Reborn since 1993

Chapter 800 Local Snake

The saying goes that those who are righteous have many supporters, while those who are unrighteous have few supporters. This can be translated into Chinese as finding more allies, more thugs, and then overthrowing your mortal enemy!
Now Shenzhou Computer and Dongxin Semiconductor are being targeted everywhere. Some computer brands have painstakingly created an encirclement in an attempt to lock down Shenzhou Computer and Dongxin Semiconductor.

Then why can't Shenzhou and Dongxin form a counter-encirclement?
The enemy of my enemy is my friend. The strategy of making friends with distant countries and attacking nearby ones has been used since the Spring and Autumn Period and the Warring States Period. There is no reason to abandon it now.

If you count them carefully, Intel, the chip giant, has many more rivals than Dongxin!

It can target Donxin Semiconductor, so why can't Donxin gather a group of anti-Intel companies to form a new anti-Intel alliance?

The world has suffered from Intel for a long time. AMD, IBM, and even the old European chip factories can be won over. Although this is an alliance of interests, this alliance can exist before Intel is defeated.

In addition to chip manufacturers, the Zhixing Foundation has also invested in NVIDIA and ATI. When the time comes, it can also bring graphics cards into the anti-Intel alliance and make things difficult for it.

Forming an anti-Intel alliance can reduce the pressure faced by Dongxin Semiconductor. Moreover, in the future, it can also cooperate with these chip factories to jointly develop lithography machines, provide foundry services for these chip factories, and so on.

In order to reduce losses, AMD sold all of its wafer fabs and chip factories in the past, leaving only the design department.

Now, Dongxin Semiconductor can completely let AMD embark on the "broad road" of its previous life in advance. Let Dongxin Semiconductor do the loss-making things. AMD can completely sell its chip manufacturing plants to Dongxin and let Dongxin do the OEM for it!
The whole of America is doing this, selling or relocating domestic production plants, and all the rest is profit. It's like a huge win!
While Li Dongling was talking to Chen Liwu and others, people from several companies came over one after another. From Dongling Hi-Tech, there were Ren Yuefeng, Hu Zixian, Su Chicheng, Gao Zhiyuan, and Wu Xinyi, the general manager of Doxin Semiconductor, who came with the personnel from the finance and legal departments.

For a moment, the conference room of Yuhe Leisure Resort Hotel was packed, and after a while, the sound of disputes in the conference room began to be heard.

Ren Yuefeng, Hu Zixian and Li Dongling talked in a low voice. They wanted to know the bottom line that Li Dongling estimated for Doxin Semiconductor before they could start arguing with the other side.

Li Dongling whispered a number to Ren Yuefeng, and Ren Yuefeng's face showed obvious surprise.

"This……"

After taking a look at the people from Microsoft, Goldman Sachs, and Walden International, Ren Yuefeng said, "The other party may not accept such a valuation."

“They’ll accept it!”

Li Dongling shook his head and said, "The valuation of Dongxin Semiconductor this time is not based on itself, but on other transactions generated by it!"

As "traditional" companies, chip manufacturers' current valuations are not high. AMD is just starting out and is active in the mid- and low-end chip market, with a market value of less than $1 billion.

Texas Instruments has not yet become the dominant force in the mobile phone chip industry through its alliance with Nokia, and its current market value is only around US$1.8 billion.

"Traditional technology" companies and chip factories are now far less popular than Internet concept stocks. The market value of Feiyan Technology has exceeded 4 billion US dollars, and its stock price is still growing wildly.

The market capitalizations of AMD and Texas Instruments are like this, so the valuation of Doxin, in theory, certainly cannot be much higher.

This time, Doxin Semiconductor is expected to transfer 10% of its equity to several Microsoft companies respectively. Before going public, Doxin Semiconductor will definitely need to introduce some domestic investors. In addition, it will reward equity to Wu Xinyi, the management team, Ni Guangnan, Huang Lingyi and other technical experts, as well as option rewards for all employees.

After the final listing, the shares of Dongxin Semiconductor held by Dongling Hi-Tech, the major shareholder, are estimated to drop to around 40%.

But when you add in the management, employee stock option rewards, the Zhixing Foundation, and domestic investment institutions such as Hanxi Guotou, the equity that can ultimately be controlled will definitely be more than 51%.

"impossible!"

"Dongxin Semiconductor's asking price is too high. Whether it is compared with chip companies or lithography machine manufacturers, Dongxin Semiconductor's valuation cannot exceed 2.5 billion US dollars!" Zhang Ailun said.

Asking for a sky-high price and then paying it back is a basic negotiation routine. Dongling Hi-Tech naturally followed this principle and immediately called out a valuation of US$2.5 billion for Doxin Semiconductor.

"This year, the revenue of Doxin Semiconductor is expected to exceed 800 million US dollars. In the next few years, the revenue of Doxin Semiconductor is predictable, and the orders and revenue are relatively stable!"

Wu Xinyi also said that the biggest difference between Dongxin Semiconductor and other chip manufacturers is that it has a big thick leg to hold on to.

