In the mid-80s, Silicon Valley was not as strong as later generations thought, at least in terms of financial data, most semiconductor companies had a loss or a slight range. Most of the U.S. semiconductor companies that existed in this era ceased to exist a few decades later.

Only a handful of semiconductor companies have not only survived the storm, but have also expanded their semiconductor production capacity and processes to unprecedented heights. In the end, the most famous company is Intel, this company before the rise of IOS and Android platforms, basically synonymous with CPU, X86 chips once had the glory that other architecture chips do not have, and very few companies that can obtain X86 chip production authorization are the nobles of the chip industry. Other semiconductor companies that do not have the authorization to produce X86 chips are regarded as non-second-rate companies.

Of course, after the PC fire, IBM regretted opening up PC technology to the outside world and cultivated a bunch of compatible machine manufacturers. After the success of the X86 chip, Intel also regretted licensing the chip patent to more than a dozen companies. Therefore, Intel later resorted to various means to force those companies with X86 patent licenses to withdraw from the competition, or be acquired, or go bankrupt, or transform to completely do not produce X86 chips. After a long period of market elimination, in the end, only AMD not only survived, but also became the only manufacturer in the X86 architecture camp that can compete with Intel.

Compared with Intel, which only has a difficult transition period, Company D has not had a good life for a few years since its establishment, and most of the company's decades-old financial statements are mediocre profits or losses, and there are very few annual reports that can satisfy investors.

From an investment point of view, investing in AMD for decades may not make much profit, but looking at AMD's financial report in horror, and need to pay attention to its news from time to time. Because, with AMD's financial statements, it would not be a surprise to declare bankruptcy at any time. This may also be because AMD is far inferior to Intel in terms of market share, but it is closely behind Intel in terms of technology, and it has paid a huge price.

Historically, in 85 years, Intel suffered huge losses and laid off one-third of its employees. Although AMD during this period did not rely on X86 chips to compete with Intel for food, it also announced the first large-scale layoffs in 86 due to the recession of the semiconductor industry in the United States. And it was in the critical year of 86 that the 386 chip market began to rise, and Intel Corporation survived the difficulties and developed to a new height. AMD, on the other hand, made its first large-scale layoffs in 86 years, and a few years later, it still relied on 386 chips to bring AMD back to profitability. It is precisely because of the start of the 386 chip that AMD began to fall in love with Intel for decades.

At this stage, AMD, although it has the improvement and production authorization of X86 architecture chips, has not yet made up its mind to produce X86 chips.

At this time, Jerry Sanders, the head of AMD, is still worried about the current recession of the semiconductor industry!

In the past few years, AMD's revenue has followed Intel's footsteps and soared to a height of $1 billion. This is also the period when AMD's revenue is closest to Intel's, with Intel's revenue of $1.6 billion in the early 80s, compared to AMD's revenue of $1.1 billion.

It is precisely for this reason that Jerry Sanders once advertised in the media, devaluing semiconductor companies such as Intel, National Semiconductor, Texas Instruments, Fairchild, Motorola, etc. as worthless, and described AMD as the center of Silicon Valley on the poster.

Of course, this ambitious propaganda was soon disgraced by the dumping of the Japanese semiconductor industry.

After the mid-80s, the performance of companies including Intel, AMD, and National Semiconductor all plummeted.

Since then, major companies have begun to abandon the memory business, which had become unprofitable due to dumping by Japanese manufacturers, and reposition themselves in the semiconductor industry.

After William Zhang, CEO of New Venture Electronics, received authorization from the head office, he visited AMD and was ceremoniously entertained by Jerry Sanders. After that, after a tentative exchange, the two quickly got on the right track - the new start-up electronics company entrusted AMD to OEM XRM32 chips!

Jerry Sanders agreed after a little consideration, and quickly convened a board meeting to strongly persuade the majority of shareholders to vote.

……

San Francisco, USA, 19 January 1986.

William Zhang, CEO of New Venture (North America), signed an agreement with AMD, one of the top five chip manufacturing giants in Silicon Valley, for the production of XRM32 chips.

"We have always attached great importance to cooperation with companies in Silicon Valley in the United States, such as AMD, which is a semiconductor manufacturer with very technical strength and scale. William Zhang said, "AMD has the production capacity, which can solve the problem of insufficient production capacity of our XRM32 chips, which leads to a serious shortage of Pangu 2nd generation consoles." We underestimated demand before we launched the product. Fortunately, it can also cooperate with other manufacturers to remedy the problem that consumers cannot buy Pangu 2 in time due to insufficient production capacity. ”

Jerry Sanders, founder and CEO of ADM, was even more provocative: "Our cooperation is more important to prove to the industry that a reduced instruction set is better than a complex instruction set. Companies like Intel and Motorola are obsessed with past achievements and ignore technological developments...... In short, with AMD's production capacity and technical level, it is expected that within three months, the first batch of XRM-based chips produced by AMD will leave the factory. Within half a year, we will be able to supply 1 million XRM32 chips!"

"The chips produced by AMD will give priority to meeting the needs of the North American market......," said William Zhang, "After meeting the needs of North American users, AMD's foundry chips will be used in other markets around the world." ”

"Because AMD's process level is stronger than that of Xinchuang Semiconductor and Lishan Semiconductor, it is basically the world's most advanced semiconductor factory. Therefore, the XRM32 chip we produce will hopefully exceed the original design specifications, including frequency and floating-point arithmetic, which may be a cut above the original manufacturer. "Jerry Sanders took the opportunity to blow his skills.

William Zhang doesn't mind: "The price of the North American version of the XRM chip is more expensive than the supply price of Xinchuang Semiconductor, but despite this, we don't plan to increase the price of the whole machine." The global market is still selling at $698 per unit. In other words, consumers in the U.S. version may benefit from the chips supplied by AMD and get slightly stronger CPU performance than the Pangu 2nd generation in other market versions. ”

If you want your horse to run fast, you need to give your horse the best forage and nutrients.

AMD is a major semiconductor manufacturer with revenues of more than $1 billion. If you want to feed AMD, you naturally need to provide a sky-high order.

The foundry contract provided by the new venture electronics company to AMD is as high as $150 for a single XRM32 chip. Although it is only equivalent to half of the price of 386 chips, in terms of quantity, Xinchuang Electronics has given a minimum of 1 million chips per year, and the contract is valid for 3 years.

That is to say, even if only 1 million pieces are produced, the guaranteed income is as high as 150 million US dollars. Of course, this is only a more pessimistic estimate, according to the current market demand for XRM32 chips, let alone 1 million a year, even if it can produce 10 million, it is also not worrying about sales.

It was AMD, which was supposed to be going to lay off employees, that had torn up the layoff plan. Hell, layoffs, now that the orders are full, the most lacking is skilled workers.

Of course, although the new venture electronics company authorized the production rights of XRM32 architecture chips, it did not allow AMD to improve on this basis. It is also only authorized for the right to produce chips, but not for the improvement and use of the architecture.

This is to prevent AMD from transforming from a foundry into a competitor to a new start-up electronics in the future!

AMD has a R&D level and a process. If the patent rights of the architecture are shared with AMD now, it is estimated that it will not be long before the leading power of technology upgrading will be replaced by AMD.

It is precisely because the process level cannot compete with overseas competitors, so Xinchuang Electronics has to guard against it, and resolutely does not license the core technology to the second manufacturer. It's okay to license the production of specific chips, but if you want to get the right to develop and produce your own chips based on the XRM architecture, sorry, it's impossible!

This kind of thing will not be considered for at least the next ten years!