Reborn Entrepreneurial Giant.

Chapter 271 SMIC Problem

An old man and a young man sat opposite each other, watching the flowers blooming and falling in front of the court, and the clouds rolling and relaxing in the sky.

The CEO of SMIC is Zhang Yujing. He is busy fighting lawsuits and improving advanced manufacturing processes. In short, he has many things to do, so it is Chairman Jiang who communicates with Qu Li.

In fact, the matter between Wuhan Xinxin and SMIC is not complicated. Although SMIC can acquire the Wuhan Xinxin 12-inch wafer fab at the original price within three years, the current total investment in this wafer fab is about US$15 billion. Now there is basically no output, and SMIC itself is losing money. Where will the money come from for acquisitions?

SMIC did not invest in Wuhan Xinxin, so it later abandoned the wafer factory after it ran into difficulties. After many twists and turns, it became the world-famous Yangtze River Memory.

Qu Li and Jiang last week did not have a formal discussion, so they just chatted. They talked about the difficulties in developing Huahong and SMIC; Qu Li talked about the hidden worries of Jumei and Glory.

"Oh, I remember, someone above suggested that Vision invest in SMIC, but you finally refused?" Jiang Zhou seemed to have thought of something.

"..." Qu Li was depressed. Is the timeline accurate? Didn't he refuse it after Datang took over SMIC?

"Are you not optimistic about SMIC, or is it for some other reason?" Director Jiang continued to ask

"I'm not very smart and I can't understand the logic behind overtaking on corners. I believe more in long-termism and firmly believe that doing the hard but right thing is..." Qu Li cautiously

"What does this have to do with SMIC?"

"..."

"How come you, mother-in-law and mother-in-law..."

"Isn't it obvious what I just said? In my eyes, the current SMIC is not a good company. There is nothing wrong with the scale of the company and the need for cash and technology. But with good equipment and technology reserves, SMIC can Can the theoretical technology be converted into cash income? How big is the gap between the yield rate and TSMC? The advanced process cannot match it, and the yield rate of mature process cannot match it. Where is the comparative advantage?" Qu Li said a lot in one breath

Jiang Zhou had heard a lot of good things, and was a little heartbroken when he heard Qu Li's words at first, but he was not an ordinary person after all, so he knew that these were Qu Li's true thoughts, which were at least partly in line with the facts.

SMIC has developed rapidly in recent years and has implemented the 45nm process. In January this year, it obtained an equipment export license for the 32nm process.In just a few years, we have five 8-inch chip factories and four 12-inch chip factories. Calculated based on investment of US$8 million and US$15 billion respectively, a total investment of US$140 billion is required, not counting other supporting and operational management expenses. .

But SMIC’s annual revenue is about US$10 billion, and selling SMIC is not even worth that much money. Why can’t we just calm down and make steady progress?

"Enterprises that make money and cannot achieve profitability in market competition do not have long-term value..." Qu Li and Chairman Jiang discussed last week

The patent lawsuit between TSMC and SMIC is very interesting. Basically, the market was passively beaten, and the lawyer was blindly optimistic. When interviewed, he believed that the probability of winning was very high. However, in the end, it failed miserably in the United States and had to settle with TSMC, paying compensation of US$10 million plus [-]%. shares, and Zhang Yujing’s resignation.

Maybe the two communicated for a long time. SMIC CEO Zhang Yujing came over to understand the situation. Qu Li mentioned the lawyer's problem. If he were responsible, he would definitely find a way to drag out the lawsuit for ten or eight years. For example, Oracle sued Google for Android infringement. The Java patent case lasted for ten years.

"Your lawyers are really incompetent. They don't pay attention to the actions of competitors at all, and they don't pay attention to the social environment." Qu Li talked about the efforts behind Vision Investment's acquisition of Spansion Semiconductor and Spreadtrum's acquisition of Freescale Semiconductor. During the financial crisis In the context of the epidemic, we must also find ways to prevent their attention from focusing on sensitive directions.

