Dear Comrade

Dear Comrade Leader, Episode 171

“It’s a technical collaboration… … North Korea… … No, what percentage do you think the Republic of Korea local recruitment is?”

At the word ‘technical cooperation’, Yang-Heon Jeong calmed down his shock for a moment and asked with a mixture of caution and a bit of caution.

It was because he was thinking in his heart, ‘What and how much do I have to teach these people to attract investment and save technology transfer’.

After his last visit to Shanghai, he became interested in North Korean business and had measured the current level of North Korea’s industrial technology through reports from joint ventures such as Hyundai Heavy Industries.

There was a limit to finding out because there were so many secrets in the amount of money spent, but the conclusion he made at the planning office was that ‘the shortest 3 to 5 years and the longest 10 years are behind Korea’s level’.

It’s only been 10 years since reform and opening up, so no matter how much the national leader jumps up and down, it’s natural if it’s natural. In particular, the semiconductor field was only in its infancy.

I heard that it is possible to independently produce only silicon wafers with the technology accumulated while producing solar panels, but semiconductors are made only when ultra-fine nanometer level integrated circuits are placed on the wafer.

Technology Although it is called ‘cooperation’, it must be the level that modern electronic engineers that they manage should teach as if they were teaching students from the beginning.

In other words, from the perspective of Jung Yang-heon, even if the other side promised a large amount of initial investment, it was judged that the joint venture could take the initiative.

In the case of foundry technology, the key to productivity, that is, yield, which ultimately extracts good products, is the key.

In a word, it is to pass on the basic know-how of this semiconductor in return for the investment from that side, but if it is not a fabless specialized in design, but a foundry, it is possible to quickly pass it on to that side that is rushing with full support from the state in a relatively short time.

However, even such a foundry is unable to provide technical cooperation (written as and read as unilateral transfer) as a bait for investment… … I was thinking that the calculation of the balance was not right.

‘It’s not our modernity, the entire Korean semiconductor industry has suffered tremendously in accumulating technology and getting to this position. Even the Japanese who ridiculed that Korea can’t do semiconductors even after waking up from death, and the American Yankees who are crushed by capital and preemptive technology. After overcoming all of that, they are barely entering the global market, but are you going to spend a lot of money and take the patents and data you’ve worked so hard for?’

As an entrepreneur, you should always think about the minimum cost and maximum efficiency.

In that sense, Jung Yang-heon was quick enough to make a decision in his heart as a lumber for his father, Jung Moon-yeong, to entrust to modern times after his death.

And he concluded that it would be best for the new joint foundry company to start with North Korea to make up most of the workforce of modern electronics engineers as much as possible, and to let North Korea take only the company name, stake, and dividends.

… … Yang-heon Jeong, who was shaking his head like that, heard an answer that was the exact opposite of his guess.

“As the amount we are investing in this time is large, we will not be able to concede employment. You do not have to worry about the initial investment to purchase the factory site and manufacturing equipment, but 80% of the production workers should be hired by our people.”

“… … There is nothing difficult in the simple quality inspection department, but can you procure full-scale process technology engineers from North Korea?”

“That’s what we should learn from the modern electronics engineers. Our investment condition is that within three years, our North Korean researchers should be able to operate a fab and produce semiconductors without modern help.”

“no… … !”

Jung Yang-heon was temporarily speechless at Jeong-hwan’s impudent request.

Had the opponent not been the supreme leader of a country, he would have immediately left his position and went down south.

‘Actually, I’m going to give it all away. No matter how expensive the initial facility investment, they say they invest a large amount in a lump sum, but isn’t this a bit too much?’

Yangheon Jeong had no intention of giving away all of his semiconductor patents and production know-how for a few pennies, even if Hyundai Electronics, where he was president, was a latecomer not only internationally but also in Korea.

In this era of IT bubble in the United States and ADSL modems in homes in Korea, the modern group’s strategic planning team or anywhere in the IT era to come, 10 or 20 years in the future, the food is semiconductors. Do you mean to give away all semiconductor know-how?

