The car giant started by marrying the daughter of the king

Chapter 423 Seize the tail of opportunity and start the electronics industry

"In his position, seek his position."

“It’s impossible to have it as easy as you want.”

"But after I became familiar with the work I was responsible for, I was no longer panicked."

“It doesn’t matter whether you are busy or not.”

Zhu Jiansheng has a pretty good attitude. He is not someone who wants to be lazy.

Feeling a sense of accomplishment in the work he does is more important to him than anything else.

"Dad, isn't there a rumor that the higher-ups are going to continue to reform the organization and merge the Ministry of Electronics Industry with the Machinery Industry Committee to form the Ministry of Machinery and Electronics Industry?"

"Our group is planning to enter the electronics industry in the future. In order to avoid gossip as much as possible, I plan to start planning the electronics industry, especially the semiconductor industry, in advance this year."

Although it is a family gathering, the topics discussed inevitably involve specific work.

This is also something that can't be helped.

Fortunately, both sisters Zhu Ling and Zhu Fang, as well as Zhu Jiansheng and his wife, have become accustomed to this situation.

When talking about work, it was usually Zhu Jiansheng and Jiang Hui who communicated, with Wu Ming occasionally interjecting.

However, he is only familiar with the metallurgical industry, especially the steel industry, and he generally does not easily express his opinions on other matters.

“Semiconductor industry?”

"In recent years, the funds from higher authorities have basically been invested in the chemical industry to solve the problems related to the national economy and people's livelihood first."

"Investment in the semiconductor industry has been very small, and the limited investment has come from the import of second-hand wafer lines and chip processing equipment from abroad by various electronics factories."

"In terms of technological research and development, we have completely fallen behind the international advanced level."

"Would it be a bit awkward for your group to get involved in the semiconductor industry now?"

"After all, the domestic factories in the low-end market can't even satisfy their needs, so your group basically has nothing to do with it."

"As for the high-end market, you don't have the technology in this area at the moment, so it would be a bit difficult to develop it."

Ever since Jiang Hui mentioned to Zhu Jiansheng last time that the Ministry of Electronics Industry would also be merged into the Machinery Industry Commission, Zhu Jiansheng has paid more attention to the affairs of the Ministry of Electronics Industry.

He was also preparing for his future work in advance to avoid being unable to give any opinions when his superiors came to him for formal communication.

"It is precisely because each domestic electronics factory is now operating independently that a lot of chip processing equipment obsolete in the United States has been introduced."

"According to preliminary statistics I asked someone to collect, in the past decade we have imported 20 to 30 pieces of second-hand wafer and chip processing equipment from the United States."

"These wafer fabs can generally only produce three-inch wafers, while the mainstream international wafer fabs are five-inch wafer fabs, and some fabs are even producing six-inch wafers."

"And we don't even have a four-inch wafer fab in our country."

Jiang Hui discussed semiconductor industry matters with Zhu Jiansheng today, and naturally had done some preparatory work before that.

Otherwise, there is no way to make your words meaningful.

This is obviously not in line with Jiang Hui's style of doing things.

"As for the chip manufacturing process, the processing equipment we imported is even more backward."

"Many factories have imported 5-micron process equipment. It seems that one production line only costs three to five million US dollars, which seems very cheap."

"If the production capacity can be fully utilized after these devices are introduced, it would be meaningful."

"After all, whether the chips produced are used to export and earn foreign exchange or to meet the needs of domestic factories, they are valuable."

"But because too much second-hand equipment was imported at once, the domestic demand for related industries did not increase."

"In terms of export earnings, people's demand for outdated chips is also declining."

"Ultimately, more than half of the factories have significant capacity constraints."

Jiang Hui continued to talk about the problems currently facing the domestic semiconductor industry.

In fact, in the 1970s and even in the early 1980s, the domestic semiconductor industry was not considered backward.

However, in the past decade, and especially in the past five years, relevant departments have not made any major investments in the semiconductor industry.

Also, due to the adjustment of the factory profit and tax payment method, each factory only cares about profits and does not pay attention to new product research and development.

Therefore, even if they make money, they will use it to expand production scale and continue to purchase second-hand equipment instead of developing new technologies themselves.

As a result, the level of domestic chip technology has clearly fallen behind that of the United States and Japan.

Even the semiconductor industries in Korea and Formosa Province quickly caught up and surpassed China's performance.

I have to say, this is really a very regrettable thing.

