vrcanaries Chapter 174 Layering
Chapter 174 Layering
2020 11 Month 25 Day.
Before the buzz from the press conference had even died down, Hongyuan Feiniao's official website updated with a new announcement.
The title is brief: "Announcement Regarding the Strategic Adjustment of Hongyuan Flying Bird's Business".
The core content of the announcement consists of only one sentence:
"Starting December 1, 2020, Hongyuan Feiniao will implement a 'dual-layer strategy.' The Hongyuan Feiniao brand will focus on the R&D and production of high-precision MEMS sensors (accuracy requirements ±0.05 degrees and below) for flight control, military, and aerospace applications. Consumer-grade MEMS sensors (for mobile phones, IoT, entry-level automotive applications, etc.) will be developed by member companies within the Feiniao Alliance ecosystem under a technology licensing framework."
The announcement was very restrained in its wording—no "epoch-making," no "milestone," and no fancy embellishments. But the shock it caused within the industry was no less than that of yesterday's press conference.
Because it means that Hongyuan Feiniao no longer positions itself as a MEMS product company.
It is transforming itself into a MEMS technology platform.
Two hours later, 36Kr's analysis article was published online, titled: "Hongyuan Flying Bird's Ambition: From Selling Products to Selling Standards".
The article's core argument is that Hongyuan Feiniao is replicating Qualcomm's model—making the most cutting-edge technology itself and then licensing "sufficient" technology to the entire industry.
"This means that Hongyuan Feiniao's future revenue structure will undergo a fundamental change," the article states. "Previously, Hongyuan Feiniao's revenue came from selling sensors. In the future, Hongyuan Feiniao's revenue will be divided into three parts: direct sales revenue from high-end sensors, technology licensing fees, and ecosystem revenue from the Feiniao Alliance."
In other words, Hongyuan Flying Bird no longer needs to compete with Bosch in every market segment. It only needs to do one thing—maintain technological leadership. As long as its technology is always one generation ahead of the industry, it can always stay at the top of the food chain.
This is why Lin Wei dared to use the 250mm equivalent thermoelastic approximation method—because she still had the 300mm version.
And after 300mm, there might be 400mm, 500mm...
Hongyuan Flying Bird's moat isn't a single technology. It's Su Chen himself.
……
This article sparked widespread discussion within the industry. Seven securities firms updated their research reports that day, with four of them raising their target valuation for Hongyuan Feiniao.
But there are also dissenting voices.
On Zhihu, the anonymous account claiming to be a "former Bosch employee" has posted again. This time, the title is:
"Hongyuan Feiniao's open equivalent thermoelastic approximation method = admitting that it has no moat?"
The post reads:
"Everyone, calm down. Hongyuan Feiniao's opening up of the 250mm equivalent thermoelastic approximation method seems on the surface to be 'ambitious' and 'ecosystem-building.' But think about it from another angle—why open it up in the first place?"
Would you give away a truly competitive technology to your competitor for free?
Will Apple open-source iOS? Will TSMC share its lithography process parameters with SMIC?
No. Because those technologies are their core competitive advantage.
There are only two possibilities for how Hongyuan Flying Bird can open a 250mm aperture:
1. This method is no longer important—others will be able to do it sooner or later, so it's better to open it up early to gain a better reputation.
2. They encountered a bottleneck at 300mm and need to attract more partners and talent by opening up 250mm.
In either case, it illustrates one thing—Hongyuan Feiniao's technological advantage is not as significant as people imagine.
Regarding the supply chain, Bosch acquired a 67% stake in MicroPort Sensors. Hongyuan Feiniao relies on MicroPort Sensors for 30% of its packaging. Hongyuan Feiniao has now invested in a small factory with a monthly production capacity of 50 units—Hongyuan Precision.
50 units. What is Hongyuan Flying Bird's monthly demand? At least 600 million units.
What can 50 units solve? Less than 10% of the shortage.
