Rekindle 2003

Chapter 1169 I wonder how Qing Yun can resolve this situation!
Zhang Zhongmou paused, as if waiting for Jiang Shangyi's reaction, and then smiled, "The essence of business is to see the truth and create illusions.

As the commercial society develops today, technological advancement is no longer the only factor in winning the market.

The ultimate success of a business is a comprehensive and complex result that involves multiple dimensions, of which technological advancement is only one aspect.”

Zhang Zhongmou walked to the window, looked at the busy factory outside, and said calmly,
“Of course, I must admit that the profits gained from technological advancement are the highest.

However, this does not mean that other methods cannot generate profits, nor does it mean that technological advancement will ultimately win.”

At this point, he shrugged his shoulders and said, "For example, Iridium, which went bankrupt a few years ago, originally wanted to achieve the integration of television and telephone through a global satellite communication system.

But it failed in the end because it was too advanced and exceeded the purchasing power of people or the times."

"So, since we cannot obtain advanced processes for the time being, we will strive for mature processes."

“Shangyi, the most mainstream process at present is still the three generations of 0.18 micron, 0.22 micron, and 0.250 micron.

Even the 1-micron process has the largest demand in the market, still accounting for 12% of the total. I believe that at least 0.18-micron will not be obsolete in the next ten years.”

"It is the benefits of these generations of process technology that account for 97% of the industry's current sales and 83% of its profits."

Zhang Zhongmou lit a cigarette and smiled, "Advanced process products, which account for 3% of sales, have earned 17% of the industry's profits, which sounds like a high profit margin.

But, Shangyi, you have to remember that profit margin does not represent profit amount. "

At this point, Zhang Zhongmou showed a sneer on his face, and his tone was a little fierce, "Since the cherry blossoms are not prepared to let us live, they can't expect to live comfortably either!"

His eyes flashed with determination, as if he had seen the future victory, "We will directly start a price war on these generations, making the entire industry unprofitable, and let them die with the profits brought by their 3% sales!

The yield rate is there, and the income from advanced processes alone cannot support a company."

This resolute voice made Jiang Shangyi understand that Zhang Zhongmou's words were not a discussion with him, but an order that must be executed.

Zhang Zhongmou walked up to Jiang Shangyi and patted him on the shoulder gently: "Shangyi, I know this decision is difficult, but this is our only way out."

Jiang Shangyi's eyes gradually became firm, and he finally understood Zhang Zhongmou's good intentions.

Currently, Yiji Semiconductor has completely lost the ability to make further progress in research and development due to the large and rapid loss of research and development talents.

If we want to recover, it will take several years to rebuild the team.

Given the current situation they are facing, giving up advanced processes is like cutting off one's own arm, and only by doing so can they survive.

Therefore, the right choice is to focus on mature processes like GlobalFoundries.

He looked at Zhang Zhongmou with admiration and nodded to indicate that he understood and would arrange it right away.

but……

Jiang Shangyi hesitated for a moment and asked Zhang Zhongmou: "What about top R&D talents like Sun Yuancheng, Yang Guanglei, and Yu Zhenhua?"

These three people are logic process integration experts and packaging experts, and they all have small teams behind them. Not only would it be a waste if they were idle, but the key is that they are likely to not be retained.

To a certain extent, it is not money that drives them to their current positions, but career.

Zhang Zhongmou sighed and shook his head, with a hint of helplessness in his tone, "It would be best if we can convince them, and let them wait for the right time and wait for ASML's immersion lithography machine to come out.

It doesn’t make sense… If it rains, my mother will remarry. There’s nothing anyone can do about it.”

His eyes were full of determination. "Shangyi, think about it, given our current situation, if we continue to invest in advanced processes, not only will we fail to achieve technological breakthroughs, but it will also further aggravate our financial difficulties.

Focusing on mature processes can not only stabilize our cash flow, but also help us gain a foothold in the market.