"TSMC's lawyers used the two acquisition cases of Vision and Spreadtrum to heighten public opinion's concerns about the development of Zhongguo Technology, and put pressure on judges and jurors through the outside world..."

"Is there such a thing?" The two of them were shocked.

"..." Qu Li remained silent, his vision was not broad enough.

"It's not that we don't believe you, it's mainly because the impact of this matter is too great."

"If you are reluctant to spend money to delay this lawsuit and get a better lawyer, you may encounter extreme circumstances."

In history, Zhang Yujing publicly said in an interview that their lawyer misjudged the formality. This is not Qu Li's nonsense, but SMIC's attorney is really bad.

"Yu Jing, how about we change a lawyer?" Chairman Jiang

"We are in a lawsuit. It would be bad to change lawyers at this time. How about not letting them pay attention to this matter..."

"This is a matter of ability, or it may be an attitude issue. As professionals, will they break the pot after being reminded by outsiders? They make fatal mistakes in key positions. I dare not use such people a second time." Qu Li Persistence, I really don’t want idealists to fail, the existence of SMIC is really valuable.

"Yeah, no matter what the reason is, since something happened..." Chairman Jiang didn't know why, but he felt an inexplicable trust in Qu Li at this time.

"Then what should we do?" Zhang Yujing is a "master of factory construction" and has management capabilities, but he is not a master of strategy.

"Find a well-known law firm in the United States that specializes in intellectual property cases, drag the matter out, replace people, and spend money to lobby..." The conventional plan that Qu Li said is not illegal but wastes money.

The lawyer's matter quickly came to an end. SMIC has actually given up on flash memory manufacturing and focused on other foundries such as DRAM. Wuhan Xinxin's matter is not a big deal.Vision Holdings is the controlling shareholder of Spansion Semiconductor and the major shareholder of Infineon. It is obviously very determined to invite a big man like Yang Shining to join.

When it comes to the foundry industry, TSMC ranks first, UMC seems to have insufficient stamina, GlobalFoundries is coming fiercely, and SMIC’s third position in the world is difficult to maintain.

"You have underestimated Samsung Semiconductor. They have a high probability of becoming the second largest company in the world." Qu Li took the vaccine

"Samsung's foundry business is not good, it is not as good as SMIC." Zhang Yujing is confident

"We never dwell on the current situation when judging a matter, but look to the future. As long as Samsung wants to develop semiconductor foundry, it can import the most advanced technology and equipment and recruit the best talents in the world. We are eyeing a key TSMC Technical talents were taken advantage of by Samsung Semiconductor..." Qu Li boasted

"Who?"

"Hard to say."

"???"

"There are also market issues. Mobile phone chips require advanced processes to achieve high performance and low power consumption, and this trend has nothing to do with SMIC..." Qu Li's words are a bit unpleasant, but everyone who has been there knows that even low-end chips will use advanced Process.

"I think that instead of blindly pursuing advanced processes, SMIC should find ways to make money for itself, be better than TSMC in the mature process market, and then wait until it reaches a critical value before counterattacking..." Qu Li said According to the information he obtained, TSMC jumped from 40nm directly to 28nm, and then to 14nm. In this way, it can quickly occupy the high point of advanced manufacturing processes, but indicators such as transistor density have not kept pace with it.

What Qu Li said is not unreasonable. Before ASML's EUV lithography machine came out, many companies believed that advanced process technology was about to reach its peak, and it was the EUV lithography machine that broke the upper limit.Let TSMC reach the peak first, and SMIC rely on lower costs and higher efficiency to defeat its opponents. This may not be a good way, maybe it is the only realistic way.

But entrepreneurs may not necessarily be able to accept this so-called good approach. They feel that Qu Li looks down on them. Some people will not look back until they hit the wall, and some people will not look back after hitting the wall.Very good entrepreneurs may be able to create miracles again and again, who knows?