1988: Back to the human world for a few years

Chapter 489: Arrogant but Reasonable (2)

As the first person to come into contact with Yang Mo, and their relationship was once so close that they were like father and son, although Zhang Wenshun started to cooperate with this guy a little later than Miss Mu, he learned a lot from Yang Mo. In fact, with his rich social and work experience, he absorbed and digested all kinds of knowledge much faster than Mu Liya.

In fact, he took over as the acting section chief of Momobaitou, and got started much faster than He Yongyi, and played a more obvious role... He Yongyi still needs to go through complicated financial analysis to deduce whether various projects are worth investing in/following up on, but this fat guy can roughly judge whether a project is valuable at this stage by just taking a look at various data.

This is partly due to the amazing sense of touch that Zhang Wenshun gained during his ten years of ups and downs, which was so rich in work and social experience that it shocked many people.
On the other hand, it was attributed to the investment research and analysis method that Yang Mo had discussed with him a long time ago.

As an eyewitness, he is well aware that in this era where everyone has to cross the river by feeling the stones, this layer-by-layer analytical method is shocking to those who are completely in the dark and rely more on experience and intuition to make decisions.

Therefore, when Yang Mo called on him to answer why the Texas Capacitor Factory was not included in the first batch of key support enterprises, he knew what this bastard meant.

Even though he felt somewhat resentful towards someone for throwing him out as a pioneer, this did not prevent Zhang Wenshun from having a sense of revengeful pleasure, allowing those who came from far away to find trouble to experience what professional shock was like.

………………

"As Mayor You said just now, with the development of the electronics industry and the increase in usage scenarios, MLCC is now known as the rice of the electronics industry and is also one of the most used passive components in the electronics industry."

Zhang Wenshun showed a friendly and harmless smile to Kuai Hua and You Yakun, and glanced at the familiar faces in the outer seats: "In order to facilitate your understanding, and to answer some questions that other brother units may have, I will take up a few words of your time to sort out the family structure of electronic components."

“As we all know, electronic components can be divided into two categories: passive (passive) and active (active), depending on whether they have a power source to achieve a specific function;”

“The main passive components include resistors, capacitors and inductors, as well as passive time-frequency components (filters, etc.);”

"Capacitors account for about 49% of the entire passive component market share, and ceramic capacitors account for the majority of that share;"

"Ceramic capacitors are mainly divided into two categories: single-layer ceramic capacitors (SLCC) and multi-layer ceramic capacitors (MLCC)... Multi-layer MLCCs now account for about 90% of the market."

"Based on this rough calculation, MLCC accounts for about 25% of the entire electronic component market... Its high share and wide range of uses make it worthy of the title of rice in the electronics industry;"

"In fact, according to the data we have collected, in 1990, the actual use of MLCC in the five major electronic industry manufacturing areas of Northeast Asia, Southeast Asia, South America, Europe and North America alone was no less than 450 billion... This is indeed a very large market."

Everyone looked at each other in bewilderment. Since you know that multilayer ceramic capacitors are such an important good thing, then even if it is for industrial strategy considerations, the Texas Capacitor Factory should be included in the key support list... Aren't you asking for trouble by reporting the data so clearly?

Zhang Wenshun glanced at the suspicious crowd and smiled like Maitreya Buddha: "Although in the long run, MLCC has extremely high growth potential, with the further prosperity of various electronic product markets, the global total market may even exceed 100 billion units...but this requires a relatively long process;"

"DZ City is an old industrial area. Everyone here is a representative of industrial enterprises. You should know that the electronics industry is also a part of the industrial field. And any industrial field cannot escape its own cyclical laws!"

"Therefore, MLCC also has significant cyclical characteristics. Its product prices and technological changes will be significantly affected by the supply and demand relationship, showing obvious cyclical fluctuations!"

After emphasising the words "technological change", Zhang Wenshun glanced at Director Feng, whose expression was a little unnatural, and then looked at Kuai Hua, who seemed to be thinking about something. He considerately turned to a certain page of the information in his hand and said, "Let's first review MCLL's previous historical cycle and find out the main factors affecting the industry's prosperity. Then, we can compare the key operating data of several internationally representative companies to conduct a cycle review. This will make our vision clearer and broader!"

