Rebirth 08: Rise from copycat phones

Chapter 612 The Boom of Domestic Packaging

Xu Shenxue is very concerned about the production capacity of various computing chips, as this is related to the advancement of a series of core businesses of Zhuyun Group.

He has always paid close attention to the production capacity of the APO series graphics cards, in particular.

With the continuous development of the field of artificial intelligence, the market size of various computing chips is also gradually expanding. In addition, the emergence of virtual devices has directly led to a surge in demand for APO series graphics cards.

In the current computing card market, Zhuyun Group basically has a complete monopoly. Its only competitor, AMD, has a very low market share in computing cards and can only barely survive by relying on orders from some special fields in the United States, such as defense orders.

The computing power cards from Zhiyun Group, also known as the APO series graphics cards, currently have the APO6000 graphics card as the most advanced, and demand has long exceeded supply.

Although Zhiyun Group has never publicly disclosed the specific sales figures for the APO6000 graphics card, the data it provides is a general overview of its computing chip business, which includes the entire APO series business.

However, external third-party analysis agencies can also estimate a rough figure based on the purchase volume of major companies that purchase APO6000.

It is estimated that the annual sales volume this year will be around three million units... This does not mean that the production capacity of Zhiyun Group is only four million units, but as everyone in the industry knows, Zhiyun Group itself also uses a large number of APO6000 graphics cards, but no one knows exactly how many.

The sales of these three million APO6000 units brought substantial revenue and profits to Zhiyun Group.

However, Zhiyun Group does not only produce APO6000 graphics cards. They also mass-produce APO5000S graphics cards because this graphics card, like the APO4600S graphics card, uses 2.5D packaging technology and HBM2 memory. In order to free up enough production capacity for APO5000S, they completely stopped producing APO4600S graphics cards in February of this year.

The APO5000S graphics card was supplied to some models of Zhiyun virtual devices, and also sold to other businesses. Many small and medium-sized enterprises could not purchase the APO6000, and even if they could, they could not afford it. Since the APO5000 graphics card had been discontinued, they could only purchase the APO5000S graphics card.

This graphics card also sold very well.

Next up is the APO5000M graphics card. This graphics card doesn't have much of a market in the field of enterprise AI training and support. Although the unit price is cheap, it uses BGA packaging, which results in poor computing power and high power consumption. As a result, its average computing cost is relatively high.

This has led companies to prefer the more expensive APO5000S graphics card over the seemingly cheaper APO5000M graphics card.

The APO5000M graphics card is primarily intended for use by Zhiyun Group's own virtual devices, serving as a computing power center for mid-to-low-end virtual devices. The consumer market doesn't care about the average computing cost, so a little more or less electricity cost has little impact.

Meanwhile, some lower-end models of this graphics card, such as the 16GB and 24GB versions, are also exported to companies like Vcool Electronics, Apple, Sixing, Huawei, and Google, for use in producing their own VR virtual reality devices!

The APO5000M graphics card, although it uses the outdated BGA packaging, has mediocre computing power and high power consumption, resulting in high average computing cost, making it very uneconomical for training artificial intelligence. However, it is cheap... It is still very good for consumer applications.

Everyone knows the APO6000 graphics card is good, it's top-of-the-line for virtual machines... but you can't afford one that costs three or four hundred thousand.

Those lunatics at Zhiyun Group sold the high-performance APO6000 at an exorbitant price; the 80GB version costs 35 yuan! They're ripping people off…

Therefore, after comprehensive consideration, the APO5000S graphics card, with a starting price of 150,000 and a high-capacity version costing just over 200,000, has become a common solution for many companies to develop artificial intelligence.

Even with a 7nm process, 2.5D packaging, and HBM2 memory, it's still usable.

In the consumer market, the APO5000S, starting at 150,000 yuan, is unrealistic. Such an expensive item is only affordable for consumers with virtual equipment from Zhiyun Group itself.

Therefore, when major smart terminal companies develop VR virtual devices, they tend to use outdated graphics cards like the APO5000M, which seem to be lower-end but only cost tens of thousands of yuan.

Thanks to the explosive growth of the virtual device market, the production and sales volume of APO5000M, including both internal use and external sales, is expected to exceed 10 million units this year, which is quite remarkable.

This is also the computing card with the highest production and sales volume in the Zhiyun Group.

Finally, there's the outdated APO4500M, a computing card using a 12nm process and BGA packaging. It's currently the lowest-end and cheapest computing card sold by Zhiyun Group, with its entry-level 16GB version priced at just over ten thousand yuan.

