The Red Era: Living in Seclusion in a Siheyuan as a Boss

Chapter 657 Wei Daxun’s trip to “Huaxin”!!!
On this day, Wei Daxun asked the leaders of the Electronic Research Institute for a few days' leave and made a special trip to Bao County Special Economic Zone in Guangdong Province.

The purpose of his trip was to inspect a semiconductor company called "Huaxin" at its invitation.

Thirty-eight-year-old Wei Daxun is a senior researcher at a domestic advanced electronics research institute and enjoys a high reputation in the industry.

As an industry elite, he not only possesses solid professional skills, but also demonstrates outstanding R&D capabilities in a number of key projects.

In recent years, "starting a business" has become a trend, and many scientific research talents have turned to private enterprises to seek broader development space and better salary and benefits.

Although Wei Daxun has achieved success in his career, he is still in his prime and is always eager to reach new heights in his career.

The institute's routine work pace gradually made him feel a little unwilling.

However, the "HuaXin" company that extended an olive branch to him was an unfamiliar name to Wei Daxun.

This made him full of anticipation, but also a bit cautious.

After learning from many sources, Wei Daxun was surprised to find that this company called "HuaXin" actually possessed astonishing technical strength - they were planning to build the country's first 12-inch DRAM chip production line.

What is even more incredible is that this production line is not made of outdated old equipment, but is the latest generation of process technology that is comparable to that of international giant Samsung Electronics.

As a veteran in the industry, Wei Daxun's first reaction was disbelief.

How could this little-known emerging enterprise possibly possess such strong financial strength and technological reserves?
You know, two years ago, in order to implement the "Ninth Five-Year Plan" in China, which included the goal of achieving 0.5 micron semiconductor production technology, Shanghai approved the "0 Project".

It includes two major tasks: building a wafer fab and establishing a design company.

Among them, the Shanghai Municipal Government invested 40 billion yuan to establish Huahong Microelectronics.

Japan's NEC invested US$2 million, and the two parties established Hua Honghong NEC, with a total investment of US$12 billion to build an 8-inch wafer factory in Pudong.

NEC provides 0.35-micron technology, and this production line is already the mainstream 64M DRAM memory chip production line.

The electronic chip industry is not an ordinary industry. It requires continuous high investments and it may take a long time to achieve profitability.

As a national key project, Shanghai Huahong Semiconductor, with its efficient decision-making and execution system, is expected to achieve profitability only in the early 21st century even if the "Huahong NEC" project, a joint venture with NEC, progresses smoothly.

During this period, companies must maintain annual R&D investment of more than hundreds of millions of yuan, which is a severe financial test for any company.

Before this, Xiaguo’s first eight-inch DRAM production line was in Tianjin Port.

A lot of price was paid to obtain this mainstream production line at that time.

In 1996, Motorola of the United States proposed to invest 122 billion yuan in Tianjin Port to build the most advanced 8-inch wafer factory (MOS-17) in China at that time.

With this condition, Motorola became the only company in the 2nd millennium to obtain a charter from the Xia government to set up a wholly-owned mobile phone factory, and the only foreign company to obtain two mobile phone production licenses, GSM and CDMA, and a domestic sales license.

Motorola made a lot of money in Xia Country as a result, occupying more than half of the mobile phone market, with sales reaching 20 billion yuan this year alone.

By this year, a few international semiconductor giants have begun to build 12-inch wafer fabs.

This is the latest technology, and all the giants are on high alert.

The importance of semiconductors cannot be overstated.

This year, the Ministry of Electronics Industry and the Ministry of Posts and Telecommunications merged to form the Ministry of Information Industry, and invited overseas Chinese experts to participate in discussions and formulation of industrial guidance policies.

Zhang Yujing, boss of World Semiconductor from T Province, went to Beijing for inspection.

The relevant departments had considered hiring Zhang Yujing as general manager, but the result was not successful.

It was not until two years later, when World Advanced Semiconductor was acquired by TSMC, that Zhang Yujing decided to invest in China.

With the strong support of the Shanghai Municipal Government, Zhang Yujing founded SMIC, with a first-phase investment of US$14.76 billion, of which Shanghai state-owned banks provided US$12 billion in loans.

