Even if we take it easy in 2026, Sanwu Micro can still achieve profitability, but anxiety continues to haunt me.
The chip industry has a characteristic: the sales performance of 2026 is determined by that of 2025, and the performance of 2027 is determined by that of 2026. As we approach the end of 2025, I begin to think and worry about the sales performance and profitability of 2027.
Why the anxiety? Why would a profitable company still feel anxious? In the Chinese market, as long as it is an open and mature market, existing profitable products and opportunities can only be maintained for a year at most. Competition is the norm, a constant state.
As soon as a new market opportunity arises, once others see you making money, many new competitors will come to share this new market and opportunity. This is also why Chinese people advocate quietly making a fortune, but in the open chip market, silence cannot be maintained; only active response is the way out.
Profitability is the only correct choice for unlisted chip companies. Although some unlisted chip companies are good at storytelling and can always secure investments, surviving in the market by burning money, these companies also prefer to follow others and sell at low prices to boost sales, as sales figures can be misleading and a tool for deception. The existence of this phenomenon makes it impossible for the domestic chip industry to complete its reshuffle in a short time, and it will also lead to bad money driving out good.
Within 2-3 years, those who cannot tell a story or have no story to tell, cannot achieve sales, and have no profitability will surely be eliminated.
Within 3-5 years, those who can only tell stories, cannot go public, and cannot achieve profitability will likely also be eliminated, as continuously burning money cannot attract so many sentimental and generous investors.
Within 5-10 years, those unprofitable listed chip companies will also likely not be able to hold on; they will either exit or be acquired.
The Chinese chip industry needs to become orderly and rational, which may take 10 years.Ten years, just in time for the Sanwu Microelectronics entrepreneurial team to enter the second decade of developing Wi-Fi FEM.
Ah, how can I not feel anxious? We have to endure in this extremely competitive market environment for another ten years to have the opportunity to face the sea and enjoy the spring flowers.
Although we do not need to be poets, we should be people with poetry in our hearts, allowing our lives to have poetry and comfort. We should enrich the mundane with poetic imagination and convey poetic kindness in our interactions. Having poetry in our hearts will help us see the dawn of hope in difficulties, and with a poetic mindset, we can view the ups and downs of life and the turbulent waves of the domestic chip industry.
I do not think about how successful I can be in the Chinese chip industry; since I have chosen the distance, I will only focus on the journey through wind and rain. From product thinking to profitability thinking, then to sustainable profitability thinking, and back to product thinking, forming a cycle that continuously upgrades. Upgrading product thinking, upgrading profitability thinking, upgrading sustainable profitability thinking. Only by continuously upgrading can the company grow and expand.
Through “product thinking” + “profitability thinking,” we have achieved profitability. How can we maintain sustainable profitability? To achieve profitability, we continuously seek new, more segmented markets, guarding against listed chip companies entering while also facing competition from unlisted chip companies. In an open market, one cannot simply defend; even if sales figures are maintained, profits cannot be secured. In the current market environment, some chip sectors have fallen into “involution” due to blind following and price competition, leading to severely compressed profit margins, a phenomenon vividly termed “profit desertification.”
Therefore, we must have a sustainable profitability mindset to seek new oases.Where will our new oasis be in 2027? Only by continuously upgrading product thinking can we find new oases.
Chip product thinking is built on the company’s chip technology, and upgrading product thinking also relies on upgrading the company’s chip technology; otherwise, new oases cannot be found, as too many people are searching for oases.
Building chip technology takes two years, building chip products takes one year, building the market takes one year, but the market profitability time is only one year.Five years constitute the entire lifecycle from the incubation to the end of domestic chip products; although this product is still alive in the market, in my heart as a product manager, it has already died, perished in the desert of no profit.
Pricing determines the vitality of chip companies. If a newly launched chip does not have a gross margin of at least 50%, it is not a successful chip. If the gross margin in the first year of market sales is less than 40%, this chip may not make money. Making a chip involves many participants, significant R&D investment, and high full mask production costs; if the first year of market volume does not recover costs, it may never recover, as some chip companies like to follow others and undercut prices to grab orders. Why do some companies always like to follow others in making chips? Because the company lacks excellent chip product managers, or the boss does not trust the product managers; following others incurs no trial and error costs.
How do we face this situation? There is only one approach—be ruthless. Make a lot of money in the first year in the market; if competitors join after a year, fiercely cut prices, driving them to a point where they cannot recover their initial R&D and full mask investments.
It is indeed very difficult to make chips in China; there may only be a one-year window for profitability. Either launch competitive new products in the existing market or find a suitable new market and leverage your technological advantages to develop new products.
For2027, we must prepare new products in2025, promote them in2026, and reap profits in2027. The products successfully developed and mass-produced in 2026 are meant for 2028. We are doing just that; Sanwu Micro has prepared many good new products in 2025, and in 2026, we will promote them well, believing that 2027 will be another fruitful year.
If your chip technology leads the industry, then you can have products in front and markets behind; if your technology is homogeneous, then you can only have markets in front and products behind. The vast majority of domestic chip companies, if they want to achieve profitability, must avoid involution, with markets in front and products behind. Simply put, find the market first, then create the chip products that the market needs, ensuring that the products have pricing power.
In summary, enterprises are economic organizations established for profit, engaging in production, circulation, or service activities, and achieving profitability through the provision of goods or services. The pursuit of profit is the purpose of business operations, and we hope that domestic chip companies will return to the right track and maintain profitability.