Chapter 1032: Polite Rejection
SMIC has been really unlucky in recent years.
After being listed in Hong Kong and the United States in March 2004, SMIC reached its peak.
But before I was happy for a few days, I was slapped in the head by TSMC.
Accused SMIC of patent infringement and theft of business secrets.
Affected by TSMC's lawsuit, SMIC's listing was delayed, but it eventually went public as planned.
In January 2005, SMIC and TSMC reached a phased settlement, and SMIC agreed to pay TSMC US$175 million over the next six years.
Lao Zhang was able to develop TSMC into the world's number one chip foundry under the blockade of the moldy country, and his methods were not ordinary ruthless.
Reconciliation?
I'll kill you!
Less than a year later, TSMC filed another lawsuit.
Accused that SMIC violated the settlement agreement reached with it in 2005 and continued to improperly use TSMC’s business secrets.
The two sides are still fighting a lawsuit.
If there were no accidents, this lawsuit would have lasted for 3 years.
SMIC lost the lawsuit in November 2009 and "cut shares to pay compensation". SMIC had to pay TSMC US$200 million within 4 years and granted TSMC a subscription price of HK$1.30 per share to subscribe for SMIC shares. Warrants for 696 million shares (accounting for 8% of SMIC’s issued share capital at the time).
In addition to political and legal proceedings, the overall chip industry is also in a slump.
In 2004, the year-on-year growth rate of global semiconductor sales reached a peak of 40%, and then entered a downward trend. Starting from the second half of 2005, the monthly year-on-year growth rate was only single digits.
The last one is SMIC itself.
IC manufacturing is a capital-intensive industry, and the depreciation of equipment will put performance pressure on companies in the early stages of production.
SMIC’s equipment depreciation period is generally 5 years. From 2001 when the factory was put into operation to 2006, the first batch of equipment depreciation ended one after another.
The equipment that has passed the depreciation period does not mean that it cannot be used, but will be converted into the company's fixed assets.
Without annual equipment depreciation cutting into profits.
SMIC also briefly achieved profitability in the second quarter of 2006, but the industry-wide decline was difficult to reverse. With the decline in capacity utilization, the third quarter had just begun, and SMIC began to lose money again.
Under such circumstances, Hanhua’s foreign debt of US$1.3 billion is of course impossible to repay.
“Mr. Xu plans to acquire SMIC?”
Leader Zhou's eyes lit up.
Chip foundry is a capital-intensive industry, and the person in front of me happens to be a capital tycoon.
If SMIC is in his hands, it will definitely develop rapidly.
Not only can Magic City become a highland for the domestic chip industry, it can also obtain a large amount of profit and tax income and higher-end jobs.
“It’s not me, it’s Hanhua.”
What Xu Liang wants is to use the liabilities generated by SMIC's high investment to reduce the profits and taxes paid by Hanhua High-yield, and achieve the purpose of maintaining and increasing the value of wealth through disguised investment.
Leader Zhou doesn’t care about Xu Liang or Hanhua, as long as he is willing to invest in SMIC.
"If Mr. Xu acquires SMIC, how does it plan to operate?"
"Hanhua will directly acquire all the shares of SMIC and delist from Nasdaq and Xiangjiang."
“Delisting?
Why delist? If it is delisted, won’t there be no channels for raising capital? "
A listed company in the high-tech field these days, and it is also the third largest chip OEM company in the world, and it is also an excellent business card for Shanghai.
"Leader Zhou, chip Foundry is a capital-intensive enterprise. Hanhua will invest at least US$10 billion in SMIC in the next three years to build three 12-inch wafer foundries. ”
“10 billion US dollars? 3? ”
“Yes. ”
Leader Zhou was surprised by Xu Liang's generosity.
But he also understood that the man in front of him did have the capital to achieve it.
“Are these three production lines all located in Magic City?”
This is the key point.
“A production line will be placed in the Magic City.”
Resources need to be exchanged.
Modu exchanged Bright Food and Bright Dairy for BOE’s 7.5-generation panel production line and a US$3 billion investment and a monthly output of 50,000 12-inch 65nm wafer fabs, which is enough.
BOE’s production line was exchanged for Bright Food, and its chip foundry was exchanged for Bright Dairy.
"Mr. Xu, if all three lines are placed in the Magic City, what are the conditions required?"
Xu Liang shook his head.
"Leader Zhou, the industry needs to be laid out. No matter what conditions you give, I can't put all three lines in Magic City.
Moreover, even if you want to sell, the rules and regulations will not allow it. "
"Mr. Xu, you might as well talk about it if we can go back."