Though he was a bit awake, he thought he was not sure what kind of high added value semiconductor technology could generate in the future because he was born in a communist country.

“I heard from comrade Moon-Young Jung, and he said that he had a dream. He said that his last wish before he died was to produce a Korean car made purely by the Korean people, from one bolt to the engine, in modern times, rather than parts made using Japanese-made robot arms or machine tools.”

“… … ? That’s true, but while talking about semiconductors, why suddenly… … .”

“In the field of automated machinery that produces precision parts, Japan’s Fanuc is the best. In fact, I heard that modern factories spend a lot of money every year to import CNC machines from Fanuc, Japan. If you fulfill my requirements related to the foundry business, I will allow you to import Japanese FANUC technology in return.”

“… … Is that, is it really?”

Being so surprised, Jung Moon-young stuttered for a moment until the end and repeated what he had said.

Isn’t Fanuc famous for its closed and secretive management as well as its excellent technology and operating profit margin?

Even though he was in the electronics business, he was well aware of how he treats Japanese engineers in modern factories to repair Fanuc machine tools, humiliating them.

But can you bring that fanuc technology from the north?

“Damn, how the hell is that possible?”

“I am an outside director of SoftBank Japan’s SoftBank Japan. It’s because we invested a lot in SoftBank’s early days. And since SoftBank took over the controlling stake in Fanuc that Fujitsu held with the money invested in us, it shouldn’t be difficult to put pressure on it.”

Unlike Junghwan, who said it was no big deal, Yangheon Jung, who had already started to worry, looked like he was busy making a profit and loss estimate again from the beginning.

In any case, it is difficult to expect synergy effects from the technology passed down from Fanuc, Japan, to North Korea, which takes a long time to build a foundation to compete in the machine tool market, where there are no large-scale manufacturing companies ‘at present’ and reliability is paramount.

However, it can be a more valuable technology alliance than any other technology for latecomers in manufacturing companies who are busy catching up with American and Japanese companies in the modern era.

In other words, the card Junghwan prepared was for each other to scratch each other’s itchy areas.

“So what the general secretary is proposing is… … It’s like some kind of informal cross-licensing, isn’t it? In exchange for learning the semiconductor know-how of modern electronics from North Korea, we will exert influence over management in terms of governance so that we can bring Japanese machine tool technology… … .”

“At the time of the acquisition of the stake, Fanuc was persuaded that it would be the only joint venture with SoftBank, so it’s only a story here, but so it is.”

‘This… … well worth doing I don’t know if that statement is true… … .’

Yangheon swallowed for a moment.

“… … I am the electronics boss. My brother is in charge of the automobile affiliates. So it seems that there is no direct benefit to me and the modern electronics… … .”

Jeonghwan shrugged his shoulders with a smirk as if he knew everything to Jeong Yang-heon, who was shivering and saying things he didn’t even want.

“ha ha ha… … But isn’t the group president a comrade of Chung Moon-young? Although there are several affiliates in modern times, there is no one in this book who doesn’t know that the things he has the strongest attachment to are construction and automobiles, which he devoted his youth to. And he has not yet officially appointed a modern successor.”

“… … .”

“Even though the group is currently divided into electronics and automobile affiliates, if one of them can fulfill his father’s dream for him, moreover, if that son is a son who cares enough to entrust the group’s stronghold of modern construction and future growth engine, electronics. , wouldn’t he also not want to divide the modern kingdom and pass it on to his son in its entirety?”

As if to emphasize that it was not someone else’s story, Jung-hwan deliberately coaxed Jung Yang-heon by using naked words such as ‘sail bird’ and ‘kingdom’.

Well, in fact, this is also true, and it was because Jung Hwan himself knew all too well that this physiology was no different from the successor of a dictatorship in a three-generation hereditary country or a member of a chaebol family in a developing country.