With this loan, SMIC built its first 8-inch wafer factory in Zhangjiang, Shanghai, using a 0.25-micron process with a designed monthly production capacity of 5 wafers.

Last year, the Yanjing Municipal Government planned that the Jingxi Electronics Group would form a joint venture with AOS (Bandai Semiconductor) of the United States to establish Hua Xia Semiconductor, investing US$13.35 billion to build an 8-inch wafer factory.

It is conceivable that it is difficult for private individuals to establish semiconductor companies. Not only do they need money, but they also need technology, talent, and policy support.

What is thought-provoking is that a little-known private enterprise, "HuaXin", not only needs to raise tens of billions of funds for factory construction, but also has to face strict technological blockade from the West.

How did they break through numerous barriers and acquire the world's most advanced semiconductor manufacturing technology?

Besides, "Samsung Semiconductor" is not an unknown company. It is the overlord in the current DRAM field.

In 1984, Samsung Semiconductor built its first memory factory and mass-produced 64K DRAM.

No one expected that this little-known Korean company would become an industry giant in the future.

By the way, the DRAM industry has gone through nearly twenty years of development from the 1980s to the present.

If I were to use one word to describe these twenty years, it would be "bloody".

The reason is simple. The biggest feature of the DRAM semiconductor industry is its cyclical nature.

Industry insiders once summarized: For every year that DRAM semiconductor storage makes money, it loses money for two years, the so-called "profit one, loss two."

Under this strong cyclical law, it is very difficult to survive for a long time.

DRAM manufacturers need to have strong cash flow and financing capabilities to maintain high-intensity R&D expenditures and keep the team stable.

During the loss cycle, DRAM manufacturers need more money to survive.

We cannot be careless even in a boom cycle.

Manufacturers need to be very cautious when choosing the time to expand production capacity.

Otherwise, it may lead to oversupply and profit turning into loss.

Twenty years ago, there were approximately 40-50 DRAM manufacturers in the world.

Today, there are only a dozen or so left, which shows how fierce the competition is.

During these twenty years, there is one company that not only survived, but also defeated countless competitors and maintained a dominant position for a long time.

This company is the Samsung mentioned above.

Some people may have heard of Samsung's story.

They adopted a "killer" strategy that has been included in the textbooks of countless business schools - counter-cyclical investment.

Simply put, countercyclical investment means taking advantage of the cyclical nature of an industry and, when the industry is in a downturn and competitors are shrinking their scale, doing the opposite and increasing investment, expanding production capacity, and further suppressing prices, thereby exacerbating competitors' losses or even causing them to go bankrupt.

Samsung’s first “counter-cyclical investment” took place in the mid-1980s.

At that time, Japanese and American peers were competing fiercely, the DRAM market was generally sluggish, and prices plummeted.

The price of DRAM chips fell from US$4 per chip (1984) to US$0.3 per chip (1985).

When Samsung built its factory and launched 64K DRAM, the production cost was US$1.3 per piece.

Faced with the industry's cold winter, Samsung not only did not cut its investment, but instead began to invest in reverse and expand its production capacity.

By the end of 1986, Samsung Semiconductor had accumulated losses of US$3 million, its equity capital was completely depleted, and it was close to bankruptcy.

At a critical moment, the Korean government stepped in to "save the market", investing a total of nearly 3.5 million US dollars, and endorsed Samsung in the name of the government, raising 20 billion US dollars in individual fundraising.

Later, Japan's semiconductor industry was defeated by the United States, and the industry boom brought about by the hot sales of PC computers enabled Samsung to successfully turn the situation around and usher in performance growth.

Soon after, Korean DRAM manufacturers, represented by Samsung, gradually eroded the market share vacated by Japanese semiconductor companies and occupied a dominant position in the market.

Samsung's second "counter-cyclical investment" was in 1992, when an explosion occurred at Sumitomo's resin plant in Japan, leading to a tight supply of raw materials and a surge in memory prices.

This year, Samsung took the lead in launching the world's first 64M DRAM.

In 1993, the global semiconductor market began to weaken again. At this time, Samsung repeated its old trick and adopted a second "counter-cyclical investment".

They invested in building an 8-inch silicon wafer production line for the production of DRAM.

In 1995, Microsoft released Windows 95 operating system, which greatly stimulated the demand for memory and led to a sharp rise in memory prices, and Samsung's investment paid off.

