Chapter 797 - 753: Chip Crisis

NASDAQ, the US stock market is experiencing another unprecedented major crisis.

The surge in Intel shares is just a minor exception, and a completely unexpected result.

After all, Intel has always wanted to shed its manufacturing operations, planning to focus solely on IC design.

Chip factories are indeed high-tech, but they do not always represent high profits. The success stories like TSMC’s have their inevitable accidents, and for Intel, dealing with manufacturing is hard, solid work. In the latter years of the original timeline, they had been continuously selling off their chip factories.

However, no one expected that due to TSMC’s mishap, Intel would temporarily become the only supplier of high-end processing technology, and even though the overall market trend was pessimistic and downward, Intel still managed to go against the trend and rise.

However, other companies were not so lucky. Whether due to real-world factors or external influences, Taiji Electric might not be able to supply normally for a short time, which nearly meant that they had no products to sell.

Even if you have a good product, you need inventory to sell!

And now, Cook is facing this infuriating problem.

The iPhone X was released last year, and the next generation is planned for next year, so there’s no rush in terms of new products for the time being.

However, the iPhone X is still the main product, in the midst of hot sales. If chip supplies were cut off, it would mean that financial reports for at least a quarter would fall short of expectations, which would have a significant impact.

Next month, the iPad Pro 2018 is set to launch immediately. The mainland’s mainboard and case factories have been operating at full capacity, entering the inventory hoarding phase. However, there are only a hundred thousand chips in stock, which would just make a splash before running out.

As long as Apple does not want to lose its reputation entirely, Cook can’t hold a launch event under these circumstances.

"Tenus, how’s the situation on your end?"

Cook looked towards his chief hardware engineer, Tenus, who was also very frustrated:

"Not good. Although the factory wasn’t destroyed, the ensuing staff unrest has practically brought production to a halt. Moreover, even if they continue producing the chips, I’m afraid we won’t be able to get our hands on them to install into our products."

Tenus spoke rather diplomatically, but Cook immediately sensed what he was worried about, and it wasn’t without reason.

Any hope of continuing deliveries in the short term was nearly nil, and it was a problem that had to be faced.

"What about Intel, can Intel come up with a solution?"

Tenus still shook his head:

"The A12X uses a 7nm process, and Intel has just developed their 10nm process successfully. In theory, the transistor density is comparable to TSMC’s 7nm, but they are not interchangeable and their reliability has yet to be verified.

But the biggest problem is that they don’t have the capacity. I’ve already asked, and Pat said they need to focus on expanding the capacity for the 9th generation Core for the second half of the year. The 10nm technology is slated for the next generation Core series set to release next year, so they do not have any production lines available.

If we need them, the earliest they can schedule production for us will be after April 2019."

"So, six months later? They expect us to wait six months and then use their crappy process?"

Cook was somewhat angry, yet Tenus continued to add fuel to the fire:

"And it’s an expensive crappy process, at that. Pat has hinted to me about Intel’s plans to re-enter the mobile market, hoping to either invest in us or acquire some patents..."

"Let those motherfuckers dream on!"

Cook knew what those people were thinking. Ever since the appearance of smartphones, the Blue Factory had been attempting to enter the mobile market, releasing mobile processors and communication basebands. After being outperformed by Qualcomm, they reluctantly reduced their investment.

Take note, they did not cease. Intel’s gaze has always included the mobile market, and now that every major mobile chip manufacturer is about to face an unprecedented chip shortage, it would be a missed opportunity not to take advantage of this godsent situation.

For Intel, capacity and processes indeed have some issues, but they are not fatal. The new 10nm process used by the next generation Core has more than enough excess production capacity below this process. Besides, the 10nm capacity is also idle for seven or eight months. According to Intel’s own thinking, their 10nm process can totally match TSMC’s 7nm without any issues.

This seven-month period will coincide with the weakest time for several large mobile manufacturers, and Intel has already started to mobilize under Old Morgan’s encouragement, ready to make a big move.

"No, we can’t just sit and wait for our doom."

Cook stood up, pacing back and forth behind his office desk, then after a long moment, he made up his mind:

"Prepare a plane immediately, we can’t give up on Taiji Electric’s capacity. Without Taiji Electric, we won’t have anything to sell going forward!"

Tenus: "But what if..."

Cook: "Do the investors also want to watch a tech company worth over a trillion US dollars halt production because we have plenty of designs but can’t apply them?

Even if we find another supplier, it’ll be months from accepting the order to starting production, and we simply don’t have that much inventory!"

Just half a month ago (a month and a half later than the original timeline), Apple’s value had just surpassed a trillion dollars, becoming the most valuable tech company, enjoying unprecedented prominence for a while.

Of course, now its value has fallen again, and all executives are trying to turn the tide.

Cook believes they know what choices to make. Even though many people previously shouted about blowing up TSMC, look, isn’t it doing just fine now!

Moreover, if it were bombed, the major tech companies alone would chase them to the ends of the earth.

In the free world, nothing is more important than the US Dollar!

When it comes to making money, all regulations need to give way!

...

Capital International Airport.

Steve Mollenkopf hurried off the plane, looking like an ordinary tourist in a rush to get somewhere.

As the head of Qualcomm, his trip did not come with a grand entourage, no welcoming officials, no reporters or cameras, nothing at all.

Just him and a few executives and their corresponding assistants, who hastily booked the quickest flight, heading to Beijing with the most urgent mindset.

Steve walked ahead, and then noticed several officials loitering near the tarmac, several of whom looked somewhat familiar.

A smile immediately appeared on his face as he said to his secretary:

"Even though our arrival was urgent, we still received the proper reception, thank goodness, this is really good news. They seem to be standing in the wrong place, though, but no matter, we must hurry over."

But the secretary was clearly not as optimistic. He frowned and looked over a few times, then noticed a few people in work clothes.

Printed on the work clothes was: Intel (Huá).

He quickly stopped the president’s progress and informed him that they were there to welcome the Blue Factory. Steve’s face turned somewhat incredulous.

"What are they doing here, their clunky X86 doesn’t need high-end capacity, they can produce it in their own little workshop."

After some thought, the secretary said uncertainly:

"Perhaps... they want Taiji Electric not to recover so quickly?"

"Damn it! Hurry up and follow me!"