Xu Liang smiled slightly, "SAIC Group"
Leader Zhou. His expression changed.
SAIC Group is to the Magic City just like Hanhua, Hongmeng and Xu Liang are the absolute core and their biological son.
"Overall?"
"Of course."
Leader Zhou quickly understood.
The other party deliberately set an almost impossible goal in order to make them quit. After understanding their respective bottom lines and conditions, Leader Zhou didn't mention work anymore.
The two of them ate and drank and left at nine o'clock.
Watch the car drive away.
"Mr. Xu, do you think the Magic City will agree to our conditions?" Li Jinling asked.
“I don’t know.
But it doesn't matter whether you agree or not.
We have no shortage of customers. ”
The three 7.5-generation lines planned to invest at the end of this year have already found targets.
If the 8-generation line wants to break through, it will have to wait until at least the end of 2007 or the beginning of 2008. He still has nearly Two years to select where to build the 8th generation line.
The important thing is SMIC.
"Have you made an appointment with Zhang Rujing?"
"We have made an appointment to meet at the Hongyan Magic City Headquarters, No. 9 on the Bund, at nine o'clock tomorrow morning."
"Let's go home. . ”
By the time he returned to No. 5 Courtyard of Tan Palace, the night was already dark.
Seeing that the lights were still on in the study, Xu Liang changed his clothes and pushed the door open and walked in.
"Why are you still up so late?"
Lu Hui put down the information in her hand.
“I asked someone to help me collect information on the recently auctioned land in Beijing, Shanghai, Guangzhou and Shenzhen.”
“There is no rush about your future home. The most important thing for you now is to have a good rest. "
After Lu Hui nodded, "How about you, how was your meeting with Leader Zhou today?"
"It's okay. My conditions have been given. It's up to them whether they want to accept the next step."
Picked up the information in Lu Hui's hand and flipped through it briefly.
"Communicate with Lu Jue and the others. They have rich experience in the real estate industry. As long as you make a request, they will be able to find suitable land for you. It is much more efficient than trying to find it yourself now. "
Lu Hui suddenly realized.
"They say one pregnancy makes you stupid for three years, and now it turns out that they are right. I am really dizzy. There are obviously ways to save energy."
"Okay, go and have a rest.
It's almost ten o'clock. If you don't take a rest, you won't be stupid for three years, but four years and five years."
He said it blankly After a quick glance, Lu Hui slowly stood up.
The escort who had been standing next to him hurriedly came over.
He helped her stand up straight, one on the left and the other on the right.
Whenever a woman around him becomes pregnant, he will arrange a professional escort team.
There are nurses, doctors, nutritionists, child care providers, etc. to provide ultimate and thoughtful protection.
"Then I'll go to bed first. Don't work too late."
"Don't worry."
After watching her leave, Xu Liang found the book from the bookshelf. Read the detailed information of Core International.
Since its development in 2000, SMIC has a total of three production lines in three production areas: Magic City, Beijing and Tianmen.
The first line is the earliest Modu Factory.
Process: 0.35um~90nm;
Planned production capacity: 100,000 pieces/month;
In fact, SMIC started with memory products, and the initial technology The source is Japan Fujitsu;
Later, 0.18 and 0.13 micron logic chip processes were introduced from Singapore's Chartered Semiconductor and Belgium's Microelectronics Research Center respectively.
The second line is the Jingcheng factory.
Different from the 8-inch model produced by the Modou factory, the Jingcheng plant produced the most advanced 12-inch model from the beginning.
Only three years later than the completion of the world's first 12-inch line, this was considered a major breakthrough in China's semiconductor industry at the time!
The main technical source is the technical support from Infineon.
On December 9, 2002, SMIC and Infineon announced the signing of a cooperation agreement for the production of DRAM. Infineon will transfer its 0.14-micron DRAM trench technology to SMIC.
In order to get this production line, Lao Zhang also tried his best.
Thanks also to SMIC’s breakthrough.
Hynix's Wuxi fab has a monthly production capacity of 50,000 wafers, and only then can the equipment of the 12-inch wafer fab be shipped to China smoothly.
Unfortunately, the production capacity of the Beijing factory is smaller.
The monthly production capacity is only 60,000 pieces, but the technical standards have been improved, and the process has reached 0.18um~55nm.
The last one is Jinmen No.3 Factory.
In October 2003, Motorola's newly appointed CEO sold his Tianjin factory to SMIC at an ultra-low price of US$290 million.
On January 16, 2004, SMIC and Motorola completed all matters regarding the transfer of MOS17 located in Tianjin.
At the same time, the two parties established a strategic OEM partnership.
SMIC's production capacity has doubled.
(End of this chapter)