The same is true for other established chip companies. Although they have completed technological upgrades and can produce more advanced chips, they are still mature in the old technology.

New companies entering this field are not as good as established companies in terms of technology, experience, management, and cost control. The products they produce are not competitive enough. In addition, they are new brands and are not recognized by the market. It will be much more difficult to survive.

.

This is also a common feature of the manufacturing industry. A manufacturing industry that upgrades from the low-end step by step has more advantages than one that is imported halfway.

It's like playing a game. Player A trains his account from scratch, grinds dungeons to get a good set of equipment, and slowly upgrades from bronze to diamond. Player B directly buys a diamond account equipped with good equipment, and you let two people PK.

, the high probability is that player A will win.

From a market perspective, it is indeed better to buy automotive chips than to make them. Even if you spend a lot of money to produce automotive chips, you may not be able to gain a competitive advantage. Li Weidong certainly understands this.

But from the perspective of supply chain security, achieving independent production of automotive chips is something that must be done.

Leaving aside the fact that there will be a supply shortage of automobile chips in the future, which will lead to a sharp reduction in global automobile production, the rapid development of China's new energy vehicles requires an independent supply chain for automotive chips.

If new energy vehicles only replace traditional fuel vehicles, it may not matter whether there is an independent automotive chip supply chain.

But cars have begun to develop towards intelligence. In the future, when the Internet and new energy vehicles are more and more closely connected, and when autonomous driving gradually becomes popular, a certain country will definitely be unable to sit still and wield sanctions against China's automobile industry.

, it is not unreasonable to worry.

…

In the past few years, the country has been implementing a plan to send home appliances to the countryside. In 2010, the policy of sending home appliances to the countryside stimulated a consumption of 300 billion yuan in the home appliance industry, and by 2011, this number exceeded 400 billion.

This has also made major home appliance companies make a lot of money. For example, Haier's sales exceeded 50 billion in 2010. Other companies such as Gree, Hisense, Midea and other companies also made a lot of money.

Puppy Electric is also a beneficiary of the policy. Although Puppy Electric does not produce major appliances, the sales of various kitchen appliances are still quite good. No one should be equipped with a microwave oven!

However, after entering 2012, subsidies for home appliances going to the countryside began to decrease, which was also bad news for home appliance companies.

However, in the next few years, the entire home appliance industry has not been affected. Instead, sales have increased significantly, which has also benefited from the rapid development of the real estate market.

At that time, houses were mainly bought by people with immediate needs. Since the house was bought to live in, it must be equipped with various household appliances, such as TVs, refrigerators, washing machines, air conditioners, etc., which are indispensable, especially air conditioners.

One must be installed in each room, and several air conditioners must be purchased for each apartment. Sales volume has also increased. Gree's financial reports in those years were also particularly impressive.

The consumer market has always been growing, so for the home appliance industry, the biggest hidden danger comes from cost.

At Puppy Group, Wang Jiuyang was holding financial statements and complaining to Li Weidong about the rising costs.

"In the past two years, our labor costs have increased a lot. Wage growth is one aspect, and the most important thing is social security and medical insurance expenditures. According to this year's social security base, our factory will increase costs by more than one billion a year.

"Wang Jiuyang said.

Li Weidong sighed helplessly: "It is an enterprise's obligation to pay social security to workers. In the past, laws and regulations were not perfect, and policy implementation was not strict. Now it is just implemented in accordance with the regulations."

"Of course I understand, but the social security base will definitely grow. This year it is more than one billion, and it may be several billion in three to five years. This is too big a burden for us. Especially in the factory, our several generations

The factory employs a total of more than 200,000 workers, and they all pay social security and medical insurance, which is really a huge burden."

Wang Jiuyang continued: "What's even worse is that we pay social security to the workers, which increases their own burden, and the workers still have a rebellious mood. Because this social security also has to deduct part of the workers' wages, the result is that the workers get more money than

It turns out that there are fewer workers, and many workers are unwilling to do so.

