My 1999

If he hadn't known that the opportunity was rare, and if he hadn't known how high the value of memory chips would be in the future, he would never have touched Hynix.

But it is precisely because of the high debt and the huge forward capital expenditure needs of the semiconductor industry that creditors led by the South Korean government and the Korea Exchange Bank began to promote the sale of Hynix.

However, both Samsung and LG refused to take over this debt-ridden mess, leaving only Micron to cash in on the opportunity.

Taking advantage of the situation, Micron reached an agreement with Hynix President Park Bae-tae. Micron will acquire Hynix's entire memory chip business and 25% of its other businesses with shares worth US$3 billion, and will not accept Hynix's US$6 billion. debt.

In other words, Micron doesn't spend a penny and just wants to get some shares to swallow up Hynix's most valuable memory chip business.

Although Bangzi is very loyal to his masters, you didn't give me any sweetness at all. You even took away all the flowers and pots without telling me, and you gave me a stinking look on my face. You wouldn't do anything to me.

Not surprisingly, this plan was unanimously opposed by Hynix’s board of directors.

In the end, Micron failed to acquire Hynix, and major DRAM manufacturers began to look forward to the market vacated by Hynix's collapse.

This is the dilemma Hynix is ​​currently facing.

If Xu Liang hadn't interfered.

As Hynix’s largest creditor, South Korea’s Exchange Bank did not choose to liquidate Hynix.

Instead, it went ahead and launched an ambitious restructuring plan under South Korea's Corporate Reorganization Promotion Act (CRPA).

CRPA is part of South Korea's national plan to help the country's companies recover from the financial crisis. The law gives the Bank of Exchange the power to appoint Hynix's management and lend Hynix $1.2 billion to complete the reconstruction.

So Exchange Bank established a creditors committee to replace Hynix's board of directors.

This committee is responsible for making all key decisions for Hynix.

Within Hynix, Exchange Bank has set up a financial management team to oversee Hynix’s cash receipts and expenditures.

Finally, the Exchange Bank selected the directors of Hynix, among whom Yu Yiji became the CEO of Hynix.

This guy is a hotshot.

After taking charge of Hynix, in order to improve Hynix's debt situation and ensure its survival, he persuaded the South Korean Exchange Bank to write off Hynix's US$8 billion debt to himself, achieving absolute control and alleviating Hynix's debt pressure.

Then, he prompted Hynix to reach strategic partnerships with many semiconductor companies and form a semiconductor alliance.

One of the more important ones is the cooperation with European chip manufacturer STMicroelectronics.

At that time, both STMicroelectronics and Hynix were targeting the NAND flash memory market.

But STMicroelectronics has strong proprietary design capabilities, but it is not good at chip manufacturing.

Although Hynix has strong chip manufacturing capabilities, it does not have extra funds to build a new factory, so the two parties proposed to build a joint venture.

At this time, China is not only a huge market, but also pursuing higher chip manufacturing processes. The Chinese government has provided very attractive preferential conditions to attract foreign technology investment, and the production costs are also lower compared with other countries.

It is worth mentioning that after Hynix rejected Micron's acquisition offer, Micron sued Hynix to the EU and the United States in 2003.

The European Union and the United States decided to impose 34% and 45% import tariffs on Hynix respectively because Hynix received subsidies from banks controlled by the South Korean government.

Building a joint venture factory in China can avoid paying these high taxes, which further prompted Hynix to choose China to build a factory.

In addition to open source, Hynix has sold many non-core businesses, focusing the company's operations on memory chips, and the funds returned have also reduced some of its debt.

Coupled with the refinancing of existing debt secured by shares, the resulting money once again repaid Hynix's $1.2 billion in debt.

In 2006, with the opening of the Wuxi chip factory, Hynix occupied a large piece of the soaring NAND flash memory business. It earned more than 2 billion US dollars in net profit that year, creating a new profit record for Hynix.

Hynix also successfully climbed out of the quagmire of bankruptcy.

However, things in the world are never smooth sailing.