Major manufacturers around the world realized the situation later and began to invest in expanding production capacity.

The good times did not last long. By the end of 1995, after various manufacturers' 8-inch wafer fabs went into production, production capacity increased dramatically, resulting in a surplus of DRAM.

As a result, the seller's market turned into a buyer's market and prices began to fall again.

Under this circumstance, manufacturers are forced to cut production and reduce investment.

Samsung continues to expand its investment.

In 1996, Samsung launched the world's first 1GB DRAM, establishing itself as an industry leader.
You are such a powerful and domineering enterprise. How did you, "Huaxin", snatch meat from the wolf's mouth?
All these signs were beyond Wei Daxun's understanding, and he even suspected that he had encountered an elaborate scam.

However, professional sensitivity and strong curiosity ultimately overcame doubts.

With the mentality of "just treating it as an investigation", Wei Daxun embarked on a field investigation journey.

He thought to himself: The worst outcome would be a wasted trip. Could it be possible that the other party would sell out a grown man like me?

That day, Wei Daxun took a bus from the county town and headed straight to the city center before taking the evening train. After more than a day and a night of travel, he arrived at the Guancheng Railway Station in Guangdong Province on the morning of the next day.

Since I didn’t buy a seat ticket, I had to sit in the aisle of the train for the whole night, and I was very tired.

After I left the station with my suitcase, I saw a gray sky with drizzling rain. It was October in Baoxian Special District at this time, and the rain falling on my face was a little chilly.

Because of the rain, there were few pedestrians in the wide square, making it look very empty.

Cross the square and come to the road diagonally opposite the train station.

Wei Daxun was walking on a slope in the rain with a suitcase in his hand. The suitcase was a bit heavy. In addition to a few sets of clothes, it mainly contained technical information on electronic chips.

He walked slowly in the drizzle, his eyes fixed on the signs on the houses on both sides, looking for the bus station heading to Baoxian Special Zone.

Wei Daxun walked along the side of the road, concentrating on finding the bus stop and not paying attention to the pedestrians on the road.

Suddenly, I heard a cry of "Ouch!" and saw a young man bending over and touching the back of his foot and saying, "Your suitcase hit my foot. It hurts."

Wei Daxun saw that there was no one around, and how could such a wide road hit his feet? In order to calm things down, he had to say, "I'm sorry."

"Just say sorry and that's it. You should at least show some appreciation." This person seemed a bit unreasonable.

Wei Daxun is not a fool. Looking at the man's expression, he guessed that he was being blackmailed.

But seeing that he was alone, Wei Daxun's tone became tougher: "It's raining, there are no pedestrians on the road, how could I bump into your foot."

"It seems that you don't want to pay the money." After saying that, the man put his finger into his mouth and whistled. Immediately, three burly men came out from the surrounding shops and surrounded Wei Daxun. The man pointed at the suitcase and said, "If you don't take the money, I will take the suitcase away." As he said that, someone actually bent down to take the suitcase.

Wei Daxun saw that something was not good, because the one thousand yuan he brought with him on this trip was all in the suitcase.

If the money is stolen by someone, what if this trip is in vain? How can he eat and go home?
So Wei Daxun quickly said, "Wait, I'll give you money." Then he reached into his pocket and took out all the money, including a few ten-yuan bills and two fifty-yuan bills. He said, "I'll give you a hundred yuan. I'll use the rest to buy a ticket to Bao County."

The leader of them snatched two fifty-yuan bills from Wei Daxun, said "let's go", and then walked away.

Wei Daxun continued looking for a station with his suitcase, but he felt extremely heavy.

This is my second time in Guangdong Province, and I have encountered similar unpleasant things every time.

I couldn't help but recall the first time I came to Guangdong Province.

That was many years ago.

One day, the brother-in-law came to Wei Daxun's house and said to him: "Brother-in-law, I want to go to Guangdong Province to play, and do some business by the way to earn some round-trip travel expenses. You can go with me."

Life was difficult at that time and there was no extra money at home. Wei Daxun knew that his brother-in-law had just graduated from high school and had no job yet, and he himself had just entered graduate school, so how could he have the money to go to Guangdong Province?

So Wei Daxun said to him: "If we don't have money, we won't go."