"This is indeed a big problem, but right now our entire country is still in a difficult situation and funding is limited."

"Dozens of major projects have been cancelled over the years."

“Didn’t the Sanqi project also get scrapped due to insufficient funding?”

"Then some very important projects such as the Y-8, lithography machine, Z-, long-range bomber, and large missile destroyer were also successively cancelled due to various reasons such as insufficient funds."

"The semiconductor industry as a whole is underfunded and underinvested in research and development. There is nothing we can do about it."

Zhu Jiansheng had previously worked within the Fifth Ministry of Machine Building and was very familiar with many aspects of the military industry.

Among the various major projects that have been cancelled, military projects are significantly more numerous than civilian high-tech projects.

No one wants these projects to be cancelled, but there is no other choice but to make some choices after analyzing the pros and cons of the situation at the time.

Because the overall funding is limited, some projects are more important and have higher priority, so we will definitely give priority to ensuring investment in these projects.

For example, a large ethylene project, such as investing in an ethylene plant with an annual production capacity of 30 tons, would require an investment of several billion yuan.

This was tens of billions of yuan in the 1980s.

When most people’s salary was only a few dozen yuan a month, tens of billions of yuan were worth more than hundreds of billions of yuan in later generations.

Even in later times, there are not many projects that require investments of hundreds of billions of yuan.

In any province, it was the largest project of the year.

However, ethylene, a chemical raw material, is one of the most basic materials and is absolutely indispensable for a big country.

Many people may not know that ethylene is actually a basic material second only to cement and steel.

It is the most important petrochemical raw material and an essential raw material for various resins, fibers, rubber and other products.

But it is also the key raw material related to food and clothing.

八十年代华夏通过“四三计划”引进了26个项目包括13个大化肥项目、4个化纤项目和1套大乙烯项目，也就是燕山石化30万吨乙烯联合装置。

These investments have taken up the funding for many other major projects.

Of course, this does not mean that these investments are meaningless.

On the contrary, these investments are extremely necessary.

If we really need to re-weigh the pros and cons, it is likely that the final decision will still be to prioritize the basic chemical industry.

Large aircraft, bombers, and destroyers still have to give way to these projects.

Otherwise, we might become like a polar bear, with heavy industry developed but light industry not doing well, and a lot of problems.

"Dad, I understand what you said."

"Our group is not short of money right now. In fact, due to the excellent performance of Land Rover and other models in the international market, the cash flow in our account has always been sufficient."

“So in the next few years, I want to expand the group’s business scope and develop the equipment industry and the semiconductor industry.”

"Especially the semiconductor industry, taking advantage of the fact that the relationship between the United States and us is still good, and taking advantage of the fact that their country strongly supports chip manufacturers to eliminate old equipment and invest in new equipment and new processes."

"We will introduce a 5-inch wafer fab and 3-micron chip processing equipment and packaging and testing equipment from them."

"In this way, we can quickly become China's most advanced semiconductor manufacturer."

"In the process of introduction, we fully digested and absorbed their technology. In the next stage, we can upgrade the process and research and develop related equipment."

"When we invest in a 6-inch wafer fab and a new 1-micron process plant, we can localize some of the equipment and continue to import some from abroad."

“We will strive to completely complete the localization of chip production equipment and materials throughout the 1990s, laying a solid foundation for further development in the future.”

Jiang Hui quickly explained his ideas to Zhu Jiansheng.

According to his prediction, even if second-hand equipment is purchased from American chip manufacturers, the investment in all equipment and factories for a 5-inch wafer fab and 3-micron process will exceed US$2000 million.

In this era, it is definitely a big project.

Not to mention that BMW Group needs to take this opportunity to recruit a large number of semiconductor technicians.

These people generally have a high level of education, and they can only be recruited after a series of issues such as housing and children's education are resolved.

"The semiconductor industry can play a big role in the development of high-tech industries, but simply making chips is still not enough, right?"

Since Jiang Hui wanted to enter the semiconductor industry, Zhu Jiansheng naturally had to have a good talk with him from the perspective of industrial development.

After all, the scope of the semiconductor industry is very broad, and how to layout it requires careful consideration.

You can't just hit the nail here and there.

"That's true. In addition to the production of chips, the production of components such as memory, diodes, transistors and PCB boards cannot be left behind."

"Our next step is to develop an electronic fuel injection engine, and all of these components will be needed in the critical engine control unit."

