20 years of restarting life

Chapter 3689 The Negotiation Stalemate (Part 1)
“I believe in the contractual spirit of European companies. Once Nano North America and Ericsson, as well as other companies, sign a contract, there is no need to follow up too much. Instead, we should pay more attention to investments with uncertainties in the future.”

Zhao Chang'an said, "The company hopes to gain more say and decision-making power from ASML in the future. The importance of this goal is equivalent to Pro seeking partners in Europe."

Subo nodded in agreement. As a Chinese, he felt even more deeply the truth that "backwardness invites aggression."

Don't say that those small countries are backward now, so why don't we see anyone attacking them? Those who say this should look at how Tsarist Russia invaded and eroded the territories of neighboring countries during the Ming and Qing dynasties.

"There is no need to participate in this kind of technological competition between countries. The reason why companies like Intel are so actively forming the EUV-LLC alliance is that there is a right-leaning will of narrow-minded Western supremacist elites like the Brotherhood, which is to demand that control of the semiconductor industry be taken back from Japan."

Mina didn't understand the logic behind Zhao Chang'an's decision and tried to persuade him, "For companies like 1nm North America and RIM, if they needed to purchase lithography machines, whether it was ASML, Nikon, Canon, Hitachi, ABM, NuFlare Technology, TEL, or Sharp—they would swarm around like flies, hoping to buy their machines. They wouldn't need to participate in this strenuous and high-risk process. Of course, if the goal is to profit from holding shares in the short to medium term, is ASML a worthwhile investment? If the investment is done in this way, then you need to use less money to get more shares. If that doesn't work, and you believe the stock will rise, then go to the market to buy."

Zhao Chang'an and Su Bo exchanged a glance. There were some things that couldn't be explained in detail and thoroughly to a pure-blooded German girl of French nationality, and even if they did, she would retort with her argument that "we live in a free market economy now."

“Mina, your argument is based on a buyer’s market environment. For example, for stepper lithography machines with processes above 220nm, production is already exceeding sales, and only top-ranked companies like ASML have enough orders. As for the 130nm process, even the latest TWINSCAN AT:750T, which has not yet been tested by time, has orders booked until May of this year.”

Zhao Chang'an certainly couldn't bring himself to use the concept of 'national competition and security,' since Mina was a Westerner. Instead, he tried to explain the rationale behind OneNano North America's ambitions toward ASML from the perspective of market competition.

"If ASML's immersion lithography technology succeeds in developing processes below 130nm, and after breaking through the 65nm process, continues to approach even the single-digit nm level, leaving Nikon and Canon several generations behind, then at that time, the lithography machine market in the single-digit field will become a seller's market. At that time, the importance of holding shares will become apparent, and if that day comes, the stock price return on current investments will definitely be more than ten times."

"Like Mr. Zhao's investment in RIM?"

Mina asked with a smile.

"Correct."

Zhao Chang'an nodded seriously: "Risk and opportunity always coexist; the greater the risk, the greater the opportunity."

-

That night, Zhao Chang'an chatted with Su Bo and Mina for a while before going to sleep in his room, without going to "nourish" Mina.

It wasn't that he didn't want to, but this passionate and unrestrained French woman liked to shout when she was emotional, and in this quiet winter night, her voice could easily be heard by those who were interested.

The next morning, Zhao Chang'an and Qi Xuan'er, along with Ye Yiyi, went to visit nearby scenic spots. One man accompanied four young and attractive women. Fan Chufei and Qi Xuan'er were together, while Yang Yixin and Ye Yiyi seemed to get along very well. This left Zhao Chang'an alone and feeling a little awkward, as he often had no one to talk to.

Around noon, Su Bo called to report on the morning's negotiations.

ASML is only willing to accept a maximum investment of $3 million in North America for one nanometer, and requires that the funds be received within half a month after the contract is signed. The investment price is required to be calculated based on a total market value of $220 billion.

In other words, by investing $3 million, OneNano North America could acquire a 1.36% stake in ASML. Based on the investment and share exchange ratio, ASML's proposal is quite good. However, since Zhao Chang'an went to such lengths to come here, he certainly wouldn't be satisfied with just this small investment.

Zhao Chang'an's instructions to Subo were still to allocate $10 billion for expansion investment, to be received in two installments.

In the afternoon, in a small conference room at ASML headquarters.

Su Bo, the North American negotiation leader for OneNano, assisted Nan Li, Wang Yu, and Mina, the translator and recorder.

ASML's Head of Negotiations, Executive Vice President, Chief Strategic Procurement and Purchasing Officer Wayne Allen, Vice President of Product Management and Executive Vice President of Applications Christopher, and Head of Legal Affairs Svilak.

After hearing Subo reiterate his demand for a $10 billion investment to be paid in two installments of 4 to 6, Allen knew that Zhao Chang'an still insisted on this demand after Subo reported to him at noon.

Also at noon, the trio had lunch with the company president, Doug, and discussed the negotiations that morning. Doug was not only surprised by OneNano North America's request to inject $10 billion in the form of expanding equity, but also felt a sense of excitement at being recognized.

However, as excited as he was, even he couldn't make the decision to raise $10 billion. If it were only $3 million, it wouldn't contradict the previously approved plan to raise $5 million in the early stages to develop ArFi, and it would also allow for a fair equity stake that neither party would lose.

If ASML were to receive $10 billion from North America, it would have to hold another emergency shareholders' meeting to determine whether or not the shareholders would agree.

This will be very troublesome, and there are no known variables that may arise during the process. As for the shareholders, they can grit their teeth and bear the thought of raising $5 million specifically for the research and development of ArFi.

But if they were to invest another $7 million in this way, they would definitely find it hard to accept.

If companies like Intel make such a request, they would agree even if they were unwilling, for the sake of the company's development. Or, if companies like Intel explicitly state that they will not invest in research and development, these shareholders would also agree to the funding for one nanometer North America.

ASML's stock price needs to be maintained or even increased because it does require a large investment in the research and development of the next generation of lithography machines.

The reality is that the development cost of the prototype is approximately $5 million. Once the prototype is successfully developed, the next step will be for companies like Intel to invest heavily, using the same expansion method to keep the injected funds within the company for continued research and development and the establishment of manufacturing lines, rather than dumping them into the stock market to drive up the stock price and allow these shareholders to make paper profits or cash out and leave for profit.

This approach is good for companies, as it allows them to secure funding. It's also good for investors, as it avoids driving up stock prices and increasing the cost of holding shares by accumulating shares in the market.

However, for ASML's shareholders, there is absolutely no benefit in terms of stock price. The only benefit is that the company's size will increase, and with the support of substantial funds, the company's capabilities may improve, which could boost the stock price.

However, this stock price increase can only happen after the company has made a good use of these investments.

Instead of immediately throwing money into the stock market to accumulate shares and drive up the stock price, allowing these shareholders to immediately gain premium profits.