“And aside from that, anyway, the trend in the global semiconductor market is not IDM (Integrated Device Manufacture), but the division of labor between fabless and foundries. Wouldn’t it be much more advantageous for Hyundai Electronics in terms of yield management to request production in North Korea, which is two hours away from Seoul, rather than outsourcing production to Taiwan across the sea?”

“… … It sure is. We will accept the proposal of the General Secretary.”

“haha… … It’s a wise choice. In the future, there must be a lot of work to be done in this Joseon Dynasty.”

As if he knew that, Jeonghwan got up from his seat and reached out to CEO Jeong Yang-heon to shake hands.

And as if he had already known that the deal would be made, everything went smoothly.

Less than a week after the meeting at the Pothonggang lounge, Choi Seung-il, president of Peony Holdings, and Jeong Yang-heon, president of Hyundai Electronics signed an investment memorandum of understanding.

It took less than a month for the first shovel of the groundbreaking ceremony to be held at the planned site of the factory, which had already been prepared.

And, finally, the year passed, and even from the moment of cutting the ribbon at the groundbreaking ceremony of the first month, Yangheon Jeong was convinced that he had done a memorable business.

‘As the general secretary said, the foundry business is the way to go, whether it’s late or early. Considering that we can reduce the burden of money out of our wallets as much as possible and raise a reliable partner nearby… … It’s never a loss.’

However, at the same time, Jeong Yang-heon gave a congratulatory speech and watched Jeong-hwan descending from the podium, unable to shake the thought that a confident young North Korean leader would have thrown such a win-win to win a subcontractor industry like the foundry.

A foundry basically means taking orders from fabless and producing on behalf of it, that is, essentially, a foundry company is a subcontractor.

Of course, subcontracting is also dependent on subcontracting, so if it occupies a unique position like TSMC, which is growing terribly, even the primary subcontractor cannot do it recklessly… … .

If you really want to make money in the semiconductor business, you have to have a fab facility and produce your own brand.

Could it be that North Korea’s industrial plan conceived by that young dictator is a form of subcontracting SMEs leading the country’s economy like Taiwan?

‘Perhaps you are trying to build up your technology as a foundry and then jump into full-scale semiconductor production. Then in the future, we might be able to compete with modern times.’

But even with that thought, Yang-heon Jeong confessed to himself that it would be difficult no matter how hard he was with that friend.

Korea also started as a latecomer and spent a lot of time and effort to gain competitiveness to compete with US and Japanese semiconductors in the global market.

Isn’t design and development a completely different story from foundry?

In addition, Korea’s successful semiconductor experience was only possible in the 1970s, when demand for semiconductors was still relatively low, and China, a competitor in a similar situation, was deeply asleep due to the Great Leap Forward and the Cultural Revolution.

However, in an era where the semiconductor industry super cycle has begun and the gap between the companies that have dominated the market and the latecomers is sure to widen, if you recklessly rush into independent production, you will end up with a lot of damage no matter how much oil you have.

‘I don’t know about taking over an entire fabless company. But would you let that country’s government take over such a core industry? As much as possible, they will try to save their lives through mergers and acquisitions with their own companies.’

Thinking that it would be impossible unless the world-emergency Great Depression strikes again, Yang-Heon Jung looked at the semiconductor factory in Haeju, which is already rapidly taking shape.

In the meantime, I had only thought that my father would give the money earned by modernity to North Korea, but now that I see it, I think I need to change my mind.

Yangheon Jeong first thought that doing business in the Democratic People’s Republic of Korea (DPRK) would be more suitable for modern development than in Korea (where the common people began to look at the chaebols with pitying eyes) in the case of oil and perhaps even in his own generation.

Of course, this is a business case, but the quality of life is still lower than in Korea in many ways, and it is unlikely that you will live until your death in a place where you do not know when the country will lose the money you have earned.

However, Jung Yang-heon’s thoughts were changed 180 degrees when the final bankruptcy of Hanbo Group, ranked 14th in the business world, was confirmed that month.

A huge typhoon called the foreign exchange crisis began to blow.