"In the future, we will definitely need to be able to produce these core components ourselves."

“And with the continuous development of the automotive industry, the demand for electronic components will increase.”

"Control units like ECUs are in demand on many components."

"We are making early arrangements now, which can be regarded as preparation for the group to maintain its competitiveness in the automotive industry in the future."

Jiang Hui has a very deep memory of the history of China's automobile industry's shortage of chips in later generations.

A chip that usually costs 5 yuan per piece can soar to several hundred yuan per piece in the market price when there is a chip shortage in 2021.

This is simply a money grab.

The key is that sometimes you can’t even get it.

What's even more disgusting is that the chip shortage has lasted for several years, which is obviously not a normal phenomenon. If China had mastered these chip technologies, a few years would be enough to invest in several new factories.

The chip giants are behind this.

Because people found that if they did not expand production, or even reduced production, the money they earned not only did not decrease, but increased.

In order to ensure the delivery of chips, the payment needs to be made one year in advance.

You wanted to cancel the order, but they didn't give you a chance to do so.

Some chip giants even ask you to pay a large additional security deposit in order to give you the so-called priority supply opportunity.

There were so many strange things happening in the chip industry during those years.

Many Chinese companies suffered heavy losses.

The import amount of chips has reached more than 300 billion US dollars, surpassing oil imports, which is also a heartbreaking situation.

Jiang Hui is now starting to lay out the chip industry. Although it cannot guarantee that China will become the world's most powerful semiconductor country, it will at least be able to catch up with the world's mainstream level in the 21st century without having to worry about being strangled by others.

He is very clear that with the rapid development of the consumer electronics industry, the importance of chips will become increasingly higher.

If you invest in this industry early, the future returns will be very worth looking forward to.

Of course, Jiang Hui is not the only one who can see this.

But if you want to invest in this kind of industry, you must have sufficient funds and talents.

The factories under the Ministry of Electronics Industry were blocked simply because of a funding issue.

As for private enterprises...

Private enterprises are not yet fully developed, and even if they grow stronger in a few years, few dare to easily get involved in this industry with high investment, high risk, but no high returns in the short term.

They have more profitable industries waiting to be invested in.

Why bother with yourself?

"If this is the case, the scale of investment in the semiconductor industry will be enormous."

Zhu Jiansheng is considered an knowledgeable person. After Jiang Hui briefly talked about his ideas, he could roughly imagine the future scenario.

Is it really necessary for BMW Group to do this?

He must have had similar concerns in his heart.

“The greater the investment now, the greater the return in the future.”

“In three to five years, we may not see any profit.”

"But if it continues to develop and becomes a trend in the future, the situation will be completely different."

“Perhaps the semiconductor industry will become the second largest industry in the world after the automotive industry.”

"Even because of our dominant position in the semiconductor industry, our position in the country will change greatly."

Now that Jiang Hui has said so, Zhu Jiansheng will definitely not object anymore.

He knew that for Jiang Hui, money itself no longer had much meaning; it was just a matter of numbers.

At this time, we are more pursuing things at a higher level.

"I'll talk to my acquaintances at the Ministry of Electronics Industry and see if I can recommend you a few experts to help you develop the semiconductor industry."

"Without someone knowledgeable, I'm worried that your group will suffer."

Zhu Jiansheng has no pressure as long as he uses the resources at his disposal reasonably and legally.

Not to mention that in his opinion this matter is beneficial to the country and the people. It is a good thing to continue to maintain the competitiveness of China's semiconductor industry when the Ministry of Electronics Industry is unable to provide research and development funding support to its subordinate semiconductor companies.

Even if it means selling his own favor, he is willing to do it.

As the second-in-command of the Machinery Industry Committee, he had already felt some signs of the institutional reform that Jiang Hui had mentioned earlier.

Then we should act earlier, preferably before this matter is finalized, and let the BMW Group officially enter the semiconductor industry.

"That would be best."

"As long as someone is willing to come, the positions of general manager and chief engineer of the newly established Lingnan Semiconductor in our group can be given up."

"There is no need to worry about welfare benefits in all aspects."

"The most important thing is that I can promise that there will be no upper limit on Lingnan Semiconductor's investment and R&D expenses in the next five years."

"As long as it is conducive to the import of equipment and talents for the development of Lingnan semiconductors, I support it all."

"Both the factory director and the chief engineer will have great authority in the new company, and I will fully respect their professional opinions."

