Text | Bohu Finance, author | Tang Bohu
Now, when domestic companies mention chips, they will attract attention and become the focus, not to mention the Midea Group, which has mass-produced 10 million chips last year, which is amazing.
So today we will understand, why does this home appliance company suddenly introduce its chip plan in a high profile? What are the unspeakable secrets behind it?
The chip road is long
On January 10, Midea announced the news of core manufacturing through the interactive platform of the Shenzhen Stock Exchange: it entered the chip field in the second half of 2018 and has mass-produced about 10 million in 2021.
Midea also said that this year's target is 80 million, and the chip type will be expanded to other home appliance chip categories such as power chips and power supply chips.
(Shenzhen Stock Exchange Interactive Easy Platform Source: Network)
The midea core, compared to Gree is much more low-key, this time ten million chips came out, as if it was a flat thunder, startling everyone: When did midea have the ability to make chips?
On the road of chip development, midea group can be said to be non-stop, and the span is very long, which can be seen from midea's IPM module.
IPM, which can be translated as a smart power module, was first mainly used on inverter air conditioners and can detect faults such as current. At that time, this module mainly relied on foreign imports.
In order to solve the problem of card neck, in 2010, Midea established an IPM project team, developed the first IMS architecture IPM two years later, and established the Chongqing IPM factory in 2014 to start industrialization.
In 2018, Midea Academia Sinica established the IPM Technology Laboratory to carry out IPM business for the whole group. The application of IPM has also extended from air conditioners to refrigerators, washing machines and other fields.
In 2019, Midea announced the realization of the autonomous controllability of the IPM module.
However, on other home appliance chips, such as MCU chips, Midea still relies on foreign procurement - MCU, the abbreviation of Microcontroller Unit, micro-control unit, also known as single-chip or single-chip microcomputer, can be used in rice cookers, microwave ovens and other home appliances, with programmability, can achieve the Internet of Things.
The data shows that China's global share of the MCU market is only 23%, which is far from meeting the domestic home appliance market demand. This is why in December 2018, Midea established Shanghai Meiren Semiconductor and put its efforts on MCU chips.
(Source: Sky Eye Check)
According to the official website, Shanghai Meiren Semiconductor is an integrated circuit design enterprise focusing on the development and sales of industrial semiconductors, and its current products cover four product lines of all categories of home appliance chips, in addition to MCU chips, it also develops power chips, power chips and IoT chips.
In addition to IPM and MCU chips, Midea is also laid out in other chip-related fields.
In 2016, Midea Group companies established the "Midea-Brite (SMIC) Semiconductor Joint Laboratory" with SMIC's Brite Semiconductor to cooperate in IoT chips.
In 2019, Midea Group reached a cooperation with Sanan Optoelectronics and established a third-generation semiconductor laboratory. At the beginning of 2021, Midea Group established Meiken Semiconductor, which includes integrated circuit chips, integrated circuit chips and product sales.
In summary, Midea has explored the chip field through independent research and development on the one hand and strengthening cooperation on the other hand (SMIC, China Resources Microelectronics, Xinen, Sanan Optoelectronics).
However, after the news of the 10 million chips of the United States came out, people in the home appliance industry said that the amount of 10 million is not large in the chip field, far from reaching the break-even line, and the most is to solve the problem of card neck at a critical time.
In addition, Ni Guangnan, an academician of the Chinese Academy of Engineering, also said that there are two points, one is that the current chip industry chain is very long, and it is unrealistic to want full coverage; second, there are many domestic chip design companies, because the threshold is low, and many small companies are also doing it - the difficulty is processing and production.
Knowing that it is so difficult to make a core, why does Midea still rush in with a number of home appliance companies?
Home appliance dilemma and core tide
Combing through the core making process of several head companies in the home appliance industry, it will be found that from about 2015, the core manufacturing of home appliance companies has begun to become a "fashion".
In 2016, Gree disclosed for the first time the development of chips with independent intellectual property rights and established a chip design company. The following year, Dong Mingzhu said that chips would become the focus of the company's efforts. In 2018, Gree plans to invest 50 billion yuan into chip manufacturing in the next three years.
In 2015, Haier established a new company focusing on IoT chips and invested in a number of semiconductor companies.
Then, in 2018, the chairman of TCL said that it had established a semiconductor industry investment fund, paying special attention to the field of AI chips, and invested in SenseTime, which had just been listed.
On the road to core building, beauty is not lonely.
To analyze the origin of this "fashion", it can be summarized into two points, one is because the market demand for home appliances (especially major appliances) has become saturated, especially in 2008, when "home appliances went to the countryside".
(Home appliances going to the countryside Source: Cailian Life Weekly)
In 2008, the world experienced a financial crisis, and home appliance companies had difficulties in exporting. In order to stimulate the economy, the central government has issued a policy of "home appliances going to the countryside" for four consecutive years to expand domestic demand. In 2009 alone, the Central Ministry of Finance issued 7.54 billion yuan in subsidies, facilitating a transaction of 64.7 billion yuan.
The demand amplified in advance, the result is that in the following years, the demand for domestic home appliances has experienced negative growth and inventory pressure.
Relevant data show that in 2014, China's domestic sales market for home appliances was sluggish, and the sales of refrigerators and washing machines fell by 10.4% and 4.9% year-on-year. Inventory occupation is also high, especially the inventory form of household refrigeration and major appliance accessories is not optimistic, and the capital occupation of both finished products has reached a historical high.
