Rekindle 2003

Chapter 820 Business Cycle (4)

"Don't underestimate this game console that can only make you lose your ambition."

As the dean of the School of Economics, Shi Guangyong's insight into the market and understanding of economic phenomena far exceed that of ordinary people.

However, even he couldn't help feeling a little surprised when he heard Qing Yun link game consoles with the development of the semiconductor industry.

In his traditional concept, game consoles are more of a part of family entertainment consumption, and seem to have nothing to do with scientific research and industrial development.

"Game consoles, which many people consider to be just a tool for entertainment, actually play an extremely important role in the development of computer hardware."

Qing Yun continued, “Games have extremely high requirements for computer graphics processing capabilities, which directly promoted the development of graphics processing units (GPUs).

The development of GPU, in turn, provides games with more powerful graphics rendering capabilities, making the game screen more realistic and the experience richer.

Not only that, the game has extremely high requirements for the computer's computing speed, memory capacity, storage speed, etc.

This has prompted computer hardware manufacturers to continuously innovate technology and launch hardware products with stronger performance and faster speed. It can be said that games have promoted the development of computer hardware to a great extent.

In 1977, Atari-2600 was launched, as shown in the picture you see now. It caused a sensation and is considered to be the first true home game console system in history. By the time it was discontinued in 1992, a total of 3000 million units had been sold.

The reason why game consoles have been able to develop rapidly as a separate type of computer for a long time is due to people's love of playing and the increasingly interesting and interactive gaming experience.

Due to the large-scale sales of game consoles, there was a huge demand for chips, and game software gradually became the application with the greatest driving effect on chip sales at that time.

In 1977, Commodore, Apple and Tandy all released their own commercial personal computers, and the personal computer era began to arrive on a large scale. As shown in the figure below, from left to right are Commodore PET 2001, Apple II and Tandy/RadioShack TRS-80 Model 1. Among them, Apple II was the most successful, with 1993 million units sold by the time it was discontinued in 400.

However, the standard for personal computers in the modern sense was actually laid by Abbeym.

It launched the Abbeym 1981 personal computer (commonly known as Abbeym PC) in 5150. Its operating system was Microsoft Basic developed by Microsoft. Although it lagged behind the above three companies in time, its sales far exceeded Abbeym's expectations due to its excellent design.

Over 1983 PCs were sold in 75 alone, and the desktop almost immediately became the primary target for most microcomputer software development.

In 1984, Apple's revenue from the PC market reached $40 billion, more than twice that of Apple.

A 1985 Fortune magazine survey found that 56% of American companies with personal computers used PCs, while 16% used Apple. PC has become synonymous with personal computers today.

“Fourth, application software that meets consumer needs has not only created a huge market, but also greatly promoted the development of hardware technology and the prosperity of the operating system ecosystem.

After 1985, after developing the BASIC operating system for Apple, Microsoft also launched the graphical operating system Microsoft Windows, following Apple, and launched Microsoft Office in 1990, and quickly captured about 90% of the global office market share.

Office can be said to be a landmark product in the history of world software, and it has been thriving for decades. It is also one of the two most iconic software products of Microsoft, alongside Windows. By 2022, Microsoft's cumulative revenue from OFFICE software will reach hundreds of billions of dollars.

Not only office applications like Office, Microsoft also realizes that the competition in operating systems actually depends more on whether the upper-level application software ecosystem is prosperous.

In addition to rigid office needs, leisure and entertainment demands represented by games are the most vigorous, so Microsoft began to make great efforts to optimize the gaming performance of Windows.

When Windows 1995 was released in 95, the introduction of game performance and new development tools became the highlight of the press conference. Bill Gates appeared directly on the system screen to explain it in person, which was enough to show how much he valued games. Since then, more and more games have been running on Windows.

At the same time, Microsoft developed the IE browser on the application side to meet users' needs for surfing the Internet.
Multimedia is also a huge demand. People want to listen to music and play videos on their computers, and Microsoft has also developed related applications.

Downstream application software such as office, games, multimedia, and Internet access have greatly met the needs of enterprises and individual consumers.

The emphasis on these application software and the prosperity of the software ecosystem have made Microsoft's Windows the dominant operating system in the market for a long time, and have also made the PC's share far exceed that of other personal computers, becoming synonymous with personal computers.

Moreover, the continuous development of software applications has in turn promoted the improvement of hardware performance. Software such as games, editing, graphics processing, 3D modeling, etc., which have extremely high requirements on chip computing power, have directly promoted the development of independent graphics cards. "

Emperor Yun is increasingly finding the same ease and freedom he had on the podium in his previous life.

He wrote another word on the whiteboard:

Market demand and technological progress.

"Today, we are sitting here to discuss how to build the world's second ICT technology (Note: Information and Communication Technology) foundation after America, including chips, operating systems, and basic software.

But I think America's history of technological innovation is worth learning from.

That is to focus on the discovery and creation of downstream market demand and establish a business cycle from technology supply to market demand.

The reason why my country's scientific and technological innovation has made tremendous progress after the reform and opening up is actually related to the release of downstream demand and the gradual establishment of a business cycle.

The establishment of this business cycle can greatly mobilize the enthusiasm of upstream scientific and technological innovation links, including capital investment and high-level talents entering the industry, and feed back to the military and defense fields.

In the early days of reform and opening up, my country's national income level was very low and the domestic market's consumption capacity was limited.

