Age of Legends

Chapter 328 Layout
This wasn't the first or second time Wang Shuowei had been so confused, but as his favorite minister, what could he do but let him be?

However, judging from Shen Nuoyi's reaction today, although she said on the surface that the family matters did not affect her and would not affect her speed in writing and doing problems, she was clearly in a better mood after receiving Zhang Chen's promise after he talked things out.

What does this mean...? This girl is the most stubborn of all.
Of course, how to help is still a problem. The key is how Zhang Chen should approach Zhang Zhonghua. Of course, using Shen Nuoyi's father as an excuse to truly get Zhang Zhonghua to take the LCD project seriously is also the main task at present.

In Zhang Chen's view, although Zhang Zhonghua was the vice president of LG Philips Rongcheng Chenguang Company and the leading Chinese technical figure, the Koreans ultimately held more power in the joint venture, with a roughly 60/40 split in terms of influence. This was even with Namkwang Company siding with Zhang Zhonghua. In reality, Namkwang Company was adept at internal strife; if they couldn't handle the Koreans, they could certainly handle the Koreans.

They can't deal with Zhang Zhonghua right now, but once the sweet spot of CRT technology is over and the market starts to fatigue, Zhang Zhonghua's influence will decline. Zhang Chen is almost certain that Zhou Ping and Ding Shenghua of Nanguang Company will cause trouble.

The only possibility for Zhang Zhonghua to break free from these constraints is a breakthrough in LCD technology, which might even allow him to catch the South Koreans off guard in the end.

Zhang Chen felt that if this step could be successfully completed, it would be quite feasible.

This was back in 2001. After all, it was BOE at that time, and it was only doing module OEM manufacturing, essentially just sitting on the sidelines of the supply chain. At the same time, Japan and South Korea had already started 5th and 6th generation lines to produce large-size glass substrates for the high-end market of large TVs.

It wasn't until 2003 that BOE was forced to acquire Hyundai's third-generation TFT-LCD production line in South Korea, thus truly entering the high-generation panel market.

In other words, it was bought from Koreans who discarded their products.

At the same time, BOE has not kept up with the pace in driver ICs. Toshiba, Panasonic, Samsung, and even Novatek from Taiwan are ahead of it, so BOE has been subject to others for more than a decade.

Now that Zhang Chen has a renewed vision and Zhang Zhonghua has made progress to this point, why can't I do something to help Zhang Zhonghua take his career to the next level, and at the same time make some efforts to promote and accelerate the rise of domestic LCDs?

Of course, it's impossible to start production lines for glass substrates in the upstream supply chain. In such capital-intensive and technology-intensive fields in the upstream of the entire supply chain, you won't see results without burning through billions of dollars.

What should we use to burn it?

Even if Zhang Zhonghua's joint venture factory is worth 1 billion yuan, even if all the Koreans were sold off and the Nanguang factory was mortgaged, it still wouldn't be enough to reach the upstream of the industrial chain.

So when Zhang Chen returned home and talked to Zhang Zhonghua about it, Zhang Zhonghua had the same attitude.

"LCD? Large-size panels? How much would it cost to build a fifth-generation production line? Not to mention tens of billions, it would certainly cost several billion. And that's just the cost of the production line itself. The subsequent technology research and development, yield rate ramp-up, patent barriers... aren't all of these money-devouring beasts?" Zhang Zhonghua, at home, didn't mock Zhang Chen's idea after he returned. Instead, he pointed to the coffee table from a realistic perspective.

"I know you're optimistic about the future and think CRTs are doomed. I agree with that to some extent, but not entirely. CRTs have their own applications, which are different from LCDs. Yes, I also believe in the future of LCD technology, but the problem is, what opportunities do I, your father, have? With the resources of this joint venture? Not to mention that those guys at Nanguang Factory who only know how to fight amongst themselves wouldn't agree, even if they have the technology in South Korea, they won't budge on us. In their view, the Rongcheng joint venture is just exporting production capacity to Southeast Asia. The high-end market isn't their design, so currently the joint venture is just making CRTs to supply the 29-inch flat-screen market as their cash cow, making money as much as possible every day."

Zhang Zhonghua actually enjoys these conversations with Zhang Chen. On one hand, it's a way for father and son to strengthen their bond; on the other hand, he can see Zhang Chen's maturity, and analyzing industry matters together broadens their horizons. Furthermore, many of his own ideas for getting to where he is today have been achieved through such exchanges with Zhang Chen and his father, with Zhang Zhonghua encouraging and supporting him.

Putting everything else aside, his opinions and ideas, in retrospect, have been flawless. After all, the family's first pot of gold came from his advice, and now Zhang Chen holds a very high position in the family. Even Huang Huifen can't easily suppress him; she always has to consider Zhang Chen, otherwise she'll have to deal with Chen Xuran, her sworn sister and business partner.