Therefore, the real crisis for Hungyuan Flying Bird is not technology, but its supply chain.
If Bosch decides to tighten supply through Mini-Sensing, Hongyuan Flying Bird's production capacity will face a severe shortage within 3-4 months.
By then, all those "equivalent thermoelastic approximation methods," "flying bird alliances," and "two-tiered strategies" will be nothing but castles in the air.
A company that can't manufacture products has no value, no matter how good its technology is.
This post received 1.8 likes and became a popular answer on Zhihu that day.
In the comments section, "MEMS Industry Observer" attempted to refute this claim—"Hongyuan Feiniao's investment in Hongyuan Precision is not the end, but the beginning. The 3000 million investment is enough for Hongyuan Precision to expand its production to more than 200 million units within six months."—but this rebuttal only received 2100 likes, far fewer than the original post.
For the first time, public opinion has tipped against Hongyuan Feibiao.
……
That afternoon, Lin Wei finished reading the posts on Zhihu in her office.
She put down her phone, her expression calm.
"This 'former Bosch employee' is no ordinary person," she told Zhou Lin.
Why?
"Because he mentioned a specific figure—30%. Minimally invasive sensors account for 30% of our packaging supply. We've never publicly disclosed this figure. Those who know this number are either in-depth industry analysts, or—"
"Either they're from inside Bosch," Zhou Lin interjected.
Lin Wei did not speak.
"Mr. Lin, should we respond?"
"No response," Lin Wei said. "A response would be an admission that the problem exists. What we need to do now is not engage in online arguments, but—"
Her phone rang.
It was Zhao Ming, the purchasing director, who called.
"President Lin," Zhao Ming's voice was tense, "We've received a notification from MicroPort Sensors."
Lin Wei's fingers tightened slightly.
"explain."
"Starting in December, MicroPort Sensors has reduced our monthly supply quota from 4 million units to 3 million units. The reason is—"
"'Capacity adjustment'," Lin Wei said for him, finishing the sentence.
Zhao Ming paused for a second: "...Yes. They said it's because Bosch's Suzhou plant needs to allocate some production lines for testing during trial production. Therefore, they need to temporarily adjust the supply quotas for external customers."
"Temporary." Lin Wei repeated the two words, a cold smile playing on her lips.
She knew this wasn't temporary. This was the beginning.
Bosch won't cut off supply abruptly—that would be too obvious and cause a public backlash. They'll tighten the supply little by little, like boiling a frog. They'll reduce it by 100 million units this month, and another 100 million next month. By March or April next year, it might be down to 100 million units or even less.
By then, the packaging capacity gap of Hung Yuan Flying Bird will expand from 30% to more than 50%.
"It was two weeks faster than I expected," Lin Wei said.
"What?" Zhao Ming didn't understand.
"I thought they would wait until mid-December to make a move. I didn't expect it to be so fast." Lin Wei's voice regained its calmness. "But fortunately, Hongyuan Precision has already signed the contract. Zhao Ming, contact Chen Jianguo of Hongyuan Precision now and tell him that the equipment purchase has been brought forward—originally planned to arrive before the Spring Festival, it has now been changed to arrive before the end of December. I don't care what method I use, whether it's a price increase or air freight—the first batch of equipment must be installed before the end of the year."
"Understood. And what about China Resources Microelectronics—"
"Keep pushing forward with the CR Microelectronics project as well. Send two engineers over to help them optimize the yield rate. The goal is to increase the yield rate of flight controller-grade packaging from their current 87% to over 92%. Timeframe—two months."
"Two months might be a bit tight—"
"There's no time to be complacent," Lin Wei said softly but firmly. "Bosch has already started. We must build up alternative production capacity before they fully tighten their belts. This isn't a business plan issue. It's a matter of survival."
Zhao Ming paused for two seconds, then said, "I'll go to Dongguan tonight."
"good."
After hanging up the phone, Lin Wei leaned back in her chair and closed her eyes for a while.
