$600M Investment Fuels Century-Scale Output Ambitions

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In the realm of technology, innovation and investment are critical for sustained growth and competitivenessThis is exemplified by the recent developments in the Chinese semiconductor sector, particularly through the lens of a notable company, Shi Chuang YiEstablished in 2008, Shi Chuang Yi has seen a tremendous evolution from its initial focus on toy manufacturing to becoming a significant player in the storage chip industryToday, this company boasts an impressive encapsulation capacity of up to 200 million chips annually, with projections indicating a staggering 300% increase in capacity by the end of 2024, courtesy of a newly constructed industrial park dedicated to storage integration.

The expansion ambitions of Shi Chuang Yi are prominently supported by Xiaomi, a dominant force in the smartphone marketIn a strategic investment made last November, Xiaomi led a substantial financing round of over 340 million CNY for the companyThis investment represents not only a vote of confidence from one of the leading mobile manufacturers but also reflects the increasing influence of Chinese tech giants in the semiconductor space—a sector that is traditionally dominated by established players in the West.

The partnership between Shi Chuang Yi and Xiaomi signifies a shift in the semiconductor landscape, where companies are recognizing the importance of forming alliances to foster innovation and push technological boundariesShi Chuang Yi’s recent achievements include securing additional funding from Hefei Industry Investment and establishing its reputation among over 110 semiconductor-related enterprises within a brief period.

A closer look at the leadership of Shi Chuang Yi reveals that its chairman, Ni Huangzhong, is committed to building a robust foundation for the company

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He acknowledges that while they may not yet compete with the top-tier players in the storage industry, they have surpassed 90% of module manufacturers in terms of technological advancement and market readiness.

Reflecting on the past, Ni emphasizes that the company's growth trajectory has been punctuated by strategic pivots, driven by both market demands and technological advancementsFor instance, following a significant downturn in the storage chip market in 2012, Shi Chuang Yi made a decisive shift by cutting back on other product lines and focusing on the encapsulation of storage modules—the move that proved to be timely as it allowed them to capitalize on the emergence of new technologies.

As Shi Chuang Yi continues to develop its capabilities, Ni is clear about the company’s long-term visionWith a target set for a production value reaching 10 billion CNY within five years and an ultimate market valuation of 100 billion CNY, the organization is poised to not only innovate but also to compete on a global scaleThe establishment of their expansive 66,000 square meter integrated circuit industry base slated for production by 2024 further solidifies their ambitions.

Having initiated significant strategic discussions recently, Shi Chuang Yi's leadership has paved the way for a bright future, particularly with a robust focus on research and developmentWith nearly 50% of the workforce in R&D roles and significant investments made towards fostering innovative technologies, Shi Chuang Yi aims to ensure that all its products meet stringent self-research standards.

Indeed, reflected in the latest interviews with Ni Huangzhong, the journey of Shi Chuang Yi embodies the spirit of entrepreneurial resilience and strategic foresight

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Initially launched during the 2008 financial crisis, the company has evolved through various phases—from toy OEM operations to leading the development of cutting-edge storage solutions.

01.

From financial crisis to entrepreneurial milestones

Evolving from traditional manufacturing to innovative solutions

Born in Huangshan, Anhui, Ni Huangzhong is a testament to the determination and innovation characteristic of Chinese entrepreneurshipGraduating in 2000 with a degree in mechatronics, he ventured to Shenzhen—an epicenter of technology innovation in China—with the singular aim of integrating his educational background with industry experience.

After initially working at a toy manufacturing facility, Ni honed his skills in product development and managementThis experience served as a vital launching pad for his aspirations to create a technologically advanced manufacturing entity.

The global financial crisis of 2008 marked a pivotal moment for Ni, who seized on the opportunity presented by rapidly declining manufacturing costs and the availability of cheap equipmentHe established Shi Chuang Yi with a focus on contract manufacturing toys, a venture that set the foundation for future expansions.

Despite the challenges posed by the commodity price fluctuations in the early phases, the company learned swiftly that success could not rest solely on diversification without foundational technological strengths

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Thus, a strategic shift occurred around 2010, leading Shi Chuang Yi to refocus on LED power supply and USB flash drive encapsulation—initiating the first transformation of its business model.

In the wake of the storage market crash in 2012, Ni recognized the risk posed to low-end manufacturersThis prompted a shrewd pivot towards high-technology storage encapsulation, marking the company's entry into the storage field in 2013. This transition symbolizes what would become one of the most significant turning points in their history.

Moreover, Ni's commitment to creating the best products globally has led to continuous updates of production equipment and methodsIn the pursuit of excellence, he aimed to upgrade to more sophisticated manufacturing automation technologies, laying the groundwork for a high-performance encapsulation production line.

Acquiring high-end manufacturing equipment was not without its hurdles, as many domestic suppliers focused primarily on lower-end productsThrough persistent negotiation with Japanese manufacturers, Ni was able to secure contracts for advanced fabrication technology.

This phase solidified the foundation necessary for Shi Chuang Yi to cultivate a high-quality encapsulation supply chain, reinforcing Ni's philosophy of building a respected and innovative business capable of competing at the highest levels.

02.

Strategic subsidies to elevate 'Made in China'

Launching the first Chinese Micro SD cards

Central to Ni's vision is the relentless pursuit of product quality

Shi Chuang Yi has been diligent in its efforts to produce high-end products, focused on iterative improvements and maintaining competitive advantages.

In response to market dynamics, Shi Chuang Yi ventured into the Micro SD segment in 2015. Early market analysis revealed a gap between offerings from Taiwanese and Mainland manufacturers, particularly regarding product aesthetics and perceived qualityDetermined to rectify this, Ni developed a bold strategy involving a 1-cent subsidy for products labeled 'Made in China'—which significantly improved customer perceptions.