"As the old saying goes, we can learn from history to understand the rise and fall of nations... After all, Dezhou Urban Development Fund focuses on upgrading and supporting various sub-industry fields, rather than a commercial banking system engaged in 1v1 corporate financial services. We must consider reality, respect objective laws, and focus on the overall situation. Only in this way can we subjectively guarantee the independence of our decision-making, live up to the expectations of the organization, and avoid the chaos of misusing public resources for private purposes!"

As soon as these words were spoken, everyone's faces suddenly became a little unnatural, and even Kuai Hua and Li Bo felt a chill on their backs.

This fat guy put a hat on himself and emphasized that Dezhou Urban Development Fund Company is an institution that provides upgrading and assistance for subdivided industrial fields. Their focus is on the overall industry rather than a specific enterprise. If their analysis is reasonable and well-founded, no matter who they are, if they are still entangled in the fact that Dezhou Resistor Factory failed to be selected in the first batch of key support list, it is equivalent to claiming the hats of "ulterior motives" and "misusing public resources for personal gain".

What a terrible switch between active and passive, such a natural reversal, such a skillful method!
Who on earth is this fat guy? !
Are there... so many ruthless people in Texas?
Zhang Wenshun still smiled as festively as a Maitreya Buddha, as if he didn't notice that some people looked at him with deep fear: "After reviewing the last cycle of MLCC, we believe that, like most industrial products with low technical content, [volume] is the biggest influencing factor in this industry."

"Based on the principles of fairness, openness, mutual understanding and common progress, in order to facilitate the understanding of other industry partners, before the official review, we might as well waste a minute to look at the structure of the MLCC-related industrial chain;"

"The first is the upstream cost structure of MLCC...It should be noted that we selected samples from Southeast Asia, not domestic samples."

"The raw material composition of MLCC production is not complicated. There are only six major parts: ceramic powder, inner electrode (nickel/silver/palladium), outer electrode (copper/silver), packaging materials, labor costs, equipment depreciation and others."

"The cost proportion of ceramic powder varies depending on the product line. Low-capacity MLCC accounts for about 20-25% of the cost; high-capacity MLCC accounts for about 35-45%;"

“The cost proportion of the internal electrode (nickel/silver/palladium) is 5% and 5-10% respectively, depending on the product line;”

“The cost proportion of the external electrode (copper/silver) is also 5% and 5~10%;”

“Packaging materials account for 20-30% and 1-5% respectively;”

“The labor cost is 10~20% regardless of whether it is a low-capacity MLCC or a high-capacity MLCC;”

“As for equipment depreciation, low-capacity MLCCs are generally 20-35%; high-capacity MLCCs are 20-30%.”

After reading out this set of data in one breath, Zhang Wenshun's smile remained unchanged, but his words made some people feel cold in their bones: "I don't know what others think, but from the perspective of our Dezhou Chengchan Fund Company, the structural data of upstream costs alone is enough for us to be cautious."

"First, the quality of ceramic powder, which accounts for the highest proportion of upstream costs, is crucial to the performance of MLCC and is also a key factor affecting the gross profit margin of enterprises. Unfortunately, although Qilu's ceramic industry has a long history, the level of industrial ceramics does not meet the established requirements today and needs to be imported or purchased directly from Hebei... In other words, unless Qilu's industrial ceramics technology can achieve a qualitative breakthrough in the short term, even if MLCC is produced, it will still be a processing-by-supplied-materials model, and regional industrial interaction cannot be formed at all. The cost-effectiveness of industrial investment is so low that it is outrageous;"

"Secondly, gold, silver, copper, nickel, palladium, which one is not an extremely scarce precious metal material or even a strategic material in China?"

"Looking back at the huge scale of global total demand exceeding 450 billion units, the proportion of MLCC upstream costs in precious metals is as high as 10% or even 20%... Please consider the practical problems in the middle."

"But this is not the most important thing. What is important is that in this upstream cost structure table, labor costs also only account for 10-20%... I have said before that this is a Southeast Asian sample, or more precisely, a sample of the Four Little Tigers, not a domestic sample. In other words, considering full market competition, domestic labor costs can only be significantly lower than this level, not higher!"

"The unit price of MCLL in the international market is not expensive, so please think about this question: Is this an industrial upgrade that essentially relies on scarce resources and cheap labor to exchange for the market, or is it the real industrial upgrade supported by technology that we want to advocate?"

