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Dong Mingzhu's once "bold statement" has now come true once again.

In April 2018, Dong Mingzhu, who first revealed her dream of making chips, told the media: "Even if it costs 50 billion, Gree will make the chips a success." However, what she received at the time was not applause but a chorus of ridicule. Many experts and scholars "presented data, discussed industries," repeatedly arguing that "Sister Dong's" ideas were far-fetched, and the market responded with a significant 8.97% drop in stock prices, casting a vote of strong opposition to Gree's chip-making efforts.

Yet, four years later, Gree has proven with facts that Dong Mingzhu's obsession with chips was not just talk.

It is understood that the annual shipment of chips produced by Gree's subsidiary, Zero Boundary Integrated Circuits, averages over 34 million pieces, and according to industry insiders' estimates, this year's shipment will definitely exceed 135 million pieces.

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At the same time, the industrial-grade EM32 series and EAI series chips launched by Zero Boundary have successfully passed the ESD third-party authoritative testing this year, achieving performance reliability and product yield levels comparable to imported chips of the same class.

In just four years, how has Gree managed to achieve such results?

Firstly, by focusing on industrial chips, Gree has eliminated the idea of being suppressed by foreign companies.

Gree Semiconductor has heavily invested in the research and development of industrial-grade 32-bit MCUs, which are widely used in industrial control, automotive electronics, household appliances, and other fields.

Looking at the internal composition, the MCU integrates multiple advanced general-purpose timers, built-in multi-channel high-speed dual ADCs, and analog operational amplifiers, thus giving the MCU a more prominent computational advantage in motor control scenarios compared to other chips.

Reflected in the operation of air conditioners, the MCU chip, combined with the inherent motor control functions of the air conditioner, can allow the air conditioner to operate with low noise and low vibration while always maintaining the best energy efficiency, alleviating the problem of excessive power consumption caused by the frequent on and off of mechanical motors.Test data indicates that compared to traditional air conditioners controlled by a single motor, the new type of air conditioner using MCU generally reduces power consumption by 25% to 30% under the same temperature control requirements. However, such a critical component has been dominated by foreign enterprises for a long time.

From the data in 2019, we can see that overseas chip giants led by Renesas of Japan and Freescale of the United States almost monopolized 90% of China's MCU chip market. Domestic brands such as Midea, AUX, and even Gree itself, have all unilaterally relied on foreign manufacturers for chip supply. Once overseas manufacturers temporarily stage a "chip shortage," one can imagine what would happen to domestic air conditioning companies, as seen in the new energy vehicle sector.

Therefore, the reason why Dong Mingzhu wants to develop chips, setting aside national sentiment, is more directly aimed at increasing the "independence" of Gree air conditioners and eliminating the potential "stranglehold" ideas of foreign enterprises.

II. Gree's Chip-making Strategy: Self-development + Acquisition

So, what has Gree done to free itself from dependence on foreign enterprises in just four years?

1. Focus on self-development, 4 years is not "starting from scratch"

Strictly speaking, Gree's chip business is not a "4-year success." Before Dong Mingzhu said "50 billion to make chips," Gree had already accumulated a considerable amount of experience in the field of chip design.

As early as 2015, Dong Mingzhu decided to establish Gree Microelectronics Research Institute and Power Semiconductor Research Institute, which are specifically engaged in the design and development of air conditioning MCUs, embedded AI chips, and EP series power devices. In fact, the Zero Boundary Integrated Circuit Company, which became independent in 2018, was formed by the merger of the above two departments, with the same management and research team.

With such a solid R&D team, Gree not only achieved the industry-leading level of 28nm for MCUs while the mainstream process was still at 90nm, but also passed the most stringent ESD performance tests.

2. Collaborate with Wingtech Technology to solve upstream bottlenecksDong Mingzhu's strategic move in the chip-making industry, in addition to her own efforts, was to collaborate with Wingtech Technology. Together, they successfully acquired Nexperia in 2018, thereby completely resolving the upstream supply issues for Gree's chips. Nexperia is a leading global supplier of semiconductor standard components, with its logic devices, discrete devices, and MOSFET modules consistently ranking in the top 3 in the industry. In the more upstream segments of transistors and diodes, Nexperia has long held the top market share position globally.

During the critical phase of Wingtech's complete control over Nexperia, Gree Group contributed financially on two occasions. The first was through an investment of 880 million yuan in Wingtech's subsidiary, Hefei Zhongwen Jintai, to acquire shares in Hefei Guangxin; the second was when Gree's Zhuhai Ronglin invested 2.115 billion yuan to purchase partial equity in Hefei Guangxun (both being shareholders of Nexperia).

Ultimately, Wingtech Technology obtained the indirect stake in Nexperia held by Gree through a share swap, achieving absolute control with a 79.97% controlling interest. Concurrently, Gree became the second-largest shareholder of Wingtech Technology.

In conclusion, when Dong Mingzhu first mentioned the "50 billion chip-making" initiative in 2018, many people thought it was unrealistic. However, upon understanding Gree's strategy of self-research and acquisition, we can see that Dong Mingzhu's approach was quite prudent.

Gree's success in the semiconductor field once again proves a saying: Most people believe what they see, but only a few see because they believe.