This approach, which revamped their Micro SD product's reputation, led to a robust market presence and allowed them to successfully launch BGA SSD manufacturing, demonstrating Shi Chuang Yi's capability in producing storage chips in-house—a significant milestone in their evolution.

Despite initial challenges, including client hesitance to adopt their products due to brand recognition issues, Ni's determination to produce encapsulated chips under his own label persistedThis foresight laid the groundwork for future advancements.

By 2017, Shi Chuang Yi achieved significant milestones, being the first Chinese company to mass-produce 256GB and 512GB Micro SD cards, showcasing their technological advancements to both domestic and international markets.

Nostalgically, Ni reflects on the remarkable journey of “Made in China.” The narrative has shifted from one of low-cost manufacturing to an emblem of cutting-edge technology, redefining Chinese products as competitive globally.

03.

Integrating into major OEM players' supply chains

Securing 600 million CNY in funding

Following their successful innovations, Shi Chuang Yi continues to expand its operations in the storage chip ecosystem

The team is developing embedded systems to better serve smartphone manufacturers, emphasizing that hardware alone is insufficient without integrated software and firmware solutions.

Fast-forward to 2019, when Shi Chuang Yi announced its entry into the eMMC market, quickly ascending to a position of strength within just a year by outperforming competitors in technology with eight-die stacking for a 256GB eMMC, showcasing a significant leap in their manufacturing capabilities.

Prompted by external pressures such as international tensions, the team recognized the urgent need to align closely with leading OEM suppliers in ChinaThey sought and secured significant funding to support these ambitions, acknowledging that large investments were essential to keep pace with the industry's demands.

In the face of a historic downturn in the storage sector in 2023, Shi Chuang Yi successfully completed two significant rounds of financingNotably, last November, they raised over 340 million CNY in B-round financing led by Xiaomi, with additional investment from various upstream and downstream players in the industry.

Looking ahead, Ni is optimistic about solidifying partnerships with leading firms like Xiaomi to enhance their overall storage solutionsLeveraging the trust and credibility developed during these tough market conditions suggests a resilient strategy for future growth.

Reflecting on the developmental journey of Shi Chuang Yi, it becomes evident that each strategic pivot has led to unexpected success, constantly raising the bar for what they can achieve next

Ni noted that initially, his objectives were modest—primarily aimed at creating a business for his own livelihood—but he never envisioned reaching the heights they have achieved today.

04.

Annual encapsulation capacity of 200 million units

New industrial park projected to boost overall capacity by 300%

Ni frequently underscores the importance of product mastery, which is evident from their diverse business strategy centered on high-quality manufacturing.

Currently, Shi Chuang Yi operates two brands—SCY for consumer-grade storage products and WeIC for industry-grade solutions—demonstrating their versatility and forward-thinking approach.

Differentiating their product lines, the consumer segment targets sectors such as smartphones and PCs, while industrial control products are aimed at future market trends, facilitating deeper processing of electronic components.

The product portfolio of Shi Chuang Yi now spans embedded storage chips, SSDs, DRAM modules, and mobile storage solutions, operational across various industries including 5G, consumer electronics, automotive technology, cloud data platforms, and industrial automation.

In terms of production capacity, Shi Chuang Yi holds an encapsulation capability of 200 million chips per year, complemented by the module production facility capable of yielding 18 million units annually

The completion of their storage integration circuit industry base will further enhance these numbers significantly by 300% by late 2024.

A comprehensive research and development network has led to the establishment of global R&D and marketing centers in key cities like Shenzhen, Shanghai, Hefei, and Hong Kong, forming a solid backbone for future advancements.

To date, Shi Chuang Yi has invested over 900 million CNY in R&D efforts, ensuring that their talent pool remains strong and focused on innovative product releases.

05.

Focusing on a trillion-yuan storage market

Achieving a hundred billion Yuan production value in five years

The advancements reflect Ni Huangzhong's commitment to homegrown innovations, reiterating that all Shi Chuang Yi products are designed under self-research standards before market release.

Since Ni entered the storage market in 2008, the landscape has dramatically transformed, especially during this significant era marked by massive data growth.

The rise of cutting-edge technologies like AI, robotics, and smart automotive solutions provides fertile ground for innovative storage solutions, making storing data the backbone of computing advancements.

Amidst the rapid developments, Ni maintains steadfast dedication to product excellence and innovation

Shi Chuang Yi aims to become a top-tier supplier of storage chips and solutions for the future of technology.

Plans for the future include developing products aligned with AI applications, emphasizing DRAM and LPDDR5 technologies, as well as pursuing advancements in PCIe 4.0 and 5.0, USB 4.0 protocols.

In conclusion, as the storage chip market approaches a trillion-yuan scale, alongside continual technological iterations, the future appears bright for Shi Chuang Yi, a company on the path to achieving its ambitious market aspirations.

06.

Final thoughts: Storage market rebound

Domestic players set to leverage burgeoning opportunities

The storage industry has faced its fair share of ups and downs, with key players like Shi Chuang Yi effectively navigating transformational phases, from toy manufacturing to self-developed integrated circuits, solidifying their positioning within China's semiconductor arena.

Ni's perspective is one of optimism, underscoring the intrinsic value of maintaining hope in the face of setbacks, particularly within the semiconductor landscapeThis optimistic approach fosters resilience in what can seem like an overwhelming environment.

With current market trends indicating recovery, Shi Chuang Yi looks to capitalize on its technological prowess to create innovative storage solutions that will meet the evolving demands of contemporary applications.

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