Our goal is survival, not blind pursuit of technological leadership.”

Jiang Shangyi sighed upon hearing this, "I know, there's nothing we can do about it."

After reaching a consensus, Zhang Zhongmou asked Jiang Shangyi, "How is the process progress at Yanhuang Group? Any news?"

There was a hint of urgency in his voice, as if he was expecting something.

Jiang Shangyi shook his head bitterly and said, "I can't find out. The security measures of Yanhuang Group are too strict. The people we poached seem to have evaporated from the face of the earth. We can't contact them at all."

Jiang Shangyi felt that there was no need to think about any answer to this matter.

This has nothing to do with whether the Yanhuang Group is a state-owned enterprise or a private enterprise.

Given the current level of emphasis on semiconductor talents in China, this group of people must be closely protected by the Chinese government.

Zhang Zhongmou's face turned ferocious in an instant, and the more he thought about it, the angrier he became. The reason why he ended up in this desperate situation today was entirely because of that bastard Qing Yun.

He sneered and said, "Shangyi, I heard that the inland areas are paying a lot of attention to semiconductors, right?"

Jiang Shangyi nodded, "Yes, Director Zhang, the importance that the mainland attaches to the semiconductor industry is beyond our imagination.

The government not only provides strong policy support, from tax incentives to scientific research subsidies, to help industrial development in all aspects, but also actively guides the flow of funds and encourages companies to increase their investment in research and development.

Private capital has also poured in, and market enthusiasm is high, as if the entire country is trying its best to make a great comeback in the semiconductor field. "

Zhang Zhongmou sneered and said, "Just relying on them? How dare you!
Shangyi, both the 0.6-micron and 0.35-micron process technologies are shipped at cost price. We don’t want any profit from this.

At the same time, we need to adjust our strategic focus.

You organize us to go to Jianye, Pengcheng, Yangcheng, Jincheng, Chang'an, and Jiangcheng to lobby the local authorities. We will build six more wafer fabs in the mainland, referring to the model of the Huating 8-inch fab you discussed two years ago. They will provide the funds, and we will provide the technology, and we will form a joint venture!"

Zhang Zhongmou's voice was full of ruthlessness, as if announcing that a new battle was about to begin. He continued,
“Shangyi, think about it, if we can build wafer fabs in multiple cities in the mainland, we can not only take advantage of local funds and policy support, but also form economies of scale and further reduce costs.

In this way, even if Yanhuang Group makes a technological breakthrough, it will not be able to gain a foothold in the market due to our scale advantage.

We want to defeat them through scale and cost, rather than simply competing in technology.

I want to block the development of Yanhuang Group in semiconductors. Don’t look at how happy China is now. As long as we destroy Yanhuang Group, the chain leader, they will have no choice but to kneel down. "

In response to Zhang Zhongmou's proposal to adjust the strategic focus to open wafer fabs in the mainland...

Jiang Shangyi frowned, as he knew very well Zhang Zhongmou's intention. He was simply eyeing China's cheap labor and huge market.

However, Jiang Shangyi knew deep down that this strategy was not a wise move and the possibility of success was slim.

After looking at his old partner hesitantly, Jiang Shangyi couldn't help but speak cautiously.
"Chairman, you don't know that the situation in the inland area is no longer what it used to be.

Today, they have passed the most financially strained phase, with the tentacles of capital extending in all directions. They are no longer simply craving for external injections of technology and funds.

Moreover, there have been significant changes at the policy level. New regulations clearly stipulate that the proportion of intangible asset contributions shall not exceed 20%, which is undoubtedly a great restriction on our traditional cooperation model.

More importantly, private capital in the mainland is now very active, and their enthusiasm for the semiconductor industry is high, and they are no longer dependent on external forces as in the past. "

He actually wanted to say that Zhang Zhongmou's impression of China seemed to be still stuck in a few years ago, but in fact, the environment for developing semiconductors in China is no longer the same as it was before.

