The association that was "scolded" and decided to make a chip?

Wen | Pai Finance, the author is | Chen Qingzhi, and the editor is | Pai Gongzi

Regarding making chips, Lenovo was finally "scolded" to wake up.

On January 26, 100% controlled by Lenovo, named Dingdao Zhixin (Shanghai) Semiconductor Co., Ltd. was officially established. According to the registration information, Dingdao Zhixin is a wholly owned foreign-invested enterprise with a total registered capital of 300 million yuan, and its business scope includes the design and sales of integrated circuits, as well as a number of businesses in the field of semiconductor technology. The legal representative is Jia Zhaohui, Senior Vice President of Lenovo Group and General Manager of IDG Consumer Business & Leading Innovation Center.

In fact, less than 3 years ago, Yang Yuanqing also vowed that Lenovo did not need to make chips or operating systems, and should be satisfied with its own role. But perhaps because of the surging public opinion, or perhaps because of the folding of the science and technology innovation board, and the recent hard-core confrontation of Sima Nan, in the end, Lenovo made this decision.

From 1994 to 2022, Lenovo spent 28 years to regain the chip business, during which Lenovo went through "reputation" and "slander", and the benchmark of technology companies in that year has long been pulled off the altar by the "one-day trip" of the science and technology innovation board, and Liu Chuanzhi and Yang Yuanqing have also been repeatedly attacked by public opinion.

After 28 years of hesitation, can Lenovo still make waves in the chip field?

01 28 years late

Lenovo's chip is actually not new.

As early as 1988, Lenovo, which was still in the early stage of entrepreneurship, had been involved in chip research and development, but at that time, Lenovo chips did not perceive the application prospects of chips, and most of the energy was still focused on Hanka and later the computer business. Ni Guangnan, then chief engineer of Lenovo, said in a later interview that in 1988, Lenovo began experimental trial production, and finally proved that at least it could do the design of integrated circuits, and it was very successful, and the rate of return was also very large.

However, later things did not develop in the direction of Ni Guangnan's vision, and even Lenovo began to deviate from its expected development track, and all this began in 1992.

That year, Ni Guangnan's Lenovo laser printer project was supported by then-president Liu Chuanzhi, and Sun Zuxi, Xu Fei, Liu Hong, and others of Beijing Lenovo R&D began to develop the ASIC chip LXCG9000 for lenovo Chinese character laser printers. It was also from this laser printer that Lenovo developed in competition with large foreign companies such as HP, and later became the first brand of laser printers in China.

In 1993, Academician Ni Guangnan proposed the establishment of an ASIC design center based on lenovo's experience in applying the economic and technical advantages of its own as-applied ASIC in various products. To this end, he has repeatedly gone abroad to investigate the operation and management experience of IC design enterprises abroad.

In order to be able to do the chip business, Ni Guangnan began to run around and actively look for partners. In April 1994, Lenovo, Shanghai Fudan University and Shanghai Yangtze River Group signed a letter of intent for cooperation in "Lianhai Microelectronics Design Center". Chen Zhili, then vice mayor of Shanghai, personally received the responsible persons of the three parties and expressed the full support of Shanghai.

But Ni Guangnan's optimism and shanghai support were unexpectedly met with a cold face by Liu Chuanzhi, and just as the Joint Design Center was ready, Liu Chuanzhi's attitude changed 180 degrees. In June of that year, Liu Chuanzhi suddenly wrote a famous "200-word note" to Ni Guangnan and another lenovo leader. In the note, Liu Chuanzhi first affirmed that "the establishment of a design chip center should be actively promoted when conditions are available", but also raised questions:

The first is "to have a sales market" and think that "because we sell our own boards, this has";

The second is "to be able to introduce the most advanced technology", he believes that "at present there is no certainty";

The third is "to have a competent management and management form", he believes that "this article, at present, there is no more feasible direction to solve";

The fourth is "financially qualified and high-level developers", which he believes is "possible after hard work".

In short, Liu Chuanzhi believes that "the current conditions are not yet in place, especially article 3" and "I personally disagree with hasty joint ventures". But Ni Guangnan, who was not convinced, thought that the problem of money made Liu Chuanzhi suspicious, so he decided to try again.

In August 1994, Ni Guangnan served as the technical team leader of the "Multimedia Technology" National Technology Development Project of the State Economic and Trade Commission, and applied for the "Multimedia Chip and Board Product Technology" project for Lenovo, which received 11 million yuan of scientific research fees and tens of millions of yuan of loan support from the State Economic and Trade Commission. Ni Guangnan is very happy, he believes that lenovo can establish an ASIC design center without even having money, and there should be no risk.

