"We aim for high-precision, high-profit manufacturing. I believe that years from now, when you introduce yourselves to others, you can proudly say, 'We are engaged in the world's most advanced manufacturing industry.' Even if someone sells clothes or tea eggs and makes billions, we won't look down on them. Cheers!'"
As Lu Feng spoke, he raised his wine glass, and everyone clinked glasses, creating a lively atmosphere.
Lu Feng knew that everyone would feel uncomfortable losing such a large company as Jiafeng Group. They used to be executives of top private enterprises, but now they were executives of such a small company, which would definitely make them feel unbalanced. At this time, it was necessary to use the word "high-end" to make everyone feel better.
After everyone had eaten and drunk their fill, they dispersed. As they were leaving, Liu Cheng stood next to Lu Feng and asked in a low voice, "President Lu, when will the funds arrive?"
"Did you use all the money to buy equipment?" Lu Feng asked.
"Research and development equipment and materials are very expensive because of the small quantity, some more than ten times more expensive. In addition, some companies are lucky if they can buy them when they hear that they are from China. There are no problems with equipment this year, it's just the wages!" Liu Cheng said in a low voice.
"How many months can we hold out?" Lu Feng asked.
"At most, around April or May. Currently, the chip manufacturing plants are spending around 60 million RMB per month. This doesn't include the upcoming expansion of the hydropower plant. Our current product market is generating around 20 million RMB in profit per month. Adding in the overseas and domestic R&D centers, as well as the talent recruitment during the graduation season, we should be able to control our monthly expenses to around 100 million RMB, resulting in a net loss of 80 million RMB!" Liu Cheng quietly calculated the figures.
"We're losing a billion yuan a year!" Lu Feng said, taking a deep breath.
Even if we maintain the current production volume, once a new product is mass-produced, it will cost another sum of money. The problem now is that we lose money every time we mass-produce a product. The market is too small and the volume is too small. In terms of procurement, they have no say at all. It's all the other party asking for exorbitant prices.
"Are there any new products launched this year?" Lu Feng asked.
"We've had a few iterations, but the more we work on them, the less motivated we become. Take memory sticks, for example. The top international standards are basically 64MB, but even after our iteration, we can only achieve 32MB. Our read and write speeds are only seven or eight tenths of theirs. Because the market is too small, we can't sign contracts for large batches, and our costs are even higher than theirs!" Liu Cheng sighed softly, somewhat helplessly.
"If we include these products that need to be iterated, how much money will we lose this year?" Lu Feng asked.
“At least double!” Liu Cheng replied.
“We need to have our own flagship product as soon as possible. In what areas do you think we can make a breakthrough in the next year or two?” Lu Feng asked.
"Screens! We have accumulated a lot of experience in screens. Currently, there are two directions in screen display: Silicon Valley is working on plasma, and Japanese companies, led by Sharp, are working on LCD displays. We also have some experience in LCD displays," Liu Cheng replied.
"You said you lost more than 200 million RMB. I'll give you even more authority. This year, you can lose 200 million USD. By this time next year, can you still produce LCD displays?" Lu Feng asked.
Liu Cheng hesitated for a moment, then said, "How about we give them another 100 million? We have a lot of technical reserves, but Sharp holds the patents in this area. We can pay them a portion of the money to do cross-patenting, and we can start mass production next March!"
Lu Feng nodded in agreement; now they needed a profitable product!
They also discussed some technical issues. Whether it was processors, motherboards, or data transmission, they were lagging behind international standards by more than one generation. Lu Feng demanded that they achieve 80% of the world's top-tier level in processors, storage, monitors, and hard drives by 1999.
At that time, we must launch our own flagship product line, targeting the domestic consumer electronics market.
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