My Age of Investment

"Oh, by the way, during this period of time, I have entrusted several alumni of Tsinghua University to thoroughly understand the current situation of the domestic semiconductor industry chain."

Deng Feng looked serious, and shook his head while talking, "After reading it, it is shocking. To sum up, there are roughly the following problems: lack of talents, failure to retain talents, stigmatization of the industry, and suppression of international manufacturers... "

Deng Feng reported the findings to Xia Jingxing one by one, and the latter listened quietly, without showing any sign of shrinking or worry.

Seeing Xia Jingxing's calm and composed face, Deng Feng nodded secretly, which showed that the little brother in front of him didn't make chips on a whim, but was fully mentally prepared for hard work.

After listening to Deng Feng's statement, Xia Jingxing was asked to sum it up with one word "money".

There is a lack of talent, right? I went to the United States, Japan, and Wanwan to poach people with high salaries;

I can't keep talents, right? I raise my salary, give me a house and a car, my children go to school, and my spouse's job, all arrangements are made;

The stigmatization of the industry also stems from the cheating behavior of Hanxin and Ark. After the incident was revealed, the official face was very dull.

If you do it yourself, you will refuse to apply for any official subsidies, because taking these things means assuming a responsibility, and the higher-ups might rush to get results every three days.

The Hanxin incident fully exposed the eagerness of some people for quick success and instant benefit, and they all wanted to share the credit, including the academic, political and business circles.

As for the suppression of major international manufacturers, it is a little more difficult.

"Didn't you lose money? TSMC still refuses to let SMIC go?" Xia Jingxing asked.

Speaking of this incident, Deng Feng felt angry. Although it had nothing to do with him, after knowing the inside story, as an investor in the chip industry, he also felt very aggrieved.

In 2003, SMIC was preparing to go public and collected evidence on the sidelines. TSMC, which had been dormant for several years, suddenly launched an attack and sued SMIC for intellectual property infringement.

The location of the prosecution is also very particular, and it was chosen in California, USA.

Demanding compensation of 1 billion U.S. dollars, while SMIC's revenue in 2003 was only 360 million U.