Reborn since 1993

Chapter 1169 The Transformation of the Dragon and the Serpent
With SVG as its backing, Dongxin Semiconductor can now operate with confidence and without being subject to American restrictions, at least in the short term.

Not only does the acquisition of MIPS provide access to the MIPS architecture, but it also allows for the commencement of preparations for Dongxin's listing on Nasdaq.

After going public, more Americans, Wall Street institutions, and others will be brought onto the Dongxin chariot. That will be the time when Dongxin truly begins its transformation.

Only then can Dongxin truly begin to stand out, instead of being suppressed as soon as it emerges!

Just one day later, Papken boarded a plane to the port city, then transferred to a direct flight to Binh Duong Airport.

Stepping onto the land of Pingyang once again, Papken felt a sense of loss, his state of mind completely different from his last visit.

"plum!"

Upon seeing Li Dongling, Papken gave the philanthropist a hug and then said to him, "We did it!"

"I told you, Papken, you can work miracles, you have brought new hope to the global semiconductor industry!"

Li Dongling also praised Papken without reservation. Afterwards, Li Dongling, Wu Xinyi, Papken and others went to the conference room of the Yuhe Leisure Resort Hotel.

"Papken, this is a gift from Dongxin. I wonder if you like it?" Li Dongling asked Papken after sitting down.

"Of course!"

Upon hearing Li Dongling's words, Papken couldn't help but smile.

The gift Li Dongling mentioned was an order for ten 365-nanometer lithography machines, which Dongxin immediately offered to SVG after SVG passed the vote on Capitol Hill.

Each 365-nanometer lithography machine order from SVG is priced at $2300 million, which is significantly more expensive than comparable lithography machines from Nikon, Canon, and ASML.

However, in order to get SVG to make an appearance in front of the American Capitol and give an explanation, Dongxin Semiconductor did not bargain.

Stimulated by a series of positive news, SVG's previously sluggish stock price suddenly began to rise.

This indicates that some institutions are beginning to have a renewed positive outlook on SVG, which is undoubtedly excellent news for Papken.

Don't assume that Wall Street's optimism is unimportant. In America, if a company is sought after, it can boost more than just its stock price.

Similarly, they can also obtain large amounts of cash through issuing stocks, financing, and bank loans, which can then be used for research and development or even for acquiring competitors.

Previously, due to continuous losses and declining market share, various investment institutions almost abandoned SVG, causing SVG's market value to plummet to less than $700 million!

"Dongxin saved SVG, and this will be forever recorded in SVG's history!"

Papken made no secret of the fact that SVG now needs lithography machine orders from Eastchip Semiconductor. The order for just ten lithography machines is worth more than 230 million US dollars, accounting for about half of SVG's total revenue this year. It is conceivable how miserable Papken's life was before.

Li Dongling nodded after hearing this, then looked at Wu Xinyi, who, understanding the implied meaning, looked at Papken and said, "President Papken, do you still remember the agreement between Dongxin and SVG?"

When Papken first came to Pingyang, he reached a verbal agreement with Li Dongling.

These include the application for SVG to export lithography machines to Dongxin Semiconductor. After the application is approved by Capitol Hill, Dongxin will place an order with SVG and the two parties will exchange equity. Others include SVG awarding some lithography machine assembly orders to Dongxin Semiconductor.

However, these agreements are all verbal agreements. After all, no one knows whether Capitol Hill will allow SVG to pass. If the agreement is signed prematurely, it may become some kind of "evidence". Therefore, the two sides can only have verbal agreements.

Even though it was just a verbal agreement, before Papken left Pingyang, Li Dashanren had Dongling High-Tech North America Group put a $20 million "deposit" into SVG to lobby Capitol Hill.

The subsequent expenditure on SVG was also over ten million US dollars, since SVG was dirt poor and simply couldn't afford such a large public relations budget.

Now that the dust has settled, it's time for SVG to abide by the agreement. It all depends on whether Papken is willing to comply!
Papken could sense that Li Dashanren's gaze was subtly fixed on him, and SVG now held the "initiative."

As the only company in the lithography machine industry currently permitted by the American Capitol to sell mid-range and lower-end lithography machines to ESPN, SVG has essentially obtained a franchise.

Now they are certainly qualified to "bargain" with Dongxin, or make more demands, but it remains to be seen whether Papken has the courage!

Various thoughts flashed through his mind, but Papken finally said firmly, "SVG will abide by the previous agreement and exchange 10% of its shares with Dongxin Semiconductor!"

Papken could choose to back down or demand more leverage, but that would also carry risks. Currently, apart from Eastchip Semiconductor, no other semiconductor company is willing to buy its equipment. If the deal falls through, SVG, which has only just begun to recover, might be kicked back down.

In addition, Papken also witnessed the influence of Dongling Hi-Tech, the parent company of Dongxin, during his lobbying efforts on Capitol Hill, even though Dongling Hi-Tech is located on the other side of the Pacific Ocean.

