Chapter 359 SIC's Revenue
The application of STN screens will definitely not be limited to handheld game consoles, as they are clearly ahead of TN screens on the market.
Its application range is very wide, and it is a technology that can bring huge profits to SIC.
However, I will need to talk to Heitaro Nakajima about its promotion later. As the president of SIC, this is one of his jobs.
Today, in addition to the LCD R&D department, Baichuan Feng also decided to take a look at the chip R&D work.
SIC's first generation chips had three different parameter specifications: the 8-bit processor 8089A, the 8-bit enhanced version 8089, and the 16-bit processor 8081.
The most widely used chips on the market are the first two 8-bit chips, and the reason is ultimately because they are cheap.
As a pure 8-bit chip, 8089A is as good as Intel8080, Z80, MOS6502 and other famous chips of the same specification in terms of performance.
Now that Kaede Shirakawa revealed the existence of SIC at a briefing in July, the outside world has paid more attention to this Japanese chip design company.
As the cheapest and most widely used 8089A, it has also received a large number of orders from Japan.
This is a process of advancing slowly from small to large. Only after receiving positive feedback from initial users, more and more customers placed orders with SIC.
In less than half a year until the end of the year, SIC shipped nearly 3 million 8089A chips.
As for why there are such large shipments, it is because 8-bit processors are in great demand in industrial production and consumer electronics.
From industrial process control, digital machine tools, power systems, power grid security, power grid equipment monitoring, petrochemical systems and other fields.
To arcade machines, computers, printers, scanners, fax machines, electronic dictionaries, DVD players and other products in daily life.
All of the above-mentioned fields or products will use 8-bit processors.
Because this is the most basic and mainstream chip processor in the current era, 4-bit machines lower than it are almost on the verge of being eliminated.
Therefore, 8-bit processors will be a must-have product in the industrial and electronic manufacturing industries for a long time to come.
This also means that SIC's 8089A chip can be sold for at least 10 years.
This is a sure win-win deal. Now SIC can make money from the design of 8089A for more than ten years.
At most, we can design some other versions of 8089A every year according to customer needs to suit different applications.
But this is at most a minor operation, and the general design structure will not change, so there will not be too much R&D cost.
Another reason why 8089A received a large number of orders is that some government departments took the lead in using SIC chips.
For example, the fields mentioned above, such as power systems, grid security, petrochemicals, etc., are all important departments of the country.
Generally speaking, processors in these fields have very high reliability requirements and previous usage habits will not be easily changed.
However, after it was first used on a large scale in Akita at the beginning of the year, it began to slowly spread to the entire Northeast.
Today, SIC's chips have occupied the entire market in the northern part of Honshu Island and Hokkaido.
Even the central agencies in Tokyo have begun to pay attention to the existence of such a domestic chip development organization.
With these important departments taking the lead in using it, what is there for ordinary companies to hesitate about? Of course they will support domestic products.
In this regard, our people are the same as those in China. As long as the quality is reliable, we will support domestic products to the best of our ability.
We have been using Xiaomi's chips for so many years. Now Japan has products that can compete with Xiaomi's. Why not use our own chips?
Therefore, it took nearly a year from the time 8089A was designed, and the crazy shipments in the past six months were the biggest reason why it was able to achieve sales of 3 million.
Due to the surge in shipments, the production cost of 8089A has now dropped below $3.
Its selling price basically hovers around US$18, and the US$15 difference is where the profit lies.
3 million films means a profit of 45 million US dollars, which is approximately 11.25 billion yen.
The profit earned in this short period of time is more than 10 times SIC’s revenue for the whole year last year. The actual result is so astonishing.
And this is just the 8089A chip, so how does its enhanced version 8089 perform?
In fact, its large-scale application was earlier than 8089A, such as Namco's arcade machines and Fujitsu's computers.
Especially Fujitsu's FM-7 personal computer is definitely the star product among computers this year.
From May to the end of the year, about 800,000 units were sold, basically winning the sales championship of personal computers this year.
Its explosive sales were largely due to SIC chips and the open MS-DOS system.
Also because of the sudden rise of FM-7, giants such as Hitachi, Toshiba and Panasonic also paid attention to the existence of SIC.
Because of the IBM commercial espionage case in June, these companies are now taking a more cautious attitude towards all computer-related technologies in the United States.
In particular, Hitachi, in order to prove its innocence, is eager to replace all parts with Japanese domestic products.
Other computer components are easy to come by, but looking around, there is not a single company in Japan that has the capability to produce processor chips.
Coincidentally, in July, Shirakawa Kaede announced the existence of SIC, so SIC became Hitachi's only choice.
However, the specific orders are still being discussed, as these giants have huge appetites.
They want to license the SIC chip technology and then produce it themselves.
How could Baichuan Feng agree to such conditions? That would be tantamount to digging his own grave.