However, at the end of the year, when Ni Guangnan twice presented the contract agreed upon by the three parties to Liu Chuanzhi, Liu Chuanzhi did not say anything, and he dragged the cooperation out, and the "Lianhai Microelectronics Design Center" was finally helpless.

Now, the abortion of this project is not due to the chip research and development itself, but due to the fledgling Liu Ni controversy, and Liu Chuanzhi's only dissatisfaction is Ni Guangnan himself, not the chip project. At that time, Lenovo, which had already survived the sales crisis in 1993, actually had enough strength and reason to do this business.

Also encountering this dilemma was the successful switch project at the time.

In November 1994, Liu Chuanzhi initially approved the loan application plan of Wanmen Machine, but at the critical moment of fundraising, he called Ni Guangnan's apprentice and person in charge Luo Zheng: "Don't do what you raise funds, I have other considerations." In a word, the program control department's plan to operate independently into a subsidiary was aborted. Although, they only need 5% of the microcomputer department led by Yang Yuanqing.

On June 30 of the following year, at lenovo's board meeting, Liu Chuanzhi choked up several times and read out the board's decision to remove Ni Guangnan from all positions. It was also from this time that the dispute over Lenovo's route was settled, and "trade and industry technology" officially replaced the previous "technology industry and trade", in 1998, Liu Chuanzhi published an article titled "Trade, Industry and Technology Triple Jump" in Computerworld, which raised "trade industry technology" to the strategic height of Lenovo.

Lenovo's first attempt at chip self-development ended with the end of the Liu Ni controversy.

02 Weak Yang Yuanqing

"After I've been in prison for four years, what do I want to do when I'm about to come out?" Everyone knows that Zhongguancun at that time, including Lenovo, mainly did porting work, that is, loading up the imported and then selling it to others, basically there was no technical content, but..."

In February 2018, Sun Hongbin, the founder of Sunac, participated in a roundtable dialogue at the 18th Yabuli Forum, and when he talked about why he chose to do real estate, he inadvertently "accidentally injured" Lenovo, and coincidentally, Liu Chuanzhi was sitting under the stage at that time, and the two sides felt embarrassed for a while.

But if you look closely, Liu Chuanzhi's embarrassment may be even worse, after all, Sun Hongbin is from an association and what he said is true.

The source of this embarrassment is precisely that Lenovo really does not have any core technology. When the liu ni dispute ended, out of inertia, Lenovo Group clearly proposed in the "1995 Development Plan" to "build a dedicated chip, ASIC development and design center", so that Lenovo Group in the field of chip design to reach the world's advanced level, and drive the development of the domestic IC industry.

But this plan only stays in the planning stage, after Ni Guangnan withdrew, everything in Lenovo has changed. After Ni Guangnan left, Lenovo removed the position of "chief engineer", declaring that this was "a product of the former Soviet system" and would be permanently abolished. For years afterward, Lenovo did not have a senior leader in R&D, such as a CTO.

All the personnel of the original R&D center were delegated to the R&D department of the business department and led by the general manager of the business department. From 1996 to 1997, Lenovo announced that Xu Zhiping would lead the technology center, and soon after the dissolution of the technology center, Lenovo's research and development has mainly been for the sales market. Lenovo pays more attention to the integration of markets and marketing channels to achieve the backbone of lenovo's technology research and development in the early stages.

The guiding ideology of Association at this stage is: "Take trade as a breakthrough to achieve the three-level jump of technology, industry and trade." But in fact, until Liu Chuanzhi retired, Lenovo did not make much breakthrough in "technology", "trade and industry technology" for seven years, in addition to clearing the program-controlled switch and other "technology", the biggest achievement is to invest 1.2 billion yuan to build "Daya Bay Asia's largest board card production base", this site selection of the wrong "work" was just completed and was stripped.

Later, when recalling this period in 2005, Ni Guangnan bluntly said that due to the delay of about 7 years caused by the shift to "trade and industry technology", the loss of scientific and technological backbone, and insufficient technology accumulation, it was difficult to provide Lenovo with new profit growth points in the short term. At that time, shortly after Yang Yuanqing, the new head of Lenovo Group, took office, Ni Guangnan believed that Yang Yuanqing could bring new changes to Lenovo's "technology".