Some workers simply say, I don’t want social security, you can pay me the social security money directly. In that case, the workers will get more money, and we can save costs, but it violates the policy, which is really a dilemma!”

"There is no dilemma. National policies and regulations must be implemented!" Li Weidong continued: "The workers recruited in our factory are basically from rural areas. Farmers have not enjoyed pensions, so naturally they cannot realize the benefits of social security. They value it more.

immediate benefits.

Moreover, you have to pay for social security for a sufficient number of years before you can receive it. Many migrant workers only work part-time and are relatively mobile. They feel that they will not be able to receive social security after they have paid for the past few years, so naturally they do not want to pay.

These problems are not something we can solve. We need the country to increase its policy propaganda. It is difficult to change one person's concept. With such a large population, it will take one or two generations to establish a complete social security system.

As long as our company does its own thing well, the problem of increasing social security costs really needs to be solved as soon as possible. Nowadays, the reason why our products have price advantages is that low labor costs are a big factor. If labor costs increase

, we will lose our price advantage and our competitiveness will weaken."

Li Weidong said, falling into deep thought.

Although China established a social security system in the 1990s, for a long time thereafter, only formal employees of state-owned enterprises and employees of foreign companies could enjoy social security. Many private enterprises did not pay social security to their workers.

In particular, some labor-intensive companies rely on low labor costs to grab orders, and their workers are highly mobile, so they do not pay social security for their workers.

It was not until 2008, when the Ministry of Personnel and the Ministry of Labor and Social Security merged into the Ministry of Human Resources and Social Security, that the country began to strictly implement social security payment policies. In 2010, the Social Security Law was passed, which legally guaranteed citizens' participation in social security and their enjoyment of social security.

The legitimate rights and interests of social security, China's social security payment has gradually entered the right track.

Although there are legal protections, there are still many private companies and self-employed people who do not pay social security to their employees, but in general, social security is developing in the direction of standardization.

The standardization of social security payments naturally increased the costs of enterprises, and the most affected ones were labor-intensive enterprises. It was at this time that foreign-funded enterprises such as Nike and Adidas took the lead in transferring orders to Vietnam, Bangladesh and other labor costs.

lower countries.

The production factories of household appliances and electronic products also require a large amount of labor. The standardization of social security requires the Puppy Group to pay more than one billion in funds every year to pay social security and medical insurance to employees. And in the future, as the base increases, this number will

It will also increase exponentially.

Li Weidong is not a black-hearted capitalist, and it is a matter of course to pay social security to workers. However, the home appliance industry is already relatively involved and the competition is very fierce. Chinese home appliance companies basically rely on low prices to compete with international brands.

The increase in costs will reduce the competitiveness of enterprises, which is what Li Weidong cares about most.

National policies must be implemented and social security payments must continue. Li Weidong can only find ways to reduce costs from other aspects.

After thinking for a moment, Li Weidong said: "I have three ideas that can reduce costs to a certain extent. The first way is to transfer part of the production capacity to Southeast Asia, such as Vietnam, Cambodia and Indonesia, where labor costs will be lower than in China.

Some."

Wang Jiuyang immediately replied: "We have also done research in this area. The labor costs in Southeast Asian countries are relatively low, but the infrastructure is not perfect, the discipline and work efficiency of the labor force are not as good as ours in China, and there is also a lack of supply chain.

If you add in the investment risks, the current cost is no lower than in China.”

"Yes, Southeast Asia has development potential, but it is not worth investing in right now." Li Weidong continued: "Then let me talk about the second way, which is to automate production and use machines to replace manpower."

"We have also done research in this area. I also sent people to Europe to visit Siemens' robot assembly line. The efficiency is very high. One production line can be worth hundreds of workers, but the investment is also very high. The price of that production line

But it's very high, more expensive than hiring people directly." Wang Jiuyang replied.

"German labor is already expensive, so it is more cost-effective for them to use robots to replace labor. Our national conditions are different from Germany's. Our labor costs are not that high, so we cannot copy the German set." Li Weidong sighed and continued:

"The Germans are eager to use robots for the entire production line to achieve fully automated production. However, we can use robots in partial production links to only replace part of the manpower. This can reduce labor costs and avoid excessive capital investment."