Currently, the computing power card is no longer used on a large scale by Zhiyun Group; only a portion is kept in stock for the logistics and maintenance of virtual equipment.

However, some companies still purchase it for use in some low- to mid-range VR virtual reality devices. For example, the VR virtual reality device released by Vcool Electronics last year uses the APO4500M/16GB version.

In addition, some hobbyists buy these cheap computing cards to tinker with small AI models... Of course, this is not the mainstream and does not contribute much to sales.

As major smart terminal manufacturers gradually adopt the APO5000M as a replacement for their new products, the APO4500M graphics card will slowly enter the end of its life cycle until it is discontinued.

The APO6000, APO5000S, APO5000M, and APO4500M graphics cards are the computing cards currently sold by Zhiyun Group.

Its total production capacity is also quite large, and it is expected to reach about 20 million units this year... However, most of them are used by the Zhuyun Group's own computing centers or virtual equipment, and only a few million units are sold to external parties.

Such a huge demand also places enormous demands on the semiconductor manufacturing division of the Zhuyun Group in terms of production capacity.

From the perspective of logic chip production capacity, such as equivalent 5nm process capacity and equivalent 7nm process capacity.

Then there's the production capacity for high-bandwidth memory like HBM2/3.

Furthermore, advanced packaging capacity, such as 3D/2.5D packaging, and even outdated BGA capacity, have all faced enormous challenges!
Not to mention 3D packaging, this is currently a proprietary technology of Zhiyun Group, possessed only by Zhiyun Microelectronics. There is nowhere to find production capacity from outside.

There is also a shortage of 2.5D packaging capacity. Zhuyun Microelectronics' own 2.5D packaging capacity is insufficient. Last year, it began to cooperate with the domestic packaging company JCET Group, and this year it has also started to look for 2.5D packaging capacity overseas.

Let alone advanced 3D and 2.5D processes, even mature BGA packaging capacity is starting to run out...

Since last year, Zhiyun Microelectronics' own BGA packaging capacity has been insufficient, and it has begun to look for other packaging companies in China to do contract manufacturing.

Starting this year, even domestic BGA packaging capacity has become insufficient, forcing Zhuyun Group to seek BGA packaging capacity overseas...

The reason is simple: the demand for APO5000M and APO4500M, which use BGA packaging, is too high.

Such a surge in demand in such a short period of time, and packaging capacity is not something that can be expanded suddenly, there has to be a buffer period of several years for capacity expansion!

The frantic demand for advanced packaging technology capacity from Zhuyun Group has led to a global shortage and price increases in the advanced packaging market… Even BGA packaging capacity, which had maintained relatively stable prices for many years, has seen a significant price hike. This has made many companies specializing in semiconductor packaging extremely happy… it's like money falling from the sky!

The advanced packaging market was originally quite stable, with everyone just making a meager living... But then Zhuyun Group emerged and started grabbing advanced packaging capacity everywhere, which immediately ignited the global packaging market.

Leaving aside overseas markets, the packaging sector within the domestic semiconductor industry is currently a hotbed for investment.

Seeing the booming market, JCET is making a big investment in building new factories to expand its BGA and 2.5D packaging capacity.

Other leading domestic packaging companies are following suit, expanding their production capacity to compete for OEM orders from Zhiyun Group!
Everyone knows that the orders from Zhiyun Group are top-tier prizes!

High unit price, large order volume, quick payment... and as long as you don't mess around, the orders are very stable.

Being able to latch onto the coattails of Zhiyun Group is like embarking on a smooth road to success.

This can also be seen in the stock market. Since last year, the stock price of JCET has tripled. Every time good news is announced that the computing cards of Zhiyun Group are selling well, the stock price of this company will hit the daily limit!
The investment logic is simple: Zhuyun Group's computing cards are selling very well, but its 2.5D and BGA packaging capacity is insufficient, so it needs to seek external contract manufacturing.

JCET Group is the company that has received the largest share of outsourced packaging orders from Zhuyun Group...

In other words, the more popular the computing cards of Zhiyun Group are, the more OEM orders they will receive from JCET, and the higher JCET's revenue and profits will be.

It's not just JCET Group; several other first- and second-tier semiconductor manufacturing or packaging companies in China are also investing heavily in advanced packaging technology.

For example, SMIC is also developing 2.5D and even 3D packaging technology.

