My Age of Investment

After listening to Xia Jingxing's explanation, many people showed expressions of sudden realization.

It can be regarded as a new understanding of the role and significance of the Industrial Renaissance Fund.

It is good for entrepreneurs to have a passion for making chips, but it cannot be used as food. If China's chip industry wants to develop better and better, it needs to develop a successful business model and follow a path of sustainable development.

Now they have figured out some of Xia Jingxing's business operation ideas.

First, if the fund invests heavily in start-up chip companies, it can reap the dividends from the development of China's chip industry, and the profits will then feed back into the revitalized industry and help its development;

Second, investing in various chip companies, including mobile phone chips, Internet of Things chips, automotive chips, etc., is equivalent to sorting out and selecting the supply chain of Fuxing Industrial Group's industries, and at the same time providing money and orders to help its development. If the invested enterprise develops well, Renaissance Industrial Fund, as a shareholder, will also benefit;

Third, chip companies that have received investment will enter into cooperation with Fuxing Semiconductor, which in turn will give Fuxing Semiconductor foundry orders and help Fuxing Semiconductor grow.

If a closed business loop is formed like this, the development of Fuxing Semiconductor and even the entire Fuxing Industrial Group can be given a pair of wings and fly high.

This integrated development path of marketization, industrialization, and financialization seems to be stronger and more scientific than spending 100 billion yuan on R\u0026D.

Xia Jingxing actually didn't expect it to be as complicated as they did. Instead, he insisted on his own industrial investment philosophy of "a single bloom is not spring, and a hundred flowers bloom and the garden is full of spring".

This is just like the barrel effect. How much water a bucket can hold depends on its shortest piece of wood.

Even if Fuxing Semiconductor reaches the pinnacle of chip manufacturing, international manufacturers will not place orders and the import of manufacturing equipment will be banned. It will immediately be in trouble.

To break through this shackles, we can only take the road of "common prosperity" and bring the overall level of China's chip industry to a higher level.

In the short term, this goal is somewhat out of reach.

But looking at it separately, Fuxing Industrial Group’s own industries compete for resources in overseas markets, and then give supply chain orders to domestic manufacturers. Isn’t it just to lead everyone to become rich and well-off together?

In addition, the Renaissance Industrial Fund also provides financial assistance, allowing domestic manufacturers to increase research and development efforts and try to make some breakthroughs in technology.

With a multi-pronged approach, the overall chip industry level can improve by one point.

There are not many shortcuts to upgrade the chip industry. We can only accumulate strength step by step. Only those who survive can talk about innovation and transcendence.

If we change to another country, like a company, like Wisdom Fruit, we only need to focus on chip design, because no one is blocking it.

But if we can't revive the industry, we can only choose to drag everyone forward with the burden.

Fortunately, Vision Capital has been responsible for injecting blood into Fuxing Industrial Group, otherwise the initial investment alone would not be able to support it.

Xia Jingxing raised his hand, indicating to Liang Mengsong to continue speaking, and asked any difficulties he had.

Liang Mengsong understood, and then reported: "This factory in Shanghai is an 8-inch wafer factory. Now major wafer foundries around the world are investing heavily in building 12-inch wafer factories. I think we must also seize this transformation opportunity." , we can’t fall behind.

The larger the wafer size, the higher the efficiency available.

Compared with 8-inch wafers, 12-inch wafers can use more than twice the area and are more cost-effective.

Products cut from 8-inch wafers are mainly used in standard logic, embedded non-volatile memory, mixed signal, radio frequency, image sensors, power management, power devices and other chips.

Most of the 90-nanometer and more advanced processes use 12-inch wafers.

What causes this?

As we all know, the larger the silicon wafer, the more blocks can be cut out, which saves material.

At the same time, due to the higher chip manufacturing costs of advanced processes, it is more economical and cost-saving to use 12-inch wafers for advanced chip manufacturing.

My suggestion is that the second factory in Beijing should be built as a 12-inch wafer foundry. "

Xia Jingxing nodded lightly, "It will take at least more than a year from planning to building the factory and then putting it into production.

After more than a year, the operation of the Magic City factory should be back on track and mass production should be achieved.

At this time, the Beijing factory can take on the task of breaking through the 65nm process. "

Liang Mengsong said with a smile on his face: "Yes, that's what I mean. We cannot relax at all in catching up with advanced manufacturing processes, otherwise we will be left behind by three generations of technology."

Xia Jingxing asked: "What is the budget investment?"

Liang Mengsong replied: "At least 2 billion U.S. dollars are needed, and 3 billion U.S. dollars would be the best, because the wafer fab production line and supporting factories of the Magic City factory have already spent 778% of our first batch of 1 billion U.S. dollars. Eight.