As Zhang Wenshun asked the question, everyone's eyes began to avoid him, and Director Feng even broke out in a cold sweat on his forehead.

Many things simply cannot stand up to scrutiny once you peel off their shiny, bright exterior.

Apart from anything else, this upstream cost composition table alone is enough to throw their factory's support application into the trash from a standpoint.

Although there was no sweat on Kuai Hua's forehead, his hands were already a little wet.

Damn it, after all this time, this is just a resource-based industrial project, and it’s also a processing-by-imported project that relies on precious and scarce metals, with labor accounting for only about 10%… Then why don’t I just sell precious metals directly?

This TMD project has nothing to do with the industrial upgrading I imagined!

Thinking of the attitude he had shown earlier that he was willing to support this project, Kuai Hua secretly glanced at You Yakun next to him and snorted barely perceptibly.

Idiot, if someone uses this matter to make a fuss in the future, you will be the first one to be forgiven!
You Yakun's expression was a little stiff, but it was unclear whether he heard the hum or not.

Logically speaking, since he has pointed out the biggest problem of the project and it concerns the leader's face, Zhang Wenshun should have stopped while he was ahead. However, this fat guy who had become a shrewd man early on did not look away, as if he was completely unaware of the change in the atmosphere in the meeting room, and continued to throw the second blow like a nerd.

"After looking at the upstream cost structure, let's look at the midstream structure of the MLCC industry."

“Although MLCC has a wide range of uses, it has been decades since the initial evolution of ceramic capacitors, and has been undergoing a stable iterative evolution. Therefore, in the past few decades, the midstream of the international market has shown a clear oligopolistic competition pattern.”

"Among them, Murata Manufacturing Co., Ltd. in the island country has the largest market share with its high-quality ceramic powder smelting technology, accounting for 31% of the market share... Please note that this 31% is a comprehensive market share. In fact, Murata Manufacturing's main business is high-capacity MLCC with higher profit margins. In other words, nearly % of the most profitable market in the global MLCC market is monopolized by Murata alone."

"In addition, South Korea's Samsung Electro-Mechanics has a 19% market share... Although Samsung Electro-Mechanics is now mainly engaged in low-capacity MLCCs with lower gross profit margins due to the American manufacturing industry, they are shifting their focus to high-capacity MLCCs with higher gross profit margins with the transfer technology they have acquired;"

"In addition, the island country's Taiyo Yuden has a market share of 13%;"

"Yageo of Taiwan also has a market share of 13%;"

"Kyocera of the island country has a market share of 11%;"

"In addition, TDK, Sanhe of Southern Dynasty, Huaxin Technology and Hoshindo of Taiwan all have a market share of more than 3%;"

"That is to say, looking at the global MLCC market, only 15% of the share is reserved for small manufacturers in other places... and this 15% share is all low-capacity MLCCs with low technical content and low gross profit margins;"

"In other words, even if our Urban Industrial Fund focuses on supporting the Texas capacitor factory and allows them to expand their production capacity, they can only use cheaper, low-capacity MLCCs to grab the 15% market share by compressing their profit margins."

"In theory, with a global market demand of over 450 billion units, even a 10% share would still be 45 billion units, which is huge enough."

"But we who work in the industrial field should know very well that in an industry like MLCC where high-end and low-end products coexist, customer stickiness depends on high-end products with higher technical content and greater weight factors, that is, high-capacity MLCC... In other words, unless you can achieve a technological breakthrough in the field of high-capacity MLCC, no matter how many low-capacity MLCCs you produce, it is just pure hard work. You have no say in the industry, let alone the qualification to grab those important customers!"

At this point, Zhang Wenshun glanced at Director Feng calmly: "The downstream demand side of international MLCC is all manufacturers in the fields of automobiles, consumer electronics, computers, communication equipment, and household appliances, and the usage scenarios are basically concentrated in the low-end rigid demand field... In this regard, due to the chaebol economy, the MLCC Japanese and Korean midstream companies, which have an absolute advantage, naturally have more convenience;"

"Foreign companies like to play tie-in sales, and I'm sure you've all heard about it. For high-value-added commodity usage scenarios like downstream, if you don't have the right to speak in the MLCC manufacturing industry, people only need a word to immediately transfer the low-capacity MLCC order that should have belonged to you to another small manufacturer with lower costs and better relationships... There's no way, who made you fail to pass the industrial ceramic powder smelting technology and produce qualified or more cost-effective high-capacity MLCC?" With a heavy sigh, the fat man's voice was full of heaviness: "Our Dezhou Urban Property Fund has never been a short-sighted institution, and has never been afraid of making long-term large investments in the industry... But all this must have a premise, that is, it is worth it!"