Jiang Hui was originally thinking about how to poach people, but now he doesn’t have to worry about it anymore.

It would be great if Zhu Jiansheng could take the initiative to help take on this task.

With his level of communication with the leaders of the Ministry of Electronics Industry, the level and quality of the experts coming over will definitely not be low.

The candidates for the general manager and chief engineer of Lingnan Semiconductor have most likely been decided.

The recruitment of some other key positions is also worth looking forward to.

Although Lingnan Semiconductor can recruit some talents from the international community, it is better to have core personnel from within the country.

Otherwise, after Lingnan Semiconductor achieves some technological breakthroughs, these people will most likely be poached by other manufacturers.

Jiang Hui doesn't want to be a wedding dress for others.

After all, any company that can poach people from Lingnan Semiconductor is definitely an international giant.

Domestic competitors will not be Jiang Hui's match.

"Have you even decided on a name?"

"Lingnan Semiconductor is more suitable than BMW Semiconductor or Nanshan Semiconductor."

"This will also reduce the influence of your group and gain strong support from Lingnan Province and Shenzhen City."

"In the past few decades, the ministries and commissions have basically not deployed any major semiconductor companies in Lingnan Province."

"Now your group intends to enter the semiconductor industry in a big way, and the relevant leaders are definitely supportive."

Zhu Jiansheng is not worried at all about whether Lingnan Semiconductor can obtain policy support locally.

Such a large enterprise will receive full local support wherever it goes.

Not to mention that Jiang Hui also specially introduced the most advanced wafer production equipment and chip processing and packaging and testing equipment in the country.

If this project is successful, it will enable Lingnan Province to rise rapidly in China's semiconductor industry.

The potential impact is enormous.

"I think so too. The semiconductor industry is relatively independent."

"Lingnan Semiconductor will definitely not be able to just supply BMW Group in the future, as that would severely restrict their development."

"And its main customers should not be car manufacturers, but consumer electronics companies, which have the greatest demand for chips."

There is no way to compare the sales volume of automobiles with that of consumer electronics, home appliances and other products.

Especially in the 1980s and 1990s, only the engine and gearbox control systems of a car needed chips, and other parts were basically traditional mechanical parts.

The trend towards full electronicization only began in the 21st century.

"In the past few years, when domestic semiconductor companies introduced various second-hand equipment, they mainly focused on producing products for export and foreign exchange earning."

“I think you can continue on this path.”

"You can even take a different path, that is, on the basis of producing chips for export and earning foreign exchange, you can directly cooperate with some foreign companies to help them produce chips."

"That is to say, the other party has designed the chip and then handed it over to you for OEM production."

After Zhu Jiansheng said this, Jiang Hui was stunned for a moment.

Chip foundry is indeed an important development route for many semiconductor companies.

Whether it is TSMC, Samsung, or SMIC, they have all made great achievements in this regard.

However, the mainstream practice in the world's semiconductor industry is still to design chips, produce wafers, and process them themselves.

It is not that there is such a thing as OEM, but it is definitely not the mainstream.

It is not easy for Zhu Jiansheng to come up with such a new idea.

"Dad, your plan is great."

"In the future, our Lingnan Semiconductor business will be divided into two major parts: one is to produce chips for ourselves, and the other is the foundry business."

"I believe that with the support of these two businesses, Lingnan Semiconductor will soon become the largest semiconductor company in China."

“It may even become the world’s largest semiconductor company in the future.”

For Jiang Hui, entering any industry is definitely not a small-scale undertaking.

If you are going to do something, you have to do it to the best of your ability. Otherwise, what's the point of going through all the trouble?

"But if you do OEM, you will face a lot of pressure on equipment investment and will also bear huge risks."

Zhu Jiansheng just mentioned it casually, but he didn't expect Jiang Hui to be so serious about developing and expanding the OEM industry.

At this time, Zhu Jiansheng would naturally have some new concerns.

After all, outsourcing is equivalent to taking all the risks on yourself.

The customer just needs to pay and hand over the designed chip to the foundry for production.

It is precisely because of this unique approach that OEM factories have competitive advantages and attractiveness.

After all, not every company is willing to invest huge amounts of money to build wafer fabs and chip factories.

The development path of later generations has proved that OEM is a feasible route.

This can play a great role in rapidly expanding the influence of Lingnan Semiconductor.

Jiang Hui has even thought about which customers Lingnan Semiconductor should work with next.

(End of this chapter)