Wei Daxun thought that if he didn't go, his brother-in-law would definitely not be able to go either.

Two days later, the brother-in-law came again and said to Wei Daxun happily and mysteriously: "Brother-in-law, I have money now. Now we can go to Guangdong Province."

Wei Daxun was a little suspicious. If he did anything wrong, it would be troublesome. Although his brother-in-law was young, he had a lot of tricks, so he asked him: "Where did you get the money?"

The brother-in-law gently told Wei Daxun: "I know where Dad's bankbook is. I just need to withdraw a few hundred yuan, take some goods to Guangdong Province first, play for a few days, and then bring some goods back. When I make money, I will quietly return Dad's money. In this way, Dad doesn't know that we have also gone to Guangdong Province to play."

The solution is good, but Wei Daxun is still a little worried: "This is not a good idea, what if my father finds out?"

"It's okay." Seeing Wei Daxun's hesitation, his brother-in-law advised him, "We will only be in Guangdong for a few days. I will secretly withdraw the money and return it secretly when I come back. This way, no one will know."

Wei Daxun always felt that this was not a good idea. What if the old man found out? How would he explain it?
In order to dispel Wei Daxun's doubts, my brother-in-law promised me: "Brother-in-law, don't worry, if there is anything, I will bear it alone and not tell you."

Hearing him say this, Wei Daxun was really moved.

To be honest, Wei Daxun has never been to a developed area like Guangdong Province. When he was in elementary and junior high school, he wandered around the county town. When he was an educated youth, he wandered around the countryside. After a lot of effort, he was admitted to a university, but it was still in a backward city in the inland.

It is said that coastal cities are particularly fun these days, and Guangdong Province is even more lively, so Wei Daxun also wanted to go and see how lively it is.

My father-in-law also knew that they were going to Yuezhou to do business.

He smiled and said, "You guys are not cut out for business. It's good enough if you can come back without losing money."

It seems that my father-in-law really doesn't know that there is money missing from his passbook, otherwise he would have jumped up and scolded them both.

Before going to Guangdong Province, Wei Daxun and his brother-in-law discussed what route to take, what goods to bring, and how to deal with any problems that might arise.

After making full preparations, we set off on the third day.

I heard that food in Guangdong Province sells well, especially chicken, beef, and dog meat, and the prices are also very high.

So, on the day of departure, Wei Daxun and his friend bought a dozen chickens at home first, because the local chickens were still very cheap, and they thought they could definitely make money.

Then he took the bus straight to the farmers' market. Wei Daxun was quite familiar with this farmers' market, having been there several times. It was located at the junction of three counties.

Therefore, this market is particularly large and there are a lot of people coming to it.

As soon as the market day arrives, people flock to the market, some carrying baskets of vegetables, some carrying snakeskin bags, some pushing wheelbarrows, some driving tractors, and some leading pigs and dogs. Men, women, old people and children, there is an endless stream of people, making the market very lively.

The most famous product in the farmer's market is dog meat. The dog meat here is tender and fresh, with a complete variety and cheap. Therefore, everyone who comes here to do business wants to try dog ​​meat. It seems that not tasting dog meat is like not going to the Jieshou market.

The market also has various agricultural and sideline products markets, chicken, duck, pig, cattle and dog markets, and fresh dog meat slaughtered on site is also available.

After passing Cha County, the car got on the provincial road.

The trees on both sides of the road flashed by.

The crops in the roadside fields have begun to turn green and are growing lushly.

When passing by Fengchong Production Team, Wei Daxun opened his eyes wide and looked carefully. Everything was still so familiar.

A few years have passed, and it seems that not much has changed here.

A farm road leads to the village. Across the stone arch bridge over the channel are several large maple trees. The green leaf crowns of the maple trees are as large as an acre. Through the leaves of the maple trees, the familiar Fengchong village can be vaguely seen behind.

Occasionally, you can see a few people working in the fields by the roadside. Some of them are spraying pesticides with sprayers on their backs, and a few are weeding the fields with sticks in their hands.

Since it was too far away to see who it was, I could only judge who it looked like from the blurry shadow.

Because, a few years ago, Wei Daxun worked here as an educated youth for three years and had a deep affection for the local members. Although he has been away for many years, he still can't forget their meticulous care for him and misses them very much.

(End of this chapter)