The situation on Izuku Island at that time was that private capital was deterred from investing in the semiconductor industry, and the development of the industry relied entirely on strong administrative power.

But today in China, led by technology giants such as Yanhuang Group and Huawei, their investment in the semiconductor field is generous and unreserved.

After 20 years of reform and opening up, China has completed the original accumulation of industrial capital, and capital is actively looking for new investment outlets.

In Jiang Shangyi's opinion, the impact brought about by the appearance of Mr. Yanhuang far exceeds the establishment of the Yanhuang Group itself.

The timing was so clever, it happened to be the recovery period after the bursting of the Internet bubble. When China was standing at the crossroads of economic and social transformation, the young president relied on his own example of rise to lead private industrial capital towards industrial upgrading, rather than blindly following the Internet industry boom in the late 90s.

Today, the myth of wealth creation in Chinese society is no longer limited to prodigies and tycoons in the Internet field, but has turned to technology companies with greater tangible value.

The annual profit scale created by Yanhuang Group has far exceeded people's imagination.

The contrast between Internet companies like Zhang Chaoyang and Cheng Tianqiao, which have annual profits of hundreds of millions, and technology companies like Yanhuang Group, which have annual profits of over 10 billion, is too obvious.

This sharp contrast completely broke people's cognitive ceiling.

As concepts change, people's appetites grow and their expectations for the industry rise.

For local governments, companies like Yanhuang Group, which can easily acquire thousands or tens of thousands of acres of land and solve the food and employment problems of tens of thousands of local people, are good companies.

Thinking of this, Jiang Shangyi sighed, "Chairman, although I also feel very uncomfortable, we must face up to the changes in the domestic market and cannot just stay in the past cognition."

Zhang Zhongmou's face darkened slightly when he heard this. He actually knew that what Jiang Shangyi said made sense.

In the information age, news circulates far more frequently than before, and he is not completely unaware of the change in the domestic wind direction.

However, the obsession of not wanting to admit defeat in his heart made it difficult for him to accept this fact.

Shaking his head slowly, he cursed softly, "Fuck it!"

Then, with a hint of cruelty in his tone, "We must not let them get this momentum!"

Jiang Shangyi nodded in agreement.

Although the specific progress of the Yanhuang Group in the semiconductor industry is a mystery to them, the trends in the mainland academic community are not without trace.

Those projects that were once forced to press the pause button due to funding, technology or policy limitations are now being restarted, which is undoubtedly a dangerous signal.

"Chairman, the latecomer advantage should not be underestimated. They can avoid the detours we have taken and directly innovate and make breakthroughs based on our foundation, which can save a lot of time and resources."

Jiang Shangyi explained further, trying to make Zhang Zhongmou see the severity of the situation more clearly.

Zhang Zhongmou hesitated for a moment, as if he was weighing the pros and cons. Finally, he rubbed his nose and seemed to have made up his mind.

"Then we can also provide some funds and equipment, that's fine, but remember, we want controlling rights. This is essentially a business. We are using their funds and human resources to hatch our eggs."

Jiang Shangyi was well aware of the complexity and risks involved. He spoke cautiously, "I'm afraid not. America and the authorities have controls in this regard."

He paused and continued, "Besides, once we invest in the technology, China will be able to learn it in less than two years.

Once technology is spread out, it is like spilled water, difficult to take back.

What's more, there are equipment, which are materials that are strictly controlled.

Whether it is lithography equipment, etching equipment, or supporting equipment related to chemical vapor deposition, these are all strictly prohibited by the Wassenaar Arrangement.

Once the money flows into China, not only will our technological advantage disappear, but Yiji Semiconductor will also be in a passive position and even face the dual pressure of international public opinion and policies, which will not be worth the loss. "

Zhang Zhongmou shook his head slightly, with a meaningful smile on his face.

"Shangyi, there is an information gap here, and you may not be clear about it.

America has actually relaxed restrictions on China.