Given their size and investment in the semiconductor industry, once they obtain SIC's technology license, SIC may not be able to sell any of its own chips.
Don’t forget that these giants who are the kings of volume are also members of the VLSI (Very Large Scale Integrated Circuit) Institute.
Baichuan Feng had heard in his previous life how they organized themselves to seize the U.S. DRAM chips.
Handing over their best technology to them, with their accumulation in the semiconductor field, there is no doubt that SIC will just be working for nothing.
So even if these giants join forces to put pressure on him, Baichuan Feng will never give in.
Don't forget that Shirakawa Electric is now a company with a market value of over one trillion yuan. It has stood its ground straight and is not afraid of any threat from any giant.
This is one of the hidden benefits of going public, the huge social influence that everyone would have to think twice.
However, Shirakawa Kaede has already talked with Hitachi privately, and the other party is likely to be the first to give in.
After all, they are under the greatest pressure, so if SIC gives some concessions, the two sides will almost reach an agreement.
As for the remaining few, the alliance no longer exists, and it is only a matter of time before they humble themselves and return to the negotiating table.
Although we have not yet received orders from these giants, we have received orders from Fujitsu's personal computers, as well as several arcade manufacturers such as Namco, Taito, and Sega.
The shipment volume of SIC8089 has reached about 1.4 million pieces, exceeding 1 million pieces, and the manufacturing cost of the chip has dropped to less than US$25.
However, in order to expand the market, the price of 8089 was set relatively low, around US$40.
However, in order to make up for the decrease in profits, the processor chip 8089F used in arcade machines and personal computers was later designed with a modular design that integrated graphics auxiliary chips.
With the significant improvement in graphics functions, the price of 8089F has also increased to the range of 60 to 70 US dollars.
In this case, the profit of one 8089F is increased to about US$35.
When it comes to harvesting customers' wallets, SIC uses high-tech means.
You see, by adding a chip, the performance is more comprehensive and powerful.
But the price is still much cheaper than the 8088's price of over 100 US dollars. I just want to ask you if you are tempted.
It turns out that both Fujitsu and Namco are very interested.
1.4 million pieces, with a profit of $35 per piece, a total of $49 million, or 12.25 billion yen.
Although the shipment volume is far lower than the 3 million pieces of 8089A, the overall profit is higher than the former due to the higher profit margin.
These two chips are currently SIC's main profitable products. As for the 16-bit chip 8081, the current shipment volume is not high.
Although its performance is more powerful, very few customers choose this chip due to its high price.
However, due to the outstanding performance of 8089F, Fujitsu has decided to use the 16-bit chip 8081 in its high-end personal computers next year.
In addition to Fujitsu, major research institutes in Tokyo are also one of the main customers of 8081.
Because these research institutes all need chips with powerful computing power, ordinary 8-bit chips cannot meet their needs at all.
Although it has been on the market for almost two years, only a total of about 300,000 pieces have been shipped so far.
This shipment volume is really low. Now we can only hope that Fujitsu’s PC sales will improve next year.
We also hope that they will purchase more mainframes and compatible computers from Hitachi, otherwise we don’t know when 8081 will usher in an explosion.
The price of 8081 is around $280, but because less than one million units have been shipped, the current cost is as high as $100 per unit.
But even with a profit of nearly $180, 300,000 chips brought in $54 million in revenue, making more money than the above two chips.
The fact is so outrageous, they sold the least but made the most profit, 13.5 billion yen is also a huge amount of money.
This is also the reason why Shirakawa Kaede tried his best to promote 8081, because it is really profitable.
However, despite its high profits, SIC's current base is still on 8-bit chips.
Because their shipments are large enough, this means the market is stable and demand is strong.
In comparison 16-bit chips are currently only used in high-end devices, and it is expected that it will take another two years for them to penetrate the market and be widely used.
This is the overall operating situation of SIC's chip business at present, which is much better than last year.
However, Shirakawa Kaede expects that as SIC's popularity increases, its turnover will increase significantly next year.
So in order not to fall behind, he asked SIC to develop the next generation of chips as soon as possible at a very early stage.
"Mr. Dao, will the next generation chip specifications of SIC still follow the two specifications of 8-bit and 16-bit?"
"To be precise, although the bit width is the same, the number of transistors integrated inside has been greatly increased, and the specifications of the main frequency have also been diversified."
Regarding the development of chips, it has always been Masayoshi Shima who has been planning.
He has extensive design experience and is most familiar with the design ideas of manufacturers such as Intel.
Therefore, when it comes to chip iteration, Baichuan Feng also believes in his vision.
"Please tell us about the progress and specifications of the next generation chip, Mr. Dao."
Chips have now become SIC's most profitable business, and Baichuan Feng is of course concerned about its progress.
