90% of USB drives are modules, which are composed of chips and surrounding components, such as PCB capacitors and resistors. Why do we have products like modules? For example, CPUs and MCUs can be directly soldered onto the motherboard. This represents a direct relationship between the chip and the motherboard, but many products cannot be directly attached to the motherboard. For instance, functionalities like WiFi, Bluetooth, and GPS have different interfaces and can be plugged into different motherboards. For example, USB drives and solid-state drives come in various capacities. A specific functional module may require one, two, or three USB ports. Additionally, chips are categorized into different grades. To illustrate with storage, the storage products we commonly use, such as memory cards, USB drives, mobile phones, and solid-state drives, all utilize the same medium: Flash. This Flash is cut from a large wafer into smaller pieces. For instance, if one piece yields 1000 chips, 900 of them are classified as grade A. Grade A chips can be used in mobile phones and solid-state drives, while the remaining 80 are classified as grade B and C. Among these 80, the better ones can be used for memory cards, while the lower quality ones are only suitable for USB drives.
What products in the market belong to the module category? For example, display screens are produced by factories that need to purchase display panels from BOE and then combine them with different interfaces, frames, and driver chips to sell to laptop manufacturers. The camera modules in smartphones also fall under this category, as some phones require one, two, or three cameras. Manufacturers of image sensors cannot meet all these functionalities, so they sell the image sensors to module factories, which then assemble them and sell the completed modules to smartphone manufacturers. Another example includes products like WiFi, Bluetooth, and GPS modules, which need to adapt to different product forms and physical sizes. In simple terms, module factories purchase chips and surrounding components from original manufacturers and assemble them into semi-finished functional modules.
In summary, high-tech companies that produce modules are considered secondary high-tech enterprises compared to those that manufacture chips or original display screens.
The next section will discuss the relationship between high-tech module companies and the stock market.