20 years of restarting life

Chapter 3789 We Need to Find Another Way to Increase the Weight

When Zhao Chang'an saw Mills again, he didn't seem to be in a good mood, and the other four members of his team also looked a bit stiff.

I guess what happened here was reported back to Siemens headquarters last night, and they must have been scolded.

Come to think of it, it's perfectly normal to be scolded. What company sends out a negotiation team that goes against the company's objectives and betrays them?

Of course, as a world-class top talent in chip packaging technology, Mills has a very keen eye for the field. From the perspective of the development of technology and the company's wafer chip industry, this was actually a life-or-death moment for Siemens' wafer business.

If Siemens can build a state-of-the-art 12-inch wafer fab in Wuhan, it will maintain its leading position in the industry for at least the next few years.

However, he overlooked an important issue: in Siemens' overall strategy, not only the wafer chip industry, but even the entire semiconductor field, is just one piece among many in Siemens' game.

The reality is that, with the internet winter still raging, especially in cutting-edge research fields like chip design and manufacturing, there is already a significant competitive squeeze due to overcapacity in wafer and chip manufacturing and packaging.

Siemens excels in industrial automation and machine tools, drive technology, software, smart grids and energy management systems, railway systems, urban rail transit signaling and traction systems, and medical devices.

With so many fields at the top globally, it's inevitable that some trade-offs and separations will have to be made given limited investment resources.

With the emergence of foundries such as TSMC, UMC, and Infineon, starting last year, the concept of 'fabless' IC design companies has been valued and mentioned by many advanced semiconductor companies in the global chip industry. These companies only design, develop, apply, and sell wafer chips, which have the highest returns in the industry, while outsourcing wafer and chip manufacturing, testing, and packaging to professional wafer foundries.

Siemens originally intended to do just that, having previously spun off Infineon, separating its mobile phone manufacturing and wafer chip manufacturing businesses and integrating them into Infineon.

Infineon's recent decision to terminate its contract with Mosilicon after its expiration this year is also an attempt to further deflect the current global wafer oversupply problem, shift the blame for losses to Mosilicon, and at least for now, reduce the number of its wafer fabs.

The main reason Siemens sent an inspection team to Jiangcheng is that OneNano will invest in and hold a majority stake. RIM, a subsidiary of OneNano, is a world-class unicorn company. Siemens has internally evaluated it and believes that it has the potential to surpass Nokia, Motorola, and Ericsson, the top three mobile phone manufacturers in the future. Moreover, China is the world's largest emerging market in terms of mobile phone sales growth. OneNano also holds shares in Excellence Technology, the top-selling Chinese domestic mobile phone brand, and has built a factory in Zhengzhou in cooperation with Ericsson.

All of this indicates that the demand for 1-nanometer mobile phone chips will definitely be substantial in the future, and building a wafer fab can at least guarantee a certain level of sales.

Mosilicon Technologies is far from qualified and stable enough in this respect, because in the event of turmoil or tension, Mosilicon's wafers may even be banned from entering the mainland market.

Another factor is China's support for the semiconductor industry, with equipment procurement subsidies up to 25% back, which is incredibly attractive.

Moreover, it's just building a technologically mature 8-inch fab with limited investment. Considering the investment and incentives from all sides, and with Ericsson involved, even if it's a high-standard fab with an investment of $15 billion, Siemens is estimated to contribute about $4 million. Furthermore, after completion, shares can be transferred and sold to continue promoting the fabless company concept. No matter how you look at it, it won't be a loss.

“We can’t go to Zhengzhou anymore. The company requires us to return to China immediately, and they will likely send a new team over later.”

Mills' eyes were red with anger as he cursed, "These short-sighted bastards!" Zhao Chang'an nodded and handed Mills a cigarette. He didn't ask what would happen if they didn't send a team, because it was obvious that if Siemens didn't send an inspection team afterward, it would mean not only rejecting the 12-inch fab but also the 8-inch fab that they were originally very interested in.

Zhao Chang'an understood Siemens' request for the Mills team to return. Regardless of the next step, Siemens needed to call them back to clarify the offers and attitudes of Jiangcheng, OneNano, and Ericsson before making a decision.

What was originally a sure thing has been turned into a precarious situation by Mills, and it would be a lie to say that Zhao Chang'an is happy about it.

However, at this point, all he could do was encourage Mills' team and stand on their side, because once the news that "Jiangcheng is going to build a 12-inch wafer fab" had spread throughout the country, it had even blocked the path back to 8 inches for Jiangcheng itself.

If cooperation is not possible, then the next step is for both parties to find a suitable reason. The best solution would be to first build a chip packaging plant with an investment of only a few hundred million US dollars, and not mention or do anything about the 12-inch wafer fab. Instead, they would say that they would build the chip plant first, and then start the wafer fab in the second phase. This way, both parties would have a way to save face.

Siemens will certainly cooperate, after all, China is an important market for them.

“I suggest we continue our discussions with Jiangcheng today. This way, Mr. Mills, your team can take these terms back to your company for reference before making a decision.”

Zhao Chang'an made the suggestion.

"Yes, yes, I think what President Zhao said makes a lot of sense."

Tang Juqin led a group of people from the Optics Valley Development Zone to the hotel before seven o'clock in the morning. When she heard Mills' words in the hotel lobby, she almost fainted and fell to the ground. The Optics Valley staff members who were with her also turned pale.

Throughout the journey, Tang Juqin forced a smile on the surface, but inside she was in agony. On one hand, she was terrified that such a large investment might not be secured. This was the largest investment that she and the development zone could possibly obtain in the past and future, and it would also mean that a world-class, cutting-edge, and advanced factory would be located in the development zone. This would be a great regret for her, the entire development zone, and even Jiangcheng and Hubei Province.

If this world factory can be established in Jiangcheng, it will play a vital role in attracting investment, upgrading and transforming industries, and boosting the industrial chain in Jiangcheng and even the entire province.

But overnight, the world could very well change!

She didn't even know that last night, Boss Ji had asked her to call his secretary every hour starting at eight o'clock this morning to report on the inspection team's progress. Eight o'clock was approaching soon, and she couldn't bring herself to make that call.

Zhao Chang'an's words filled her with excitement, like seeing the platform she was heading to through a thick fog, because there was still a chance, and that chance was the genuine sincerity that Jiangcheng could express in the past few hours.

From Mills' perspective, he certainly hoped to build a 12-inch fab in Jiangcheng. However, after receiving a stern reprimand from his company late last night, ordering his team to immediately terminate all negotiations and return home, he was already pessimistic about the project's success.

However, it seems that Jiangcheng is making a final effort, so they agreed to continue the talks, giving Jiangcheng a chance, and also giving themselves and Siemens a chance to continue leading the chip industry in the future.