"Faced with such market competition and risks, we can invest for long-term development, but all this... is based on the breakthrough of industrial ceramic powder smelting technology in Dezhou or Qilu... The problems and constraints of the MLCC industry are not in the MLCC itself, but in the field of industrial ceramics!"

"In other words, even if the organization requires our Dezhou Chengchan Fund Company to focus on supporting the MLCC manufacturing industry, we should invest the first batch of key support funds in industrial ceramic powder production enterprises!"

At this point, Zhang Wenshun's tone was filled with helplessness and grief: "A considerable number of the representatives of various enterprises attending the meeting today are factory directors with technical backgrounds. When you were doing technical work before, the phrase you often said was that you hated being commanded by outsiders... But I hope you can understand one thing... When it comes to technology, you are experts, but when it comes to industrial support, we are the experts!"

"Industrial support is a complex and systematic project. You cannot use your usual linear and tree-like thinking to measure our work, and you cannot simply understand the work of our Dezhou Chengchan Fund Company as treating the symptoms without addressing the root cause!"

Some corporate representatives blushed after hearing these words, while Kuai Hua and You Yakun, who were hit hard in a roundabout way, felt quite embarrassed and annoyed.

What does it mean for an amateur to command professionals?

What is linear thinking?

What does it mean to treat the head when you have a headache and the foot when you have a foot pain?

You, you, you...

But even if they felt as disgusted as if they had eaten a fly, there was nothing they could do.

Due to its experimental nature, Dezhou Urban Development Fund Company is directly responsible to the ministry in the control and decision-making of the industrial fund (I'm not YY, if you don't quite understand the details, you can check [Big Fund Phase I]). Although the province has the right to make suggestions and a certain degree of supervision, as long as the other party's position is correct and what they say makes sense, you do not have any right to intervene directly.

Zhang Wenshun glanced at Kuai Hua and Li Bo, whose faces looked a little gloomy, and sighed with some fatigue.

Although it is still an era of "officials look down on the people and are superior to them", and although he is a cadre of a central enterprise and does not care too much about the views of the administrative department, it was still a very stupid thing for him to verbally confront two senior officials on the spot like a reckless man.

But there was no other way. As the saying goes, one strike is better than a hundred. He knew Yang Mo's intention very well.

As a person who was forcibly forced onto the ship by some bastard, no matter how much he secretly complains, he will still stand up when it is time to be the knife... This is a question of standing on the side, and it is not up to you whether you are willing or not.

Thinking of this, he quickly calmed down his inner turmoil and turned to the next page of the materials in his hand.

If you want to hit, you have to hit hard; if you want to confront, you have to confront until the other person is speechless.

Since we don't want those irrelevant people to come out and make comments, we can't leave them any entry point to make use of the issue, or even any chance for them to think they can revive... In short, we must be 100% professional, so professional that others will embarrass themselves the moment they open their mouths, and so professional that those people will get a tingling sensation when they hear the name of Texas Urban Property Fund!
Suddenly, an inexplicable sense of pleasure surged in his heart. Zhang Wenshun cleared his throat and said, "Okay, next, we will officially enter the cycle review."

“Since the 70s, MLCC has experienced two cyclic fluctuations;”

"The first time was in the first half of 1979-1981; the main reason was the impact of the second Middle East oil crisis on the global industrial industry... Specifically, the changes in the supply side opened a new cycle for the MLCC industry."

"It was during that period that a series of leading companies such as Murata and Kyocera began to gradually withdraw from the manufacturing of low-end products and began to shift their focus to mid-to-high-end products represented by high-capacity MLCCs, especially high-end products such as automotive-grade products;"

"As mentioned earlier, these companies have a very large market share. It is precisely because these leading companies have begun to gradually withdraw from the manufacturing of low-capacity MLCCs, and low-end MLCCs have rigid demand characteristics, that the manufacturing transfer with Southeast Asia as the main production body has been formed."