After Zhang Zhonghua finished speaking, Zhang Chen slowly said, "Dad, you're right. Directly launching an LCD production line is indeed a pipe dream. We don't have that capability right now, and there's no need for us to confront it head-on."

“But Dad, we don’t necessarily have to tackle the toughest challenges right away. The industry chain is very long. Can we start with the parts that we can do, that require relatively little investment, and that yield quick results?”

"For example?" Zhang Zhonghua raised an eyebrow, showing interest.

Zhang Chen said, "For example, the design and initial tape-out verification of the driver IC." "This is the core brain of the panel, with high technical barriers. However, the initial investment is mainly in talent, design tools, and tape-out costs. Compared to production lines that cost billions, it's insignificant. But if we grit our teeth, we might be able to achieve it. Moreover, once we make a breakthrough in the driver IC, we will have a say, and in the future, whether it's seeking cooperation or using it as a technological bargaining chip, it will be very worthwhile."

He paused, observing Zhang Zhonghua's thoughtful reaction, and continued, "For example, we could not focus on large-size TV panels at first, but instead target the rapidly emerging field—small-size TFT-LCD screens for mobile phones, MP3 players, and digital cameras. The market demand is large, the technical barriers are relatively low, and the investment is much smaller. I believe this is a period of explosive growth in the future. We should first establish a foothold in the small-size field, accumulate technology, talent, and capital, and then plan for greater development."

"We don't necessarily have to develop everything from scratch ourselves. Dad, with your many years in the industry and your current position, perhaps you could keep an eye out for... small and medium-sized technology teams in South Korea or Japan, or small companies holding certain key patents but struggling financially, that are interested in selling or collaborating with us? We can try to reach out and acquire some key technologies at a lower cost, shortening our start-up time."

Zhang Zhonghua suddenly stared at Zhang Chen.

He was just an engineer who rose to a core position through patents, but when it comes to doing business and running a company, he had no experience whatsoever.

But Zhang Chen, his own son, was like someone opening window after window for him.

This is no longer wishful thinking; it represents some genuinely actionable ideas. In particular, the points regarding starting with smaller sizes and seeking technology acquisition opportunities are directions he hadn't considered in depth before. The vision and strategy of joint ventures are often dominated by the South Korean side, who tend to be conservative and focused on maintaining existing profits.

However, besides his role in the joint venture, he also holds the position of president of Chenguang Display Technology, a strategic company established by the State-owned Assets Supervision and Administration Commission and the Rongcheng Municipal Government.

“Dad, your current position at Chenguang Factory is based on the FD29 technology. Once the market declines, the joint venture may sideline you. But if you can take the lead in LCD modules, then the strategic initiative will be in our hands.”

“Driver ICs and small-sized screens… that’s definitely a direction worth exploring. As for technology acquisition…” Zhang Zhonghua pondered for a moment, “I’ve vaguely heard that there’s a small Japanese company that makes backlight modules, and it’s looking for a buyer due to operational problems. It’s not large, but its technology is somewhat unique. And in South Korea, the news that Hyundai is divesting its LCD business doesn’t seem to be unfounded…”

Zhang Zhonghua pondered for a moment, then suddenly remembered something and quickly looked over, which startled Zhang Chen. He said, "You came home today and talked to me about all this, even about the possible future direction of the joint venture. What do you mean? Do you already have some ideas?"

No one knows a son better than his father. Zhang Zhonghua, from Zhang Chen's unusual behavior, realized that the old saying he had known since childhood was true: "You little brat, just by moving your butt in front of me, I know whether you're going to poop or pee."

Zhang Chen remained calm: "Dad, it might just be a coincidence. I learned from my godfather about a company that has invested in module packaging equipment. However, this company only has packaging equipment and does not supply substrate drivers. The other party is also quite reliable. I think this company might be able to set up an assembly and bonding line for our self-produced small-sized screens."

Zhang Zhonghua asked, "You mean, LCD component manufacturers?"

“Yes, we can use this to support the first batch of local LCD component manufacturers. I think that since large-size LCDs are now a battleground for many large companies, small-size LCDs are a breakthrough point that they look down on but you can’t. If we start working on driver ICs and develop small-size screens, and then combine them with component manufacturers for production, wouldn’t that be the first small-size LCD production line? This is also a preparation that M&G Display Technology can make.”

Zhang Zhonghua nodded. "I understand what you mean. Since it comes from my godfather, it's probably reliable. I can consider contacting him and pushing things forward?"

Zhang Chen nodded hastily. He breathed a sigh of relief, thinking that at least they had opened up the conversation, and he could at least set up a scheme silently to bring the two sides together.

At this moment, Zhang Zhonghua's gaze swept over Zhang Chen for a moment, and then he said something that startled Zhang Chen: "This factory, was it really mentioned by your godfather? Or was it something you saw or heard somewhere else?"

"Then you can ask Wang Bowen later." Zhang Chen said defiantly, his voice sharp but his tone weak.

Zhang Zhonghua nodded.

(End of this chapter)