She recalled what the calm analyst had said in a WeChat group: "Bosch won't sue for 100 billion. Bosch will quietly build a factory with an annual production capacity of 20 billion units, crushing you with its sheer production capacity. That's more terrifying than a war of words."
Now Bosch doesn't even need to "keep quiet." It's taking direct action on the supply chain.
But Lin Wei didn't panic. Because when she signed with Hongyuan Precision, she had already foreseen this day.
Two roads. Take them at the same time.
Now we just need to move even faster.
……
Meanwhile, in Stuttgart.
Muller signed an internal memo in his office. The memo was titled: "Decision Regarding Adjustments to the Construction Schedule of the Suzhou Base."
The core issue is to advance the start-up time of the Suzhou base from the original third quarter of 2021 to the end of the second quarter.
The last paragraph of the memo reads:
"Given the fundamental changes in the competitive landscape of the Chinese MEMS market, Bosch's Sensors division needs to accelerate its production capacity expansion in China. The early commencement of production at the Suzhou plant is not only crucial to Bosch's market share in the Chinese MEMS market, but also to its technological leadership in the global MEMS industry."
After signing the document, Muller picked up another document from the table.
This document was sent by Stein yesterday—a report on the adjustment of the task force's objectives.
In the report, Muller underlined a passage in red:
"Su Chen's equivalent thermoelastic approximation method is not an isolated engineering approach. It is the first step in a complete theoretical system. If Bosch merely tries to replicate this method, we will forever be following in Su Chen's footsteps. We need to understand this theory at a more fundamental level and develop our own direction based on that."
Müller studied this passage for a long time.
Then he picked up the phone and dialed the number of the president of Bosch China.
Has the supply quota adjustment for minimally invasive sensors been implemented?
"It's already been implemented. Starting in December, Hongyuan Flying Bird's monthly supply quota has been reduced from 4 million units to 3 million units."
"Okay. Reduce production by 500,000 units each month thereafter, reaching 1.5 million units by March next year. The reason given will always be 'capacity adjustment.' Don't do it all at once, and avoid attracting unnecessary attention."
"clear."
Muller hung up the phone.
He knew it wasn't a glorious decision. But business is never a game about glamour.
Bosch has been deeply involved in the MEMS field for twenty years. It will not stand idly by and watch a Chinese company, which has been established for less than two years, rewrite the rules of the entire industry.
Will not.
……
Meanwhile, in the DRIE laboratory on the third floor of Hongyuan Flying Bird's headquarters, Su Chen was completely unaware of all this.
On the lab table in front of him lay a new sheet of draft paper. It read:
300mm trial etching solution v1.0
Parameter calibration method: Regularized Green's function correction (angular symmetry dimensionality reduction)
Estimated calculation time: 6 hours
Number of etching attempts: 1 (if the theoretical prediction is correct)
Target accuracy: 12.08 ± 0.03 degrees
Silicon wafer specifications: 300mm, P-type <100> crystal orientation, 625μm thickness
Expected test etching time: First week of December
Zhou Zhiyuan flew back to Beijing yesterday. But they agreed to have a video call every night at nine o'clock to discuss the details of parameter calibration.
Su Chen looked at the proposal paper and tapped his fingers lightly on the table.
Six hours of calculation. One trial etching.
If successful, the theoretical framework for 300mm will be experimentally validated. Hongyuan Feiniao will become the world's first company to achieve high-precision MEMS etching at the 300mm scale.
If it fails, it means there's a problem with the third-order modified model. It will need to be re-derived theoretically, delaying the process by at least a month.
But they didn't have a month.
Su Chen was unaware that MicroPort Sensors had reduced its supply quota. He was unaware that Bosch was accelerating the development of its Suzhou plant. He was unaware that people online were questioning Hongyuan Feiniao's competitive advantage.
He only knew one thing—the 300mm trial etching had to be completed in the first week of December.
Because that was the time he had promised Lin Wei.
Su Chen never breaks his word.