However, companies like Goldman Sachs and Walden International are lobbying for SVG quite vigorously, which shows that Dongling Hi-Tech also has strong allies in America.

Papken doesn't want these allies of Dongling High-Tech in America to turn against SVG!

Li Dongling had a bottle of red wine sent over, poured a glass for Papken, raised his glass and said, "Papken, you've made yet another of the most important choices in your life!"

If Papken tries to raise the price or break the contract, then the philanthropist Li wouldn't mind letting him know what it means to have some basic martial arts skills!

Putting everything else aside, if things really turn sour, if even one SVG lithography machine could be sold in mainland China, then that philanthropist's surname would probably have to be reversed.

Importing a lithography machine from overseas is not easy, but if Li is really determined, with Dongling High-Tech's current influence, connections, and resources, he has plenty of ways to sabotage any lithography machine order. It would be a shame if this machine even made it to the mainland port.

Papken clinked glasses with Li Dongling. Looking into Li Dongling's eyes, Papken felt a strange sense of lingering fear, as if a wrong choice just now would lead to utter ruin!
The legal staff from Dongxin, along with the SVG executives who arrived with Papken, began negotiating the equity swap agreement.

After taking a sip of his drink, Li Dongling said to Papken, "Once you return to America, you can announce to the American media that SVG has become the major shareholder of Dongxin Semiconductor, and the future semiconductor market in mainland China will belong to SVG!"

"This slogan is truly insane, and I think Wall Street will love it!"

Papken laughed and said that he knew it was a smokescreen. SVG had only swapped 10% of its shares with Dongxin. Becoming the major shareholder was nonsense.

But Wall Street probably loves this kind of slogan, especially the one about taking control of the mainland semiconductor market. It's enough for Wall Street institutions to hype it up and make a killing.

Li Dongling needs Papken to promote the idea in America, ideally making Americans think that SVG has already taken over Dongxin, so that Dongxin can operate under SVG's name without arousing suspicion from Americans!
"Going forward, Dongxin Semiconductor will transfer more lithography machine orders from Dongxin Hanxi chip manufacturing company to SVG."

"However, I also hope that SVG can transfer its lithography machine assembly business above 365 nanometers to Dongxin as soon as possible."

In addition, Dongxin can work with SVG to build a lithography machine industry chain in mainland China, thereby reducing costs.

The two sides can also jointly establish a lithography machine laboratory, with Dongxin investing no less than US$80 million annually in research and development to develop the latest lithography machine technology!

In the future, when the lithography machines produced by Dongxin Semiconductor are sold domestically, they can be branded as Dongxin, and when sold overseas, they can be labeled as SVG. This way, they can have unimpeded access to the market and simply share some of the products with the other party.

As for SVG not being able to give its technology to Dongxin, that's perfectly fine. Both sides have established laboratories, and Dongxin has invested a lot of money. Just ask SVG if they want the funding.

Looking at Papken's expression, you could tell whether he wanted it or not. For SVG, which was almost broke, the lack of funding had led to a widening technological gap with competitors such as Nikon and ASML. Now that the funding had finally arrived, how could they possibly miss it!

Before Papken could speak, Li Dongling said to him, "I've said it before, the future of the semiconductor industry will be a clash of camps."

SVG and Dongxin will form a new alliance. With Dongxin involved, the mainland semiconductor market belongs to SVG.

SVG will definitely be the ultimate winner in the semiconductor industry!

Li Dashanren added another sentence in his mind: Glory can belong to SVG Company, but the technology must belong to Dongxin Semiconductor.

Li Dongling wouldn't mind elevating Papken to the status of the new century's leading semiconductor figure, making him an idol-like figure in the semiconductor industry, similar to Elon Musk.

However, while lithography machine technology can still be produced, SVG must be handed over to Dongxin Semiconductor. A god should sit on the altar and be worshipped with incense. Dongxin Semiconductor can handle the menial tasks.

After signing the equity agreement, Papken downed his drink in one gulp. He was already a little tipsy; the alcohol didn't make him drunk, but he was drunk on his own.

Every time Papken comes to Pingyang, he can make a lot of money. By handing over the assembly business of SVG's 365-nanometer and 436-nanometer lithography machines to Dongxin Semiconductor, the cost of SVG lithography machines can be reduced by a lot, and they also have a price advantage against Nikon and other arch-rivals.

As for whether helping Dongxin build a lithography machine industry chain would turn Dongxin into a breeding ground for trouble, Papken doesn't care at all.

When Dongxin really becomes too big to handle, then the people who should be worried are the U.S. Capitol Hill, as well as companies like Intel and Nikon; SVG will become irrelevant.

After all, even if the sky falls, there's always someone taller to hold it up. What is Papken afraid of? America isn't his; it's the US dollar that truly belongs to him!
After a few years, Papken can simply retire. As King Louis XV of France said, what does the flood have to do with him after he's gone?
(End of this chapter)