Under the pressure of sluggish demand for home appliances, "seeking change" is the best way out for home appliance companies. It just so happens that at this time, a new outlet has emerged, which is the second driving force behind the core-making tide: smart homes.
Advocating the theory of "outlet", Lei Jun stepped into the track of smart home with Xiaomi in 2014, and Haier proposed the dual wisdom strategy of "smart home + intelligent manufacturing" in 2015.
After the domestic home appliance market is gradually saturated, to re-awaken the desire to buy, you can only rely on the update brought by the smart home this time. Chips are an indispensable part of the realization of smart homes, and many home appliance companies have entered.
However, for home appliance companies, their position in smart homes is not dominant.
The three elements of smart home: chips, systems and entrances, home appliance companies only focus on chip research and development. But the chip can only complete the intelligence of the single body, and to complete the intelligent ecology, it also needs the operating system and entrance.
Using the analogy of needlework, the chip allows the ecological object to have a sewable "hole", the operating system is equivalent to a thread, and the entrance of a mobile phone and computer is equivalent to a needle. Only these three can be connected in series to complete the closed loop of ecology.
However, this "needle" and "line" is the weakness of home appliance companies, because major appliance companies either do not involve mobile phones, computers, televisions and other consumer electronics (such as the United States), or just like Gree, made mobile phones, selling thousands of units a year, which cannot form a scale at all.
Therefore, we can see that the cooperation between TCL, Midea and other home appliance companies and Xiaomi has made themselves the object of needlework.
The good news is that last year, Huawei's self-developed Hongmeng operating system has been donated, and home appliance companies can directly move over to use it. In October last year, Midea did move over and successfully released Midea's IoT operating system 1.0, the first distributed operating system in the smart home industry based on OpenHarmony 2.0.
Here there is a familiar taste: the Android system developed by Google was opened for free and quickly occupied the global market, but because it needed other Google patents to use the Android system, it was still necessary to pay Google.
Home appliance companies and these Internet companies are obviously not in the same position.
In the footsteps of Huawei
Compared with the past tense of 10 million chips and smart homes, how Midea deals with the relationship with cars is obviously more in line with the current theme.
Midea did not miss the opportunity of new energy vehicles, but instead of building cars, it took a similar path to Huawei: making parts.
A number of media reported that Midea has announced that it can achieve mass production of automotive chips in 2024, and the first application is the new energy vehicle water pump.
The story of auto parts is also worth savoring. At the beginning of the new century, after China's accession to the WTO, the automotive industry flourished. Then, Midea spent 1.7 billion yuan to buy and set up Sanxiang Bus Company to do the chassis business of large and medium-sized buses. However, it did not play well later, and eventually 60 million was transferred to BYD.
Four years ago, Midea Group established Welling Auto Parts Company, which is a restart of the parts business more than ten years ago. Recently, on January 12, Midea Group registered 200 million yuan and established Anqing Welling Auto Parts Co., Ltd.
Some media learned from the relevant responsible persons of the United States that in addition to the establishment of a new parts company, midea will also build a new production base.
Chen Jintao, general manager of Welling Auto Parts Company, said a few days ago that Midea's new energy vehicles have come to the inflection point of take-off, and this year will break into the supply chain of half of the world's mainstream new energy vehicle customers, and sales will usher in a big outbreak.
An executive of a traditional home appliance company that was once low-key now has a strong smell of Huawei's yu big mouth, which may be the charm of car building.
However, compared with Huawei, Midea does not seem to be vain, because according to a research report released by patent database provider IFI Claims on January 13, midea surpassed Huawei in the global ranking of patents.
One thing that needs to be noted is that the Midea auto parts business is a plan for the next ten years, whether it will repeat the mistakes of the past, it is yet to be tested by time, and it is still a hilarity.
In the latest first three quarters of 2021, Midea's revenue was 261.3 billion yuan, super Haier nearly 100 billion, and super Gree 120 billion, and Midea is still the first major appliance company in the domestic market.
However, compared with the high profits of Gree "mastering the core technology", Haier's profit growth rate in high-end and global layout, Midea's layout in these aspects is late, and now Midea relies on categories, scale, and acquisitions, and the story is much worse.
(2021Q3 financial report Source: Hexun Network)
In summary, the layout of home appliance companies in the chip field is aimed at smart homes, and in the case of the gradual saturation of domestic home appliances, this is the only point that can stimulate the consumer demand for home appliances.
However, no matter how the development of smart homes last is, the relationship between home appliance companies and Internet companies must be unequal, and the right to speak will eventually be reflected in the distribution of income and profits.
The above is the situation of the United States in which it is located, but now in addition to the layout of smart homes, the United States has also begun to develop chips in the field of automobiles, which can greatly enhance the story of the United States.
The outcome of these forward-looking strategic layouts is unknown, and the threat to the United States is not visible now.
As He Xiangjian, the founder of Midea, said: "If there is a crisis in Midea one day, it will definitely not be competitors who will crush us." The real reason is that Midea has made major strategic mistakes. I'd rather take two steps slower than take a wrong step. ”
Is that beauty going fast? Can beauty get up from where she fell in the past?
Resources:
Zhiyan Consulting: Analysis of the development status of the mainland home appliance market in 2015 and outlook for 2015