Many domestic semiconductor companies are developing advanced packaging processes, but it's not that they all rely on the foundry orders from Zhuyun Group. Rather, the semiconductor industry is currently facing some bottlenecks: the investment and processing costs of advanced processes are getting higher and higher. The current equivalent five-nanometer process is already very expensive to develop.

The equivalent 3-nanometer process that Zhiyun Group is advancing is even more expensive. Building a 3-nanometer semiconductor factory requires an investment of two to three hundred billion US dollars. Moreover, with the use of EUV double exposure technology, its foundry costs are also rising rapidly.

Based on investment and manufacturing costs, future chips using the equivalent 3-nanometer process will be much more expensive than chips using the equivalent 5-nanometer process... to the point that they will be unaffordable in many fields.

Therefore, in order to control costs and achieve higher performance, the semiconductor industry today is increasingly inclined to adopt advanced packaging processes when designing and manufacturing chips.

The APO series graphics cards are a typical example of this technology approach.

In addition, Zhiyun Group also has a series of computing power chips such as EYQ chip, PX chip, LC chip, and EYEQ chip, which also adopt different types of advanced packaging technology.

Other companies' chips are also moving towards advanced packaging.

In the future, advanced packaging technology will be an important technology for the continued development of semiconductors... not only limited to the field of computing cards, but will also gradually cover other types of chip fields.

Therefore, in recent years, advanced packaging technology has become a key investment area for Zhuyun Microelectronics, a subsidiary of Zhuyun Group, which has invested a lot of money in building advanced packaging technology.

However, in order to concentrate resources, Zhuyun Group is now mainly investing in its own 3D packaging technology, and investment in 2.5D packaging technology has been stopped. Once the 2.5D packaging factory currently under construction is put into use, no new 2.5D packaging factories will be built.

Even if their own 2.5D packaging capacity is still insufficient in the future, they will still tend to seek foundries from other domestic semiconductor companies rather than invest in and expand their own production capacity.

Zhiyun Group will allocate all its investment funds in advanced packaging to 3D packaging...spending money wisely.

During his inspection, Xu Shenxue also made a special trip to the Zhiyun Microelectronics Factory No. 39 in Ancheng, which is the latest large-scale 3D advanced packaging process factory under the Zhiyun Group and a key factory for producing APO6000 graphics cards.

During the inspection, I learned about the second-generation 3D packaging technology used in the factory.

Subsequently, Xu Shenxue also visited the nearby Zhiyun Microelectronics Factory No. 32, the most technologically advanced and largest logic chip production plant under the Zhiyun Group.

The factory has a designed capacity of 50,000 wafers per month and currently mainly produces chips with an equivalent 5-nanometer process. It is one of only two factories in the Zhuyun Group that can produce logic chips with an equivalent 5-nanometer process... There is another factory located in the Zhuyun Microelectronics Shenzhen base.

Factory No. 32 is not only one of the two main manufacturing plants of Zhiyun Group for equivalent 5-nanometer processes, but also undertakes the research, development, experimentation and manufacturing of equivalent 3-nanometer processes.

Because the factory used state-of-the-art semiconductor equipment from the very beginning... Theoretically, this factory is capable of producing equivalent three-nanometer chips using EUV double exposure technology.

The preliminary technical verification and R&D work for Zhiyun Microelectronics' equivalent 3-nanometer process were also carried out in this factory.

Xu Shenxue came here today to check on the progress of the technical verification of the equivalent three-nanometer process at this factory.

Ding Chengjun, CEO of Zhiyun Microelectronics, accompanied Xu Shenxue and introduced: "The technical specifications of the equivalent three-nanometer process we are currently conducting are very high. The metal linewidth has been reduced to forty-four nanometers, which is six nanometers smaller than the fifty-nanometer metal linewidth of the previous generation equivalent five-nanometer process!"

Metal linewidth is a core indicator for measuring the level of chip manufacturing technology... Taking Zhiyun Microelectronics' various process nodes as an example.
The process node is 78 nanometers.

At 10 nanometers, it is 66 nanometers.

When it reaches seven nanometers, it shrinks significantly to fifty-four nanometers.

The equivalent 5-nanometer process, which began mass production last spring, further reduced the metal linewidth to 50 nanometers.

Now, the equivalent three-nanometer process that Zhiyun Microelectronics is developing aims to reduce the metal linewidth to the level of forty-six nanometers.

The planned equivalent 2-nanometer process aims to shrink to 44 nanometers...

Then, step by step, we'll shrink it to about twenty nanometers in the future... but that's at least ten years from now.

We are still a long way from the physical limits that many people are worried about, where quantum tunneling will occur.

(End of this chapter)