"The second cycle was from 1988 to 1990, which is the second half of this year. The reasons this time are more complicated. The economies of America and Europe are in trouble, Europe and the United States are suppressing the financial markets of island countries, and oil prices have skyrocketed since the second half of this year, even nearly doubling... However, what is different from the last time is that the direct reason for the start of the new cycle of the MLCC industry this time is the change in demand.

"By integrating the data from all aspects, we can clearly see that due to the global economic downturn, various MLCC manufacturers have begun to intensify their destocking plans. It is clear that the industry's prosperity will usher in a sharp decline in the short term... and based on past experience, this downward cycle will last at least 7 quarters."

………………

Pili babble for a full hour.
From the signs of a decline in the industry's prosperity; to the lack of sufficient domestic fundamental support, counter-cyclical production and reserve increase are not advisable;
From the possibility that countercyclical investment will lead to an inversion between ex-factory prices and inventory prices, to the insignificant impact that the pure low-end MLCC industry has on the domestic communication component manufacturing, semiconductor component manufacturing, electronic component manufacturing, compressor component manufacturing and other fields;
From the huge consumption of electricity caused by blindly expanding low-end MLCC manufacturing, which put heavy pressure on the already tight industrial electricity consumption in DZ City, to the complex consideration of the specific allocation planning of the three public elements of the industrial industry;

In short, according to Zhang Wenshun, before a breakthrough is made in high-capacity MLCC technology, investing money and energy in the Texas capacitor factory is a stupid thing that has neither economic nor strategic significance, and even has no value in cross-industry promotion!
During the downturn of the industry, due to the rigid demand for low-capacity MLCC, its production capacity will inevitably be gradually transferred from Southeast Asia to the domestic market with lower production costs. With the location advantage of Qilu, the Dezhou capacitor factory can easily get a large number of low-end MLCC transfer orders, and now there is no need to spend precious funds on them.
Moreover, the comprehensive considerations of Dezhou Urban Development Fund are far more advanced and comprehensive than everyone thought. They have already included the research on low-temperature sintering technology of ceramics as a Class B support task. After the exchange of the first batch of industrial products is completed, it has been made clear that a portion of the funds from the relevant revenue will be used for long-term investment in small batches and multiple times. After there is a breakthrough in the production technology of industrial ceramics, they will consider whether to vigorously support the MLCC industry based on actual conditions... Judging from the "First Batch of Class B Incubation and Aid Investment Project List" shown by Zhang Wenshun, they are not talking nonsense, but have indeed included the research on low-temperature sintering technology in the re-investment list.

After being scolded by Zhang Wenshun, not to mention Director Feng, even Kuai Hua almost couldn't hold it anymore.

Damn, we are just drawing up a list of the first batch of key supported enterprises, do you have to make it so complicated?

Is this a TMD investment research report?
It is clearly an extremely detailed global industry segmentation analysis report!
I know that the people at Momo Baitou and Dahua are well-known for their accurate vision and careful work;
but……

Are you guys really that perverted! ?

If you do this, you have analyzed all the points that need to be analyzed and have also analyzed all the things that do not need to be analyzed. How can I give you suggestions or guidance?
After secretly wiping the sweat from his palms, Kuai Hua exchanged glances with Li Bo.

This must be prepared!

Yang Mo must have known through some means that You Yakun had chosen the Texas Capacitor Factory to take the lead, which is why he prepared such detailed information and rhetoric!
Dezhou Urban Development Fund Company was established only half a month ago, and there are nearly a hundred companies participating in the selection of the first batch of key support lists. It is impossible for them to analyze each one of them so comprehensively!
Thinking of this, Li Bo, who felt that he had discovered the truth, smiled slightly and said in a gentle tone: "Mr. Yang, thank you very much, Director Zhang of your company, for sharing such a wonderful investment research data with us."

"I personally think that your company's decision is reasonable. Given the current actual situation, Dezhou Capacitor Factory is indeed not suitable to be included in the first batch of key support enterprises list;"

"But I'm a little curious... As one of Dezhou's traditional advantageous industries, why was Dezhou Heavy Engineering Machinery Factory, a heavy industry, not selected as one of the first batch of key support enterprises?"