Dongling Hi-Tech, the parent company, and its subsidiaries, have basically handed over all chip-related businesses to Dongxin Semiconductor. Dongxin Semiconductor also owns a number of basic businesses, including landline chips, PHS chips, and electronic dictionary chips. In theory, as long as Dongling Hi-Tech exists, Dongxin will not have to worry about its revenue.

As for the future, how high Doxin Semiconductor can climb depends on how far Dongling Hi-Tech can go!

"A valuation of $2.5 billion is impossible!"

Chen Liwu also said that if the valuation of Dongxin, which has not yet gone public, exceeds 2.5 billion US dollars, then where will the old predecessors such as Texas Instruments and AMD put their faces? You can't hit people in the face like this. After so many years, have they ended up in poverty?

Li Dongling looked at the group of people sitting opposite him and realized that no matter how much performance he talked about, it would be useless to increase the valuation. Those people on Wall Street didn't believe in it at all. What they loved most was the big pie, a big pie that could fool everyone.

After coughing, Li Dongling tapped the table lightly and said, "Dongxin Semiconductor is different from other companies in the same industry!"

"Now the world's electronic manufacturing industry is shifting to the mainland. In the future, this place is likely to become the world's new electronic manufacturing center!
Countless electronic products such as mobile phones, computers, VCDs, DVDs, video recorders, cameras, etc. will be produced here.

As for Doxin Semiconductor, as long as it can get chip orders from the mainland and supply chips to the world's largest electronics production base, I don't need to say much about its future revenue!
In the future, this place will become the world's largest integrated circuit and chip manufacturing center. As long as there is a chip factory built in the mainland that needs lithography machines, there will be Dongxin lithography machines!"

Li Dongling pointed out that the biggest advantage of Doxin Semiconductor is not its technology, nor its backing by Dongling Hi-Tech, but its backing by the mainland market.

Let’s bet that the domestic chip market will explode. As the local tyrant, Dongxin Semiconductor will be able to receive a lot of orders!
As a local tyrant, Dongxin Semiconductor has natural advantages. Intel, AMD, IBM, Toshiba, NEC, Siemens, and Infineon all work well abroad, but are all sidelined in mainland China. Do you understand the value of being a local tyrant? Do you know what local combat advantages and tactical retreat are?
Ed Fries and others were silent for a while. Ordinary people might not notice it, but as a giant company, they spend a lot of money every year on various information and intelligence collection, plus their relationship with America, they know a lot of news.

Now, manufacturing companies from all walks of life in America, old Europe, including Japan, are moving to the mainland. Companies such as Goldman Sachs are well aware of this, and they are even partly responsible for this.

Because Wall Street needs American companies, revenue is constantly increasing, costs are decreasing, but profits are required to increase, so what else can American manufacturers do except relocate their factories overseas to places with lower costs? !

Now Li Dongling has painted a big pie and even blurred a concept, that is, Doxin Semiconductor represents the mainland chip industry and is backed by a country's chip market. Isn't this pie big enough?

"But a valuation of $2.5 billion is still too high. Texas Instruments' revenue is higher than that of Doxin Semiconductor, but its market value does not exceed $2 billion!" Ed Fleiss also spoke up.

It is true that Microsoft is wealthy and powerful, and it is often taken advantage of. However, the losses it suffers are all hidden losses, that is, there is no reference object. It will take many years to see whether it makes a profit or a loss after an acquisition.

But it’s different for Dongxin Semiconductor. In the chip industry, there are reference points, so it can’t be too outrageous.

"Two billion three hundred million dollars!"

Here, Hu Zixian took advantage of the situation and lowered a part of the valuation.

After several rounds of wrangling, the valuation reached about 2.1 billion US dollars, and Ren Yuefeng, Hu Zixian and others were unwilling to give in.

After a long stalemate, Ed Fries was the first to lose his temper. Just as Li Dongling said, what Microsoft cared about most was the acquisition of the Stargazing Video Recorder resulting from this transaction.

If this deal fails, then the acquisition of the Stargazing Video Recorder will also fail, which Microsoft cannot tolerate.

"Two billion US dollars, Microsoft is willing to invest two hundred million US dollars in Dongxin Semiconductor at a valuation of two billion US dollars!"

Seeing that Microsoft was the first to show its cards among the three companies, Goldman Sachs and Walden International, which originally felt they could still lower the price, now face the choice of following suit or giving up.

"Walden International is also willing to accept the US$2 billion valuation of Dongxin Semiconductor!"

Chen Liwu thought for a while and said that he decided to play a card. He also valued the mainland market, and Doxin Semiconductor was the card with the best hope of breaking through the siege in the mainland chip industry.

Ed Fleiss and Chen Liwu expressed their opinions one after another, and Zhang Allen had no choice but to say, "Goldman Sachs is willing to invest in Dongxin Semiconductor!"

"Welcome to join the board of directors of Doxin Semiconductor!"

(End of this chapter)