I have confirmed information that Intel has transferred a batch of technologies to the Yanhuang Group.

The latest date of this batch of technologies is 1994.

According to this timeline and the spirit of the Wassenaar Arrangement, we can completely produce the 1993-micron process introduced in 0.35 in China without worrying about America’s long-arm jurisdiction.”

He paused, a gleam in his eyes, "And half a year ago, China's technology level was still at the 1984-micron level in 1.25.

Even if they can adopt leapfrog development, it is impossible for them to complete the leap from 1 micron, 0.8 micron, 0.6 micron, and 0.35 micron processes in just one year.

At this point, he laughed out loud, "What's more, they are still using the 436nm G-line light source, and it is a contact path."

Jiang Shangyi also smiled after hearing this.

This is an old road they have walked before and is very familiar to them.

In the contact path, the mask is directly attached to the silicon wafer for photolithography, which is not only prone to contamination, but also has a relatively short service life of the mask.

Later, proximity lithography technology improved this by forming a thin air cushion between the mask and the silicon wafer so that the two were no longer in direct contact, thereby improving the yield and increasing the life of the mask, which greatly reduced costs.

However, the existence of the air cushion will affect the accuracy of imaging, so the highest process of the G-line light source can only reach 0.35 micron process.

The next generation of the G-line light source is the I-line light source with a wavelength of 365nm, and its highest process technology can reach 0.25 microns.

To develop further, the third-generation light source must be adopted, that is, the KrF (krypton fluoride) excimer laser with a wavelength of 248nm, which can achieve a 130nm process.

As for the fourth-generation light source, it is the most advanced 193nm ArF (argon fluoride) excimer laser.

According to Lin Benjian's theory, this light source can theoretically advance the process to 22nm through immersion technology. Sun Yuancheng even speculated that it could be even lower based on David Mann's repeated exposure theory.

Zhang Zhongmou shrugged his shoulders with a strong disdain in his tone, "It took us a full 16 years to get from Line G to Line I.

Even if China has the so-called latecomer advantage, it is impossible for them to reach that level of technology in just half a year.

Moreover, the semiconductor industry is a highly complex and integrated industry. The manufacture of a chip requires more than 1000 different processes. The entire production system is composed of thousands of different components. One lithography machine alone contains more than 8 precision parts.

However, they are unable to produce most of these components themselves. If any link is stuck, their lithography equipment will not be able to be produced.

So, Shangyi, is it really possible for them to reach 0.35 micron process level in such a short time?

As long as they can't reach 0.35 micron before I go into production, which is a year from now, and at the same cost as me, they have no chance.

Because this is a business!
There is no reason for the market to abandon cheap products and use expensive ones. This is completely inconsistent with business logic.

I built factories in China and brought in state-owned capital with the help of local agencies. So even if we talk about political logic, we will not be excluded.

To be honest, I hope they can talk about politics. We have state-owned assets in it, and Yanhuang Group is privately owned. I don’t think Qingyun can do anything to break this situation! "

Zhang Zhongmou's words revealed a strong confidence, forcing Jiang Shangyi to nod and admit that his worries were unnecessary.

“So we have firmly controlled the key node of 0.35 microns.

In other words, we will not provide them with 248nm KrF krypton fluoride excimer laser lithography technology and supporting process technology. We only produce products with a process of 0.35 microns or above inland.

So even if they steal or forcibly seize our equipment and technology, what practical use will it be?"

A hint of ruthlessness flashed across his eyes, and Zhang Zhongmou sneered, "Shangyi, my goal is very clear, which is to drive down the prices of the three process products of 0.8 micron, 0.6 micron and 0.35 micron to a bargain price, and use our huge scale and cost advantages to completely bring them down.

There is no industry in the world with lower production costs than in the mainland. As long as we firmly occupy the mainland, we can be invincible in the world.

After that, it's just a matter of waiting for the right time! As long as we are alive, anything is possible!"

……

(End of this chapter)