Shockingly, a counterfeit factory has produced a 3-nanometer chip.

Chapter 293, Part 3: Santiago Lobbying

"Hey bro upstairs, someone sent you a Heavenly Dao cultivation technique. Go learn it quickly, we're waiting for you to join the telepathic communication!"

"What Heavenly Dao Technique? I thought it was an English word! I don't understand it at all!"

Digital bloggers weren't going to be left out either; Xiaobai unboxing also took the opportunity to post a Weibo.

"Uncle Bai specifically asked a friend to look up information about Transsion Semiconductor."

This company was only established two years ago! And then it completed the self-developed 28nm and 14nm processes. As for the lithography machine... that's not important.

"Since we already have the equipment, there's no need to worry about these minor issues. China's semiconductor supply chain is now fully operational. Sanctions? Not a chance!"

"By the way, Transsion's three production lines have a monthly capacity of 6 wafers."

The 28nm process can produce approximately 1890 million wafers per month [estimated, after accounting for yield losses].

The monthly production capacity of 14nm is approximately 2244.

That's 4.96 million a year.

Transsion and Huawei cannot absorb this production capacity in a short period of time. Since they cannot use it all themselves, they can naturally outsource production to other companies.

Uncle Bai strongly suggests that Mr. Cook consider this: I need to clear out your inventory, so hurry up and start studying.

After all, fruit is really outdated now... outdated in every aspect."

Xiaobai was delighted to see that the comments section of this Weibo post was filled with "haha".

Without Transsion, if Huawei had developed normally, China's technology sector would likely have fallen far behind.

In this situation, everyone is willing to choose fruit.

But if a fruit company doesn't strive for improvement in the face of these competitors, then it deserves to die, and should die as far away as possible.

Meanwhile, at the headquarters of Taikun Electric.

Morris Chang not only wasn't angry, but he actually laughed.

But the smile was pathetic; he kept muttering to himself, "So that's how it is."

This greatly worried the secretary standing nearby, but Morris Chang waved his hand dismissively.

"Don't worry, I'm fine."

We must develop our 22nm and 16nm processes simultaneously, striving for breakthroughs in both technologies at the same time, so that we can catch up with the upstream audio technology.

The secretary nodded and quickly left the office.

Morris Chang continued watching the promotional video. He had initially thought that the rumors suggested they had somehow acquired a lithography machine, but it turned out to be three.

Even more alarming news is that Transsion has a reliable route for smuggling lithography machines.

From a sentimental standpoint, the breakthrough in communication technology is a good thing for China.

From a business perspective, however, this action dealt a huge blow to Taikun Electronics and must be crushed.

After much deliberation, he decided to travel to America to persuade them to pursue the investigation.

Meanwhile, Cook watched the promotional video and nodded in satisfaction. Global contract manufacturing is a good thing.

Three lines would be even better.

The supply chain manager here: "Tim, Transsion has three lines, so does that mean our plan is...?"

"That's the theory, but whether we can actually outsource production needs to be discussed and we should send someone to test the waters!"

"But Transsion is our competitor!"

The supply chain manager was still a bit hesitant, after all, in his opinion, Shen Fei's temper was indeed a bit strange, and he might really refuse them.

"Don't worry.

OEM manufacturing and mobile phone business don't conflict. Samsung also manufactures for us and sells mobile phones at the same time.

Cook looked at him.

"Go ask, I'll go to the lab and see if we can speed up our 14nm chips further."

That evening, Transsion Semiconductor's customer service email received an email from Apple.

This is very straightforward; it's simply asking if they can do the manufacturing and what the price would be.

The customer service representative wasn't excited when they saw the email. It's just fruit, after all; that promotional video was made for them.

If there's anything surprising, it's that I didn't expect the fruit to arrive so quickly.

The customer service staff quickly delivered the email to Li Jiahui.

"Mr. Li, the fruit vendors have asked about outsourcing."

Li Jiahui was slightly surprised. He quickly put down the documents in his hand, glanced at the report, and then slowly nodded.

"In short, we can do contract manufacturing. The maximum production capacity is 1.5 million chips."

The tape-out price includes the mask, 30 wafers, packaging, and testing—a complete service—for $950 million per transaction.

The manufacturing price is $6700 per piece.

This price is about 1.8 times higher than the price paid to the electronics factory; of course, this is the market price.

HiSilicon Semiconductor is cheaper because it's a subsidiary, so the discounts are internal.

Moreover, this price was not randomly set by Shenfei. In 2015, when TSMC was manufacturing 16nm chips, the price was $4000 per chip.

Now that it's three years ahead of schedule, and with 28nm being the mainstream, this price is indeed not expensive.

Most importantly, the fruit is affordable, and they have no other choice.

……

Meanwhile, Lee Kun-hee was already standing at the entrance of the White House.

The 70-year-old Chairman San Sang, who is also the nominal retired emperor, rarely goes out to discuss matters in person anymore, but this time he had no choice but to come.

The combined pressure from Transsion and Chrysanthemum has brought Sansang's market share in China close to single digits.

In Africa, market share is almost zero! In the Indian market, Transsion's Spake series is giving Samsung no chance to compete. As for the European market, sales of Motorola's S series and Transsion's S series are also declining.

The only remaining domestic market that Transsion could hold onto was also beginning to be eroded.

Lee Kun-hee met with U.S. Commerce Secretary Bryson and the President's Trade Advisor in the White House conference room.

"Mr. Secretary, Sansa needs America's help!"

Bryson looked at Lee Kin-hee and thought of Morris Chang, whom he had just met that morning. The two of them must have been talking about the same thing!

"Chairman Li, what specific kind of assistance are you offering?"

"Increase restrictions on China's semiconductor industry."

Transsion's 14nm chips are already in mass production, while Sanson's 14nm chips will take another two years. We won't be able to reach this technology until the end of 2014 at the earliest.

"At that time, we will have captured the entire advanced semiconductor production capacity, which is not good news for the global supply chain."

Bryson and the trade advisor exchanged a glance; they decided to play dead on this issue.

"Chairman Li, the United States has already sanctioned Transsion. Huaxin Investment has not yet been removed from the Entity List, and we are still discussing other solutions."

"Not enough." Lee Kin-hee's voice was full of urgency. "The lithography machine used in Transsion's chip production line, although we can't tell what model it is, is definitely related to ASML."

The United States should strengthen its investigation into ASML. The leakage of one lithography machine can be explained as an accident, but three leaks are definitely not that simple.

Bryson nodded in agreement; the issue of lithography machines was indeed important.

Unfortunately, they are continuing to investigate this issue, but there has been no progress.

However, Obama approved another round of funding, deciding to intensify the investigation.