20 years of restarting life

Chapter 3756 Mills' Proposal for the 12-inch Facility
As someone who once leaped out of the water, Zhao Chang'an knows that what Mingzhu considers right now may not mean she won't regret it in the future.

Twenty years later, SMIC is still the number one wafer fab in China.

TSMC can be considered the world's top-ranked wafer foundry.

In this respect, Mingzhu's judgment is indeed accurate and sharp; one has to admire her.

However, in Zhao Chang'an's previous life, SMIC was still slightly lacking compared to the world's top wafer foundries.

TSMC is indeed amazing, but it's a bit like a disobedient child in the family, lacking a grateful heart.

The goal of Zhao Chang'an's wafer fab in this life is to make it the world's number one.

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Just as Zhao Chang'an had predicted, DeWeiner and Mills were full of praise for the hospitality in Jiangcheng and were very satisfied with the local pool of scientific and technological talent.

Ericsson Vice President Cordwina clearly stated that in addition to expressing a sincere willingness to cooperate on technology licensing such as 3G, Ericsson is considering investing in a joint venture if the wafer fab is located in Jiangcheng and Jiangcheng can also show sufficient sincerity.

Meanwhile, Siemens' Vice President of Advanced Packaging Technologies and Services, Mills, also stated that he had contacted the company and believed that if Jiangcheng could offer sufficient incentives, they could consider building a factory in Jiangcheng.

To put it simply, both companies saw the rapid development of China's economy and the huge demand gap in the chip industry. If they could build wafer fabs with relatively little capital, such a good deal with preferential policies, market opportunities, and low investment costs would be something only a fool would refuse.

"While the 8-inch wafer fab remains the most advanced in China, as far as we know, SMIC is preparing to build a 12-inch fab, which is also the mainstream product for the next stage of mid-to-high-end market demand. If the decision is made to build an 8-inch fab in Wuhan, then this judgment also means that there is a high probability that a 12-inch fab will be built soon. Given this, if the local support is strong enough, why not build a 12-inch fab in one go?"

Mills said, "This is just my personal opinion, and even if I bring it up, the head office is very likely to object. But since such a good opportunity is here, I have no motivation to say anything if I don't speak up."

Mills' words caused an uproar in the small conference room of the five-star hotel, including among the members of the Siemens team.

Zhao Chang'an understood what he meant, but the investment in an 8-inch wafer fab was already enormous. Even if Zhao Chang'an wanted to build the most advanced 12-inch wafer fab, he really couldn't raise that much money even for a nanometer.

The planned 8-inch fab in China is expected to require an investment of $10 billion.

A basic 12-inch fab requires an investment of at least $10 billion. Since Siemens is going to build a factory in China, it certainly won't resort to such a simplistic approach.

Zhao Chang'an had previously asked the company's accounting department to calculate that, according to the minimum configuration standard that Siemens would agree to for building a 12-inch wafer fab in China, the investment would be at least $20 billion.

The investment has doubled!
The 8-inch wafer fab that Zhao Chang'an wants to build this time is expected to have a total investment of US$1 billion, of which the equipment cost is about US$700 to 800 million. According to Jiangcheng's current financial resources, Zhao Chang'an estimates that with the relevant policies on encouraging the development of the software industry and the integrated circuit industry, the equipment procurement subsidy can be up to 20%, which is about US$150 million.

This way, the total investment would only be $8.5 million, with a single nanometer investment of $4.25 million, which would allow for equal shareholding.

However, if it wants to obtain more policy support, it needs to take a controlling stake, requiring a minimum investment of $4.5 million.

This amount of money is indeed substantial, but even scraping together a one-nanometer nanometer can be done. However, if a 12-inch fab is to be built, the investment for a one-nanometer nanometer would be at least $9 million, leaving Zhao Chang'an with $4 million that he simply couldn't steal.

So far, although the entire OneNanometer system is developing rapidly, it also owes a huge amount of money. Apart from RIM Zhao Chang'an mortgaging a portion of his stock holdings, all other assets of the company have been mortgaged.

He even resorted to illegal methods like secondary mortgages to raise money.

Now, if he wants to raise at least another $4 million, he must pledge his remaining RIM shares as collateral.

For the current OneNano Holdings Group, RIM is its biggest asset and its greatest asset. Now, with countless greedy eyes on Wall Street watching it, Zhao Chang'an would never risk taking these shares.

Zhao Chang'an looked at Mills, and he even suspected that Mills might have been commissioned to set a trap for the RIM shares he held.

"We have to take things one step at a time, and the same goes for businesses. Not just now, but even several years from now, let alone 8-inch wafer fabs, even 6-inch wafer fabs will still have a lot of market purchasing power. So I think we should stick to our original plan, at least for now, and only talk about 8-inch wafer fabs."

Zhao Chang'an voiced his opposition, believing that, at present, an 8-inch fab was the best option.

"If the investment is $25 billion, the equipment for the 12-inch fab will account for an even higher proportion of the investment, reaching 80%. If Jiangcheng can provide a 25% subsidy for equipment procurement, then $5 million can be saved on this $25 billion investment. Jiangcheng can provide that now, but if the joint venture starts the 12-inch fab in two or three years, it is very likely that it will not be able to get such good support."

However, Mills persisted in his idea of ​​building a 12-inch fab.

"$25 billion?"

Zhao Chang'an clicked his tongue in astonishment. Mills' words implied that $20 billion was not even worth considering.

To qualify for the 25% equipment procurement subsidy, the minimum investment for one nanometer would be over $10 billion.

Moreover, based on economic development over the next two years, the final investment will definitely exceed $25 billion.

Zhao Chang'an had already racked his brains to raise $4.5 million; where could he possibly get at least another $5.5 million?

The meeting did not last long. The current situation is that all three parties have generally agreed to build a factory in Jiangcheng. The disagreement was raised by Mills, who wanted to obtain more of the 25% equipment subsidy to start the world's most advanced 12-inch wafer fab.

Seeing Zhao Chang'an's opposition, Mills realized that he couldn't reach a consensus on the matter and said he would suggest to the company that they discuss other terms after receiving a response.

Zhao Chang'an returned to his room somewhat bored, inwardly cursing Mills for being so greedy. He actually wanted to start a 12-inch wafer fab just to get the 25% equipment purchase subsidy from Jiangcheng.

It's not that the 12-inch fab is bad, but it will disrupt the goals and schedule that Zhao Chang'an and OneNano had planned beforehand, making the previously relatively relaxed financial situation suddenly become extremely tight, just like before September last year.

Since the three parties cannot reach a consensus, tomorrow's discussion with Ji Chengyong will only involve each party expressing their own opinions.

Zhao Chang'an's opinion remained clear and firm: to build an 8-inch wafer fab.