At this point, Li Bo paused slightly and looked directly at Yang Mo next to him: "Heavy-duty engineering machinery is not only an indispensable tool for various major water conservancy infrastructure projects, but its industrial chain also involves a series of accessories such as steel, rubber, diesel, engines, tracks, sensors, etc.... From the perspective of industrial upgrading, its value and significance are beyond doubt... So, can you please help us solve our doubts, Mr. Yang?"

Although Li Bo's tone and words were much milder than Kuai Hua's, the accusation he made was even bigger.

Dezhou is an old industrial area. In such an area, heavy industry, especially integrated heavy industry such as heavy engineering machinery, which has a very long industrial chain and extremely important strategic value, is of self-evident significance.

Even though you have the ability to provide support, you didn't even include this kind of heavy industry enterprise in the first batch of key support list...Are you sitting on the wrong side of the fence?
Hearing this, Yang Mo just smiled gently and said, "Actually, if you didn't ask, Li Chang, I was going to take advantage of today's meeting to explain it to everyone... After all, although the Dezhou Heavy Engineering Machinery Factory is named after Dezhou, it is a provincial enterprise. In addition, heavy engineering machinery itself is a heavy tool. It is completely understandable that the province and the city attach so much importance to it."

After humbly expressing his understanding, Yang Mo changed the subject: "But as I said before, Dezhou Urban Property Fund Company has its own understanding of industrial upgrading. Since Dezhou Heavy Engineering Machinery Factory was not included in the first batch of key support list, it naturally has its own considerations."

As he spoke, Yang Mo looked at Zhang Wenshun and said, "It just so happens that Minister Zhang is personally in charge of the selection of heavy industry enterprises. Minister Zhang, please take the trouble to explain the reasons to everyone."

Zhang Wenshun wailed inwardly when he heard this.

His hands moved very swiftly, and he quickly picked out another document from his briefcase that was thicker than the previous one.

After clearing his throat, Zhang Wenshun kept the friendly smile on his face, and threw out one dizzying blow after another.

"If we were to name a typical cyclical industry, construction machinery would definitely be one of them, and its cyclical characteristics are even more obvious than MLCC..."

"Although there are many types of products belonging to the construction machinery industry, they can be roughly summarized into several major categories, such as excavators, loaders, concrete machinery, cranes, etc. Among them, excavators account for the largest proportion, nearly 50%..."

"With the further deepening of reform and opening up and the integration with the international community, even if we take into account some objective conditions, due to the particularity of engineering equipment and actual needs, we have to adopt a global perspective to look at some issues when doing industry analysis..."

"Although I believe everyone is prepared, I still have to regretfully tell you that more than 90% of the engineering machinery cannot be produced independently in my country, or the independently produced products do not meet the required standards... Even if the engineering machinery that can be produced, assembled and modified in China is only relatively low-end basic equipment from a broad perspective;"

"In theory, even if it is low-end basic equipment, it cannot meet the standards required for the project for the time being, but as long as there is a foundation and accumulation, then as an official investment and financing platform, our Dezhou Urban Development Fund Company should strongly support it anyway."

"But unfortunately, the situation at the Dezhou Heavy Engineering Machinery Plant is not what everyone imagined..."

"Take upstream key parts as an example. Hydraulic components, transmission systems, and engines account for more than 40% of the manufacturing cost. They are extremely critical core parts. More than 70% of the industry's profits are occupied by imported parts manufacturers... In fact, the country has always hoped that all units can make breakthroughs in the process and technology of these core parts, even if it costs a lot. It is worth it."

"However, it is regrettable that Dezhou Heavy Engineering Machinery Factory has not made any effective R&D investment in the materials, structural design and technology of the three major parts in recent years; instead, it directly imported relevant spare parts for assembly..."

When Li Bo heard this, his eyes suddenly went dark.

Got it!
I just randomly picked a failed company on the spot.
As a result, I ran into the muzzle of the gun again!

Looking at the thick documents in front of Zhang Wenshun and the calm smiling face, Li Bo suddenly felt a bitter taste in his mouth.

Judging from the situation, maybe they are not sharpening their weapons before the battle?

That is to say...

Li Bo couldn't help but look at Kuai Hua next to him, and the corners of his mouth twitched a few times.

Damn~
This bone is impossible to chew, okay~!!
(End of this chapter)