Source: Star List

    After a few days in Shenzhen, the customer got a sentence. The domestic chip company told customers that it planned to make 100 million yuan of sales in 2023 and prepare to lose 40 million yuan.

    With the sales of 100 million yuan, the company refinanced 200 million yuan and lost 40 million yuan, but still earned 160 million yuan. What a good deal!

    No guns, no guns, the enemy helped us build. Without technology, products and sales, investors will help us build.

    As long as the domestic chip craze goes together, everything can turn corruption into magic. Everything has cause and effect. Domestic chip circuit, the inner roll is due to the core.

    The first volume is from "Agricultural involution - the process of ecological change in Indonesia" by American anthropologist Giltz. The original meaning refers to the phenomenon that human society stagnates or cannot be transformed into another advanced mode after reaching a certain form at a certain stage of development. When social resources cannot meet the needs of all people, people gain more resources through competition.

    Domestic chips have entered the era of internal volume, and we also realize that this internal volume is essentially meaningless internal consumption. However, it is inevitable that this is not caused by personal factors of chip entrepreneurs, but the product of the times.

    Only by participating in the "volume" can we win and win tomorrow.

    It all started in 2019. Chips are hot, capital is pouring in, and the company‘s valuation is rising. Almost every investment has achieved substantial profits on the book, which has lasted until now. Domestic chip design companies increased from more than 1600 in 2018 to more than 3200 in 2022.

    Looking back, there is cause and there is result. It starts from investment and belongs to insiders. Investment volume, investment volume and recruitment volume after investment volume; Recruitment volume, recruitment volume, capacity volume of recruitment volume; Capacity volume, capacity volume, capacity volume sales volume; Sales volume, sales volume, and the end of sales volume is chicken feathers.

    I have seen the craziest appearance of capital, finding ways to participate in the investment of domestic chip projects through various relationships. Some domestic chip companies are crowded with investors. However, Sanwu WeChat and I became spectators, and at the peak of capital, we were unable to get sympathy and favor. Standing alone in the wind, just to not miss the beauty, Sanwu Micro carried 10 million with angel wheel for 3 years. With the exception of laboratory instruments and equipment, the annual expenditure is not more than 3 million yuan, including staff salaries, R&D streamers, and company operations.

    At the beginning of many chip startups, only the boss did not work. After getting the investment, they dug people everywhere. After digging people, they raised money, and then dug people. The salaries of R&D engineers and talents in the industry have soared in this way, so the bosses and HR of chip companies are lamenting that it is difficult to recruit people.

    After that, there was a phenomenon that the technology of the company whose talents were hollowed out could not go up and stopped at the original technology and product level. The poachers quickly repeated the technology and products of the original company, resulting in serious product homogeneity in the market. With products, we can stock up and seize the market. Every company releases its production capacity, resulting in tight production capacity. Tight production capacity further leads to capacity involution, which in turn stimulates chip companies to increase stock. This is how inventories are generated. Medium and low-end products continue to consume inventories. Foreign high-end products are not affected and may be out of stock.

    After the capacity volume is completed, the next step is volume sales. In the face of inventory pressure and further financing pressure, the only solution is sales. The era of story-telling financing for domestic chips has passed, and it is impossible to refinance without solid sales. Making money by selling chips? It‘s just a dream, and the ending is empty. In 2019, I wrote an article "The Sales Dilemma and Outlet of Domestic Chip Companies", which mentioned that domestic chip companies have products that are not sold, and sales that are not profitable. Over the past few years, the sales of domestic chips have become more and more popular. Profits are extravagant, sales are life-saving drugs, and sales at a loss are at all costs.

    Domestic chip sales have reached a new high. Who can win from the inside roll? How much power does capital have?

    The first wave of beneficiaries and winners of domestic chip companies is the companies that replace domestic chips. This wave of low-end chip replacement has been basically completed. High-end chip replacement needs longer time and more investment. Foreign companies are also looking for ways to shake off Chinese chip companies. Companies that have completed domestic substitution have either been listed or will soon be listed. Those companies that are still a long way from listing are basically replacing domestic companies.

    There are two ways to replace domestic chip companies, one is to seize the market at a low price, and the other is to achieve corner overtaking through new technology to bring market opportunities. It takes time to wait for the market opportunities brought by new technologies, which domestic chip startups cannot face and bear. There are pressures from investors, supply chain and internal companies. Even though Sanwu Microenterprise can take the lead in mass production of WiFi7 FEM, it takes time for WiFi7 market to rise, so it can only choose to live in the present.

    WiFi7 test data provided by NI China Innovation and Development Center

    Therefore, killing the market at a low price has become the road that must be taken at present. Companies with more financing can benefit from it, while companies with less financing can only benefit from it. In the current era of product homogenization, capital once again plays a very important role. In this chip sale, capital will undoubtedly become the biggest loser.

    For today‘s domestic chip start-ups, differentiated products and differentiated markets are of little help. No matter how small the market is, there are a lot of people to do it. For example, the WiFi FEM circuit was a relatively subdivided circuit before, but today there are nearly 30 companies involved.

    How to roll it out is a test for every domestic chip startup. Don‘t talk about making friends with time, because there is not much time left for domestic chip startups.