My 1999

SMIC has been really unlucky in recent years.

After listing in Hong Kong and the United States in March 2004, SMIC reached its peak.

But it was hit hard by TSMC before it could be happy for a few days.

SMIC was accused of infringing patents and stealing trade secrets.

Affected by TSMC's lawsuit, SMIC's listing time was delayed, but it was finally listed as expected.

In January 2005, SMIC and TSMC reached a phased settlement, and SMIC agreed to pay TSMC $175 million in the next 6 years.

Zhang was able to develop TSMC into the world's number one chip foundry company under the blockade of the United States, and his methods were not ordinary.

Settlement?

Kill you!

Less than a year later, TSMC filed a lawsuit again.

Accusing SMIC of violating the settlement agreement reached with it in 2005 and continuing to improperly use TSMC's trade secrets.

The two parties are still in litigation.

If nothing unexpected happened, the lawsuit lasted for 3 years.

SMIC lost the lawsuit in November 2009 and "cut its shares to pay compensation". SMIC had to pay TSMC US$200 million within 4 years and grant TSMC a subscription price of HK$1.30 per share to subscribe for 696 million shares of SMIC International (accounting for 8% of SMIC's issued share capital at the time).

In addition to political and legal proceedings, the entire chip industry is also in a downturn.

In 2004, the year-on-year growth rate of global semiconductor sales reached a maximum of 40%, and then entered a downward space. Starting in the second half of 2005, the monthly year-on-year growth rate was only in the single digit.

Finally, it is SMIC itself.

IC manufacturing is a capital-intensive industry, and the depreciation of equipment will bring performance pressure to companies in the early stages of production.

The depreciation period of SMIC's equipment is generally 5 years. From the start of production in 2001 to 2006, the depreciation of the first batch of equipment was gradually completed.

Equipment that has exceeded the depreciation period does not mean that it cannot be used, but will be converted into the company's fixed assets.

There is no annual equipment depreciation to reduce profits.

In the second quarter of 2006, SMIC also achieved a short-term profit, but the decline of the entire industry was difficult to reverse. With the decline in capacity utilization, SMIC began to lose money again at the beginning of the third quarter.

Under such circumstances, Hanhua’s $1.3 billion foreign debt was 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 man in front of him happens to be a capital tycoon.

If SMIC is in his hands, it will definitely develop rapidly.

Not only can Shanghai become a highland of the domestic chip industry, but 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's high returns, and achieve the purpose of wealth preservation and appreciation 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 will it operate?"

"Hanhua will directly acquire all the shares of SMIC and delist from NASDAQ and Hong Kong."

"Delist?

Why delist? If it delists, won't it lose the channel to raise capital?"

A listed company in the high-tech field these days, and the world's third largest chip foundry company, is also an excellent business card for Shanghai.

"Leader Zhou, chip foundry is a capital-intensive enterprise. Hanhua will invest at least $10 billion in SMIC in the next three years to build three 12-inch wafer foundries."

"10 billion US dollars? Three?"

"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 realize it.

"Are all these three production lines in Shanghai?"

This is the key point.

"One production line will be in Shanghai."

Resources need to be exchanged.

It is enough for Shanghai to exchange Bright Food and Bright Dairy for BOE's 7.5-generation panel production line and a 12-inch 65nm wafer fab with an investment of 3 billion US dollars and a monthly output of 50,000 pieces.

BOE production line for Bright Food, chip foundry for Bright Dairy.

"Mr. Xu, what conditions are required to put all three lines in Shanghai?"

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 Shanghai.

Moreover, even if you want to sell, the rules and regulations do not allow it."

"Mr. Xu, why don't you talk about it? Can we discuss it when we go back?"

Xu Liang smiled slightly, "SAIC Group."

Leader Zhou's face changed.

SAIC Group is to Shanghai, just like Hanhua and Hongmeng are to Xu Liang. It is the absolute core and the son.

"As a whole?"

"Of course."

Leader Zhou quickly understood.

The other party deliberately proposed an almost impossible goal in order to make them retreat.

After understanding each other's bottom line and conditions, Leader Zhou did not mention work again.

The two of them ate and drank, and the party ended at nine o'clock.

Watched the car go 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 they agree or not.

We don't lack downstream customers."

The three 7.5-generation lines planned to be invested by the end of this year have already found targets.

If the 8th generation line wants to break through, he will have to wait at least until the end of 2007 or early 2008. He still has nearly two years to select where to build the 8th generation line.

What matters is SMIC.

"Have you made an appointment with Zhang Rujing?"

"We have made an appointment to meet at the headquarters of Hongyan Magic City, No. 9 on the Bund, at nine o'clock tomorrow morning."

"Let's go home."

By the time he returned to Tan Gong Courtyard No. 5, the night had already darkened.

Seeing that the lights were still on in the study, Xu Liang opened the door and walked in after changing his clothes.

"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 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."

Lu Hui nodded, "What about you, how was your meeting with Leader Zhou today?"

"It's okay. I've given you my conditions. It's up to them whether they want to accept it next."

She picked up the information in Lu Hui's hand and briefly flipped through it.

"You should 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 searching for it yourself now."

Lu Hui suddenly realized.

"They say that pregnancy makes you stupid for three years, and now it turns out that it's true. I'm really dizzy. There are obviously ways to save energy."

"Okay, let's go and rest.

It's almost ten o'clock. If I don't rest, I will not be stupid for three years, but stupid for four years, and five years. "

Rolling her eyes at him, Lu Hui slowly stood up.

The escort who had been standing beside him hurriedly came over.

One left and one right helped her stand upright.

Whenever a woman around him becomes pregnant, he will arrange a professional escort team.

There are nurses, doctors, nutritionists, caregivers, etc. to provide ultimate and thoughtful protection.

"Then I'll go to bed first and don't work too late."

"Don't worry."

After watching her leave, Xu Liang found the detailed information on SMIC from the bookshelf and read it.

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 its initial technology source was Japan's 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 ones produced by the Modu factory, the Jingcheng factory started with the most advanced 12-inch ones.

It was only three years later than the completion of the world's first 12-inch line, which was considered a major breakthrough in China's semiconductor industry at the time!

The main source of technology is technical support from Infineon.

On December 9, 2002, SMIC and Infineon announced a cooperation agreement to produce DRAM. Infineon would 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 Wu#xi factory has a monthly production capacity of 50,000 wafers, so the equipment of the 12-inch wafer fab can be successfully shipped to China.

It's a pity that 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.

Finally, there is the third factory in Jinmen.

In October 2003, Motorola's newly appointed CEO sold his Tianjin factory to SMIC for 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 foundry partnership.

SMIC's production capacity has doubled.