We need a certain amount of funds to maintain the company's daily operations, because the Modu factory has not yet generated positive cash flow.

Employee wages, R\u0026D investment, etc. all require a lot of money.

Even if we don't take into account the depreciation of the factory, it will be difficult for us to achieve profitability in the first one or two years. "

Hearing this, although the shareholders present knew that the chip industry was a bottomless pit, they did not expect Liang Mengsong to be so tossing.

It will only take a little more than a year, and I will not mention it as I have almost finished 1 billion U.S. dollars. Next, I will invest at least 2 billion U.S. dollars.

They discovered that if things continue to develop at this pace, Mr. Xia's 100-billion-dollar fund doesn't seem to be an incredible figure. It will bring disaster to you in a few years.

Some people turned their attention to Xia Jingxing, wanting to see what Mr. Xia's face looked like.

Xia Jingxing's face remained as usual, acting very calm.

He glanced at the shareholders and knew without asking any further questions that they had no hope for the time being, and that he would have to raise the second round of financing for Fuxing Semiconductor himself.

"Come up with a plan, and then start negotiations with the Beijing government as soon as possible. The Renaissance Industrial Foundation will transfer the money to the account in several installments. According to the best plan you mentioned, a total of 3 billion US dollars will be allocated."

Xia Jingxing's straightforwardness surprised Liang Mengsong so much that he couldn't even utter all the words he had prepared.

However, he still said a few words to prove that he was not fooling around.

"Fuxing Semiconductor is now in the catching-up stage. Huaxin International also burned more than 2 billion US dollars in the first few years after its establishment. It was not until the year of listing in 2004 that it achieved its first annual profit.

Huaxin’s development path is worthy of our reference. It will definitely require a lot of sowing in the spring before harvest can be achieved in the autumn. "

Xia Jingxing waved his hand, "No need to explain too much, I have studied the development history of Huaxin and some of their layouts.

I didn’t realize how great Mr. Zhang was before. Only after I joined the semiconductor industry did I realize how great he is. "

These words were expressed by Xia Jingxing's heartfelt admiration, because Zhang Rujing personally did not have as strong financial strength as him. He relied on his own industry status to attract more than 2 billion U.S. dollars of international capital to Huaxin, and then made rapid progress all the way.

The 8-inch wafer fab in Modu was completed and put into operation in 13 months;

The following year, 2002, construction of a 12-inch wafer fab in Beijing began;

For the third year, it was selected as the World's Best Semiconductor Factory of the Year together with Intel;

In the fourth year, it went public and achieved profitability, and also became the third largest wafer foundry in the world;

Revenue exceeded US$1 billion in the fifth year...

You know, more than ten years later, Huaxin has only been ranked fifth in the global foundry market.

In other words, after more than ten years of development, it has gone backwards...

Before Gulf Power took action, Huaxin's development in the first five or six years was like cheating, a batch of violent developments.

Because they are indeed excellent, Xia Jingxing and Liang Mengsong are not embarrassed to admit that Fuxing Semiconductor is copying Huaxin's work.

Deng Yuanjun suddenly said: "I remember, didn't the Shanghai government promise us? When Fuxing Semiconductor's investment of US$1 billion is in place, the factory is built, the equipment is installed, and formal operations begin, it will give us a loan depending on the order situation. support."

Liang Mengsong nodded, "Yes, there was such a promise. If they can give us a loan of several hundred million US dollars, the financing can be less, just US$2 billion."

After the Beijing factory is put into operation, we will ask the Beijing government for a loan of hundreds of millions of dollars. "

Xia Jingxing thought. Liang Mengsong was good at leading a team in technical research and technical management, but his abilities in dealing with the government and financial management were a bit poor.

Later, we need to arrange for a CFO from mainland China who is familiar with the market to come over and help him share the work.

"If Fuxing Semiconductor carries out Series B financing, how will the valuation be calculated? It has not yet been officially operational, and the revenue is almost zero."

As Xia Jingxing spoke, he looked at the shareholders present.

"It's just a little more than the US$1 billion invested. It can't be much higher."

"I think it will work. Just give it a rough estimate. Don't delay development."

"Yes, Jing Xing, just make the decision directly."

…

The shareholders acted very Buddhist and did not seem to care about the valuation issue at all.

This is because everyone present holds shares and fund shares in Fuxing Semiconductor and Fuxing Industrial Industry Fund.

If Fuxing Industrial Fund invests in Fuxing Semiconductor, it will be equivalent to the left hand reversing the right hand, so no one cares about it.

After understanding this, Xia Jingxing stopped asking for everyone's opinions and said with finality: "Okay, just arrange an accounting firm to audit the company, and then the Fuxing Industrial Fund will directly inject capital into Fuxing Semiconductor and fully promote the Magic City Factory. Volume production and construction of a second fab.”