

In short, on the eve of the Spring Festival, everyone was eagerly looking forward to Qimonda's official bankruptcy. At this time, they actually envied Goldman Sachs. They wanted to be like Goldman Sachs, quietly kicking their peers in the back when they encountered a crisis, so that they could finish more smoothly and quickly.

At this time, Feng Yiping was on his way to Germany overnight with Huang Jingping and Amanda.

At this time, he didn't know that his trip would break some people's dreams.