At that time, the European, American and Japanese markets were huge in scale and had strong consumption capacity. Therefore, my country established export-oriented industries and exported a large number of products to the vast European and American markets. This not only expanded the export volume but also achieved product repricing.

Because these markets have greater purchasing power, the same products can be sold at higher prices.

1999年时，我们的出口总额是1949亿美元，而去年这个数字是3256亿，今年1-8月是2988亿，全年突破4000亿美元实现对1999年翻翻是完全没问题的。

The profits generated by these exports can feed back into the development of domestic industries. This is a business cycle.

Just like what I am doing now, I use various products to continuously make money in the market, and then invest in software development and hardware development.

You have also seen the software. Because of tax software and industry software, my computers sell better, my gross profit is very high, and I can continue to spend money to maintain research and development.

I don’t see any effect from hardware in the short term, but once I crack one, my gross profit will be higher.

I can actively start a price war and expand my market share, not only in China, but also abroad. Don't think this is impossible. I admit that my initial products were all low-end products that looked unremarkable.

but!

Dear seniors, outside our borders there are not only Europe and America, not only Silla, Sakura, Singapore, or the Four Asian Dragons.

In Africa! In Latin America! In South Asia! On the carcass of the old bear, there are billions of silent people!

They need low end products!
I can make money from them and then invest more resources into my research and development, giving me a greater advantage.

As for technological progress, as software becomes increasingly rich, hardware will be required to have larger memory to store data and stronger parallel processing capabilities, which requires that chip performance and technology must be higher, which is also a cycle.

......"

Qing Yun concluded, "In short, these are some of my thoughts on the development of the semiconductor industry from a business perspective.
On the one hand, there are investments, including funds, high-level manpower, etc.;

On the one hand, it is to constantly discover market demand, explore demand and create demand. Once the demand comes out, it can form a huge profit driving force, fully mobilize the enthusiasm of various institutions and individuals, and greatly promote scientific and technological progress and innovation.

Compared with the former, the latter can be said to be equally important, and sometimes even more important.

Because the existence of demand is the driving force for people to do something. Sima Qian once said, "The world is bustling, all for profit. The world is bustling, all for profit." In fact, the same is true for technological innovation.

Qing Yun's speech came to an end. The conference room was silent, and everyone seemed to be digesting his words.

Li Guangnan, Huang Lingyi, Xu Duanyi, Wang Shouwu, Wang Yangyuan, Xu Juyan, Zou Shichang, Yan Xiaolang and other bigwigs in the semiconductor industry had different expressions on their faces, some were in deep thought, some were surprised, and some looked thoughtful.

……

Li Guangnan broke the silence, his voice was a little hoarse, but more serious.
"Xiaoqing, your words are very insightful and inspiring. We who are engaged in scientific research sometimes focus too much on the technology itself and ignore the importance of market demand."

He also spoke from his heart.

In fact, among all the people present, he was the only one who had some understanding of the market because he had served as the chief engineer of Fantasy Group.

After listening to the speech of this cheap disciple, combined with the reflection on the consecutive failures of Fang Zhou and Yongzhong, Li Guangnan actually felt that he had taken the wrong route at the beginning.

Huang Lingyi also nodded and said, "Qingyun, you have made us old bones re-examine the development of the semiconductor industry. Indeed, technology without market demand is like water without roots, and it is difficult to sustain."

She and Hu Weiwu developed the Loongson chip, which was something to be very proud of. However, the subsequent development made her confused.

The country has no interest in Loongson at all.

Huang Lingyi previously believed that the Loongson was not good enough. Compared with the Hanxin chip that shone brightly as soon as it was launched, the Loongson chip, nicknamed "Dog Leftovers", was indeed a bit inferior.

Huang Lingyi felt that this was a problem with their level.

Especially the words Qing Yun passed on to her through the organization, saying that she and Hu Weiwu did not understand business and were wasting things, which made her so angry that she could not sleep for several nights.

However, after listening to Qing Yun's words, Huang Lingyi found that this cheap disciple was indeed right.

They only know scientific research and know nothing about the market.

According to Qingyun, they didn't go to the market at all.

But chip research and development is a commercial activity.

No wonder...

Academician Wang Yangyuan smiled slightly, with a hint of amusement in his eyes, "Xiaoqing, you are teaching us a lesson.

However, this lesson was well taught and timely!
We really need to think about the development of the semiconductor industry from a broader perspective.”

Wang Shouwu had a complicated expression. He looked at Qingyun and said with some emotion, "Xiaoqing, your idea is very bold and forward-looking."

He was convinced.

This guy is indeed qualified to take the lead in drafting this programmatic document.

and……

This kid is only 18 years old!
He is Chaoyang!

Thinking of this, Wang Shouwu laughed out loud, "We old guys are getting old, and this industry really needs fresh blood like you to promote the development of the industry."

Qing Yun cleared his throat, his eyes revealing a hint of determination, "I firmly believe that only by truly understanding market demand can we truly promote technological progress.

We cannot just limit ourselves to the technology at hand, but should look to the future to explore and create greater market demand.

I know this is a long and challenging process.

But I believe that as long as we unite as one and forge ahead courageously, we will be able to overcome all difficulties and realize the rise of China's semiconductor industry.

Dear seniors, the future... has arrived."

……

(End of this chapter)