Seeing that Li Weidong wanted new instructions, Wang Jiuyang subconsciously took out a pen and notepad.

Li Weidong continued: "There should be many companies at home and abroad that make industrial robots. Foreign technologies must be relatively mature, but I am more inclined to give domestic companies some opportunities. We can invest money and entrust domestic companies

Develop industrial robots specifically for us and negotiate the distribution of patent rights, and we might even be able to take advantage of the opportunity to make money!"

"Are you planning to sell the robot to other home appliance companies?" Wang Jiuyang asked with a smile.

"Machines replacing manpower is the trend of industrial upgrading. If we use robots and reduce costs, other home appliance companies will of course have to follow suit, otherwise they will have no price advantage. And it is related to the production of products, which is our core

Business must be in your own hands, and you cannot let others choke you!"

Li Weidong continued: "This is a step-by-step process. It may take us more than ten years to achieve this goal. You don't have to worry. I think if half of the workers can be replaced with machines within ten years, it will be enough."

It’s a very satisfying result.”

"Okay, I'll send someone to do some research and then make a more specific plan for you." Wang Jiuyang replied.

"The third way is to make a fuss about the supply chain. With the advancement of science and technology, the application of new materials, new technologies, and new processes should reduce the cost of components. Our upstream supply chain will reduce the price a little bit at every step.

, you can save a lot of money when you come to us." Li Weidong said.

"Chairman, this may not be easy. In the past two years, the prices of various industrial raw materials have been rising, causing the prices of components to rise. However, the selling prices of our products have not risen, especially in the international market. We

We have to compete with Japanese and Korean brands, so we don’t dare to lower prices easily!" Wang Jiuyang said somewhat pessimistically.

"This is the fault of the United States. When the subprime crisis came, the quantitative easing they carried out released so much currency would inevitably lead to inflation. In order to stabilize the exchange rate, other countries could only follow the United States in releasing currency. The global

Inflation is inevitable."

Li Weidong continued with a blank look: "Since it is global inflation, other countries will also be affected by the increase in raw material prices. From this aspect, everyone is on the same starting line, and at this time the competition

What matters is whose supply chain is more resilient!”

Wang Jiuyang nodded in understanding, but the confusion in his eyes seemed to be asking: What exactly are you going to say?

Li Weidong had no choice but to explain: "We need to make the upstream supply chain large-scale and diversified. A large-scale supply chain can help reduce costs, and a diversified supply chain can stimulate competition. To put it simply, we need to make the supply chain more scalable and diversified.

It has to be involution!”

"Involution? What do you mean?" Wang Jiuyang asked subconsciously.

"This is a concept put forward by German philosophers. It means that when a type of model develops to a certain extent, there is no way to stabilize or transform into a new form. It can only continue to become more complicated internally. You can understand it as

In order to compete, peers put in more effort, resulting in a decrease in the revenue-to-pay ratio." Li Weidong explained.

"This 'involution' is to let the upstream supply chains compete with each other, lower prices and improve quality in the competition?" Wang Jiuyang asked.

After all, he graduated from a first-class university in the 1980s. His IQ and understanding ability are both top-notch. After a little thought, he understood the meaning of "involution".

Li Weidong nodded and continued: "The scale of our country's entire home appliance industry is still very large. It not only has the domestic market, but also exports, and OEMs for foreign brands. This is enough to support an upstream supply chain to the world.

supply chain.

However, the level of these upstream supply chains is uneven. Some companies can make very good quality products that fully comply with the high standard certification of the United States and the European Union. Some companies can make products with very poor quality and can only

Sold to Indians.

This is caused by two factors. One is market factors. There is still a market for cheap and low-quality products. Many small workshops and factories specialize in producing cheap goods. Although the quality of the products is worrying, as long as they are cheap enough, people will buy them.
To be continued...