After the success of Hynix, Professor Yu Yiji, who was in charge of Hynix, retired.

Before he left, he specifically asked him to find someone who understood the industry. As a result, the South Korean bureaucracy appointed Kim Jong-jap, a former minister from the Ministry of Trade, Industry and Energy of South Korea, as his successor.

Minister Jin waved his hand.

Expand, expand, expand!

Smecta wants to become No. 1 in the global DRAM field.

Under the command of Minister Kim, Hynix has migrated a large amount of investment to 56, 36nm DRAM and 48nm NAND flash memory production lines.

Although Minister Kim was ambitious, he ignored the fluctuations in memory chip prices.

In 2007, memory chip prices began to fall.

In September, the price of standard 512MB DDR2 DRAM chips dropped by more than 70% from the beginning of the year. The original price of DRAM chips dropped from US$5.95/piece to US$1.75/piece.

This should have been a warning that Hynix's investment spending was too high.

With chip prices low, Hynix can barely cover its production costs and loan interest, nor can it obtain more financing. Still, Kim is continuing with its aggressive capital spending plans.

As a result, experienced managers within Hynix were increasingly dissatisfied, knowing that high debt levels in the past nearly destroyed the company.

But they had to watch Hynix's debt levels rise again.

Senior Vice President Kwon Oh-chul expressed his concerns.

Minister Kim only felt that his authority was offended.

So, he was soon replaced by another former South Korean Ministry of Trade, Industry and Energy official.

Another Hynix financial expert also raised questions.

Minister Kim’s response was also direct.

If you don't do it, others will.

Therefore, in 2008, he was forced to resign due to the failure of refinancing US$500 million in global convertible bonds.

It can be seen that Minister Jin is worthy of being an official. He is skillful and can suppress his opponent with three strikes, five divisions and two, without leaving anyone with no excuses.

It's a pity that no matter how powerful the tactics are, they can't compete with the law of value.

During the 2008 subprime mortgage crisis, the global economy plummeted, and memory chips also hit rock bottom.

Hynix, which had previously expanded significantly, suffered heavy losses and had to cut spending on expanding its factory in South Korea, postponed its $260 million investment plan to expand its factory in Wuxi, and closed its 200mm chip manufacturing plant in Eugene, Oregon.

Then it received US$700 million in loan assistance from the South Korean government and US$1.6 billion in debt extensions, and finally managed to avoid bankruptcy.

Hynix during this period was miserable.

It was not until 2012 that Hynix, which was stumbling on the edge of bankruptcy, finally found its father.

South Korea's top conglomerate, SK Group, acquired Hynix. With the support of SK Group, an oil refining tycoon, Hynix finally got out of a situation of lack of funds.

After that, in 2013, 2014, 2017, 2018, and 2020, DRAM became the IC segment with the largest growth for several consecutive years. SK Hynix’s performance also gradually increased, and the company changed from a “mess” that no one cared about to a “fragrance.” cake".

Xu Liang knew very well that Hynix was the hot potato.

But he didn't know how Hynix became so popular.

Whether he knows it or not is not the point.

The point is:

First, he has money.

Second, he knew that labor costs in China were low, there were many skilled labor forces, and the market was expanding rapidly, so after acquiring Hynix, he would definitely move the South Korean factory to China.

Third, the subprime mortgage crisis is a big pit and must be avoided in advance.

Fourth, the subprime mortgage crisis is also a good opportunity. Countercyclical investment methods can be used to surpass Samsung and Micron.

Putting down the information that he had read many times, Xu Liang still felt heavy in his heart.

US$16.5 billion in debt is not a small sum.

And there is interest.

Of course, debt is negotiable.

If George W. Bush gets support, he can use the tiger skin of the United States to talk to these creditors, and it will definitely be impossible to reduce the debt.

But debt restructuring, such as delaying the repayment period and only paying back the principal, can still be negotiated.

As long as the debt is sufficient, Hynix has investment value. If South Korea does not accept his conditions, then give up.