Beijing Pinecone Electronics Co., Ltd. has changed its name to Beijing Xiaomi Pinecone Electronics Co., Ltd. which is 100% owned by Xiaomi Communications Co.
Last year, Pinecone Electronics has a core team of founding members who left to form the new Nanjing Big Fish Semiconductor Co.
Xiaomi Group Organization Department sent an email at the time, said that in order to accelerate the landing of the company's AIoT strategy and promote the faster development of the chip research and development business, Xiaomi's wholly-owned subsidiary Pinecone Electronics team restructured, part of the team split to form the new company Nanjing Big Fish Technology.
At Big Fish Semiconductor, Xiaomi holds a 23.36% stake, making it the second-largest shareholder.
Behind the team split, restructuring, and company name change is the reality that Xiaomi Pinecone has only released one Surge SI chip in February 2017 since its inception in 2014, and only relevant photos of the much-hyped Surge S2 chip have been revealed so far.
At the same time, the industry is concerned that starting January 16, 2020, through its Hubei Xiaomi Yangtze Fund, Xiaomi has intensively invested in at least eight semiconductor companies, including Dioo Microelectronics, MindMotion Microelectronics, and ASR Microelectronic.
Is Xiaomi Pinecone having trouble developing its own chip? Or is there something new on Xiaomi's part about the chip? Industry speculation is that the Surge S2 chip should be stuck on a patent, and it should be a 5G baseband patent.
An engineer at Xiaomi Pinecone also said that 5G chip development is "very difficult".
Patent trouble
Pinecone Electronics was founded in October 2014, when it wasn't starting from scratch.
In October 2014, Pinecone Electronics signed the SDR1860 Platform Technology Transfer Contract with Leadcore Technology, a unit of Datang Telecom Technology, to acquire Leadcore Technology and its holdings of SDR1860 Platform Technology for 103 million Yuan.
In February 2017, Xiaomi officially launched Pinecone Electronics' first mobile SoC chip "Surge S1" at the National Convention Center in Beijing.
The SoC chips used in mobile phones mainly include AP (Application Processor) and BP (Baseband Processor), where the mobile phone operating system, user interface, applications run on the AP, BP is mainly responsible for the communication between the phone and nearby base stations.
At that time, the BP part of the Surge S1 SoC chip, mainly carrying the five-mode LTE baseband, came from the SDR1860 platform of Luixin.
The Surge S1 was launched less than 3 years after Pinecone Electronics was founded and shocked a lot of people in the industry.
At that time, Xiaomi founder Lei Jun explained at the launch site why Xiaomi wants to make mobile phone chips, because "the chip is the high point of mobile phone technology, Xiaomi to become a great company, must master the core technology. So we set up Pinecone Electronics on October 16, 2014, to make our own phone chip."
Of course, Lei Jun from the beginning also realized the difficulty of doing chips, saying that "the chip industry 1 billion capital to start, the whole investment may want 1 billion U.S. yuan, and maybe 10 years before the results."
Specifically to the then released Surge S1, Lei Jun said at the time, Surge S1 "from the project to the final chip mass production, we only took 28 months."
But since then, the iterative version of Surge S1, Surge S2, has not been released since 2017.
Recently, a well-known digital blogger tweeted a photo of the Surge S2, but did not announce the detailed parameters of the Surge S2, only that it is a 2018 chip.
For Surge S2's difficult production, an industry insider commented, "Surge S2's difficult production, as well as looking at Xiaomi's recent moves, the biggest problem should be stuck on the patent, and is the 5G baseband patent, it is estimated that several 5G bigwigs in the industry no one wants to give Xiaomi a license."
Currently, global chip vendors with 5G baseband include Qualcomm, Apple (which acquired Intel's 5G chip business), Huawei, Samsung, MediaTek, and UNISOC. Among them, Apple, Huawei, and Samsung are mainly self-use, independent 5G baseband chip suppliers only UNISOC, Qualcomm, and MediaTek three.
Xiaomi Pinecone engineers told reporters that their company mainly develops mobile phones as well as IoT chips, especially 5G phones need to be developed using specific chips.
The reporter asked about the difficulty of 5G chip development, the other side said, "this is very difficult. From protocol to speed, there are high demands."
A Huawei internal engineer Wang Jie (pseudonym) told reporters that the 5G baseband chip "must be patented. However, authorization is generally given, it's just a matter of how high or low the price is. If the royalties are too high, Xiaomi makes its own chips, it's better to buy them directly."
A person at the Institute of Technology of the Chinese Academy of Sciences believes that the issue of Xiaomi Pinecone may have nothing to do with patent licensing, because "the processor structure design, many patents are very poorly detectable, which means that even if you use (someone else's patent), others may not know. Or even if someone else knows about it, they can't prove it by technical means, so often people just turn a blind eye to patents. It's the exposed, highly detectable patents that are valued, such as the instruction set level, the hardware and software interface level, etc."
Pan Helin, author of "The New 5G Industry," analyzed to reporters that patents are revenue in the age of the knowledge economy. At present, China's 5G development is in full swing, seizing the first opportunity of technology patents, on the one hand, is conducive to seize the market, expand the market, improve its own competitiveness. On the other hand, at present, 5G technology is still in the initial accumulation stage, not fully mature, at this time, authorizing other enterprises is tantamount to giving away development opportunities, so not only for millet, for any competitive enterprises in the industry, will be strictly guarded.
Other difficulties
After the chip is designed, it also faces the challenge of flowing chips and mass production.
In fact, as early as the end of November 2018, some industry insiders broke the news that "Xiaomi Surge S2 chip five times flow chip all failed, Xiaomi estimated to give up", but at this time did not get Xiaomi Pinecone aspect of the response.
Wang Jie believes that 5G baseband licensing fees are too high and that the cost of self-research chips is not as good as outsourcing, because "Huawei's low-end phones use outsourced chips, only high-end phones use self-research chips".
There are also quality issues, Wang Jie revealed that Huawei has eaten a lot of losses in the process of chip self-development, quality is only now at the same level as Qualcomm, "so the odds are that it's a quality issue, then it's a cost issue."
Wang Jie believes that Xiaomi's core entrepreneurial team does not have a background in communications, baseband is a natural shortboard. "Including Apple, baseband is also a weak point. Huawei has been working on base stations for so many years, and according to say, the accumulation of baseband technology should be good.
According to Pan Helin, there should be a number of reasons why Xiaomi Surge S2 has been slow to hit the market. First of all, Xiaomi Surge S1 is not independently developed by Xiaomi, so the R&D experience is clearly lacking compared to well-known brands like Huawei and Apple.
Secondly, the chip research and development costs are expensive, and Xiaomi mobile phone is to go the low-cost civilian route, in commercial use is not enough to support the chip's continuous research and development, in terms of funding may face a lot of pressure.
"Xiaomi chip development may face financial pressure, supply chain pressure and patent pressure, 5G chip development difficulties further, so Xiaomi development 5G chip road is long." Pan Helin said.
Brain drain
Recently, Pinecone Electronics just changed its name to Xiaomi Pinecone. Previously, Pinecone Electronics' core founding team members left and reorganized Big Fish Semiconductor.
Although Lei Jun said in an internal email at the time that he never gave up on the development of the Surge series of chips. But industry speculation, Xiaomi 100% control Xiaomi Pinecone, only owns less than 1/4 of Big Fish Semiconductor, but let Pinecone Electronics core team leave to engage in IoT chip research and development, seems to be the intention to give up the "self-development chip" project. If Lei Jun is serious about the "self-developed chip" project, it should be unlikely to spin off Pinecone Electronics, nor should he give up control of Big Fish Semiconductor.
However, some industry insiders believe that Xiaomi's layout in the ecological chain has always been to adopt the approach of non-controlling investment, after the spin-off and restructuring to give Big Fish team a controlling stake, will greatly stimulate the enthusiasm of the entrepreneurial team, but also help Big Fish to attract more strategic investors and business partners.
Just recently, Mi Xiaolong, founding partner of Pinecone Electronics and founding partner of Big Fish Semiconductor, left to join UNISOC. Some in the industry are again starting to question the progress of Xiaomi's self-developed chips.
It is understood that Mi Xiaolong was an early technical team member of Huawei Wireless Base Station and a founding team member of Hays Wireless Technology before joining Pinecone Electronics and Big Fish Semiconductor as a founding partner. Currently UNISOC CEO Chu Qing is also from Huawei Hays and is gathering a large number of old Huawei Hays people for UNISOC.