In 2002, Yang Yuanqing, who was the CEO of Lenovo Group for the first time, understood the technical weakness of Lenovo Group, and immediately after taking power, he put forward the slogan of "Lenovo of technology, lenovo of service, and lenovo of internationalization", in an effort to eliminate the influence of "trade and industry technology".

But the change that Ni Guangnan hoped for did not come, because Yang Yuanqing was too obedient to break through the box drawn by Liu Chuanzhi. In Liu Chuanzhi's talent echelon ranking table, in front of Yang Yuanqing is Sun Hongbin, who is open and vigorous, and then there is Guo Wei of Shenzhou Digital. But the advantage of Yang Yuanqing is that for Liu Chuanzhi, he will unreservedly contribute his loyalty. Even if there is some doubt in the heart, it is not moved.

Hong Rongshun, CEO of Eden.com, once commented on Lenovo's three young people: in terms of professional ability, sun Hongbin, Guo Wei, and Yang Yuanqing, and in terms of loyalty, it is Yang, Guo, and Sun. In Liu Chuanzhi's most dangerous moment, Yang Yuanqing won Liu's trust with his own business escort and became "part of life" in Liu's mouth.

That is to say, the biggest reason why Yang Yuanqing can become a successor is actually that he is obedient enough, and perfectly inherits and implements Liu Chuanzhi's previous "trade and industry" route, even if he wants to make a breakthrough in technology, he only becomes a more technical assembly plant in the category of "trade and industry".

An obvious example is the chip, when someone asked Liu Chuanzhi in 2018 why he did not dare to invest in chips, Liu Chuanzhi replied: "It is because the private enterprises at that time were not rich enough, and it took several years to see the return after investing in chips, and it is very likely that they will be wrong." "When a company's annual profit is only 1 billion yuan, you let it use $2 billion a year to make chips, and you don't have the courage to do so."

He also said that until 2001, Lenovo Group's total revenue was only 19.2 billion Hong Kong dollars, and the net profit was less than 1.026 billion Hong Kong dollars, "If you want to take out the annual profit, it is possible to invest one-sixteenth of a production line, I believe that as long as the entrepreneurs who are not losers will not do this, this is not patriotic but a disaster for the country." ”

In fact, this reflects the other side of Liu Chuanzhi's personality, in an interview with the media, Liu Chuanzhi once said: "I and Ren Zhengfei have a different personality", in the technical attack, "he dares to go up", and he can't do it.

Such a personality has also been inherited from Yang Yuanqing, whether it is the successful acquisition of IBM computer business, or the acquisition of Motorola in 2012, and the subsequent failure in the mobile phone business, it can be seen that Lenovo only wants to expand the scale of operation, without touching the lower technical problems, which naturally leads to insufficient product competitiveness. In 2017, Lenovo proposed to transform to cloud devices and solutions to create one-stop IT solutions, but the proportion of revenue has been very low.

Yuan Bo, a senior researcher at the Institute of Understanding, said, "There is no problem with the trade and industry technology route, but to trade first and then technology, Lenovo is unwilling to invest in technology to do forward-looking industries after making money, research and development investment is too low, the company wants to make fast money, only wants to be big in the PC industry, and gradually becomes a mediocre company." ”

It is also true that Lenovo has failed to achieve significant results in several attempts to transform in the past for a long time, and to this day, the personal computer business has always accounted for more than 90%.

Is it possible to also? Of course not, this can be glimpsed from Yang Yuanqing's attitude in the chip business, in an interview in 2019, Yang Yuanqing said that believing that globalization is an inevitable trend, a company does not have to do all things, so Lenovo does not intend to do operating systems and chips, will do its role, cooperate with trusted partners, and provide users with the best products.

Although Lenovo spent about 90 billion yuan on purchasing processors and chips in 2020, about 60 billion yuan on memory and memory, and less than 10 billion yuan in net profit, this still did not awaken Yang Yuanqing and Lenovo's determination to make chips.

03 Lenovo got the hang of it?

Yang Yuanqing's attitude change is in 2021, at a financial quarterly communication conference, Yang Yuanqing said that the possibility of self-developed chips is not ruled out, nor the possibility of cooperation. Yang Yuanqing not only indicated that in the next three years, Lenovo's research and development investment will double, but also prepares to develop its own chips.

This is a fairly positive signal, and in November shortly after this statement, Lenovo released a new product, the LA2 intelligent embedded controller, which official public information shows can "enable laptops to optimize performance in real time and intelligent input and output control." Later, after an insider revealed, LA2 is indeed an AI chip.

So hidden, I don't know whether Lenovo's lack of confidence in its scientific research ability, or the jealousy of public opinion, but the outside world is more willing to interpret this as the former, after all, its black technology overturning cases are not in the minority, and there is also the disgraceful experience of the science and technology board day trip.

In fact, for the layout of the chip field, Lenovo already has a good layout. According to the data, since the establishment of Lenovo, its three major investment companies, Lenovo Venture Capital, Lenovo Star and Legend Capital, have invested in 23 chip companies in the industry, with a wide range of chip types, including AI, mobile phones, automatic driving, IoT, 5G and so on.

Looking at the talent, according to the data that has been released so far, Lenovo's research and development team has reached 13,900 people, an increase of 51% compared with last year. Not long ago, Yang Yuanqing also launched the "Global Large-scale Hardcore Science and Technology Talent Recruitment Plan": in the next three years, Lenovo Group will recruit 12,000 scientific and technological talents for the society and universities on a large scale around the world. According to this plan, after two years, the number of Lenovo's scientific research team will reach about 26,000 people, but I don't know what the proportion of chip technicians is.

Unlike the obscurity of the LA2 intelligent embedded controller chip, Lenovo chose a high-profile disclosure this time, and it is reported that the company will focus on the research and development of tablet and PC processor chips. This is also the advantage of Lenovo, according to IDC data, Lenovo Group shipped 81.93 million PCs in 2021, with a market share of 23.5%, once again winning the 2021 global PC championship. Canalys data shows that in the third quarter of 2021, Lenovo shipped 4.279 million tablets, with a market share of 11.3%, ranking third in the world.

That is to say, if Lenovo successfully develops a chip, only its own products will be enough to feed the chip team, which is also the key to HiSilicon, which was founded in 2004 until 2011 to achieve breakeven, but still be able to stick to the dawn. What's more, the current industrial environment and talents have long been different, and Lenovo's chip research and development resistance will also be reduced a lot.

There are also views that in view of the closed nature of the x86 architecture, Lenovo should develop tablets and PC processors based on the Arm architecture if it develops tablets and PC processors. However, at present, there are many such processors in the market, and the competition is also fierce, and it is also facing the suppression of the X86 processor in the ecological advantage, so it is not easy for Lenovo to make a breakthrough in this field.

However, at present, the capital and time cost of high-performance CPU research and development, with Lenovo's current strength, it is still difficult to achieve a breakthrough, but chips such as screen power management are also a good choice. High-quality OLED and mini LED screen is the future of high-end notebook two important development directions, mini LED screen has hundreds of small lamp beads, in order to save power need to efficiently manage small lamp beads, which requires an intelligent power management chip.

From this perspective alone, Lenovo may start with chips such as relatively less difficult power management, and then seek breakthroughs in core chip products such as CPUs.

However, from 1994 to the present, Lenovo has given up the program-controlled switch and chip research and development for up to 28 years, the core scientific research team has already experienced many changes, Lenovo research and development has how much research ability, how long to persist under the huge loss, is Lenovo has to consider the problem. It should be known that within 15 years, Huawei HiSilicon has invested up to 200 billion yuan in the chip field alone.

Unfortunately, Lenovo seems to be a company without a long-term strategy. "It's like Yang Yuanqing pulling the trigger in front of him and firing a shot at a wall far away, and the people below came forward to find the bullet hole, drew a circle, and said that this was our strategy." But after a year or two, perhaps Yang Yuanqing found that he did not aim last time, pulled the trigger again, and changed his new strategy. Lenovo's former executives described Yang Yuanqing this way.

In fact, whether it is the transition from PC to mobile devices or the "three-wave strategy" proposed in 2016, Lenovo's long-term planning lacks corresponding determination, and the style of turning when it encounters setbacks has not changed completely. A former Lenovo executive who has worked around Yang Yuanqing for nearly a decade has said that Lenovo has been KPIs and short-term performance-oriented, and has not adhered to the established long-term strategy and continued to invest in product research and development like Huawei.

This time, how long can Lenovo make a chip? It is currently unknown. But what is certain is that if there is no upward concentration, Lenovo will once again be as Ni Guangnan said, "It has passed by a lot, then you will not be able to come back." ”

Hopefully, the association that has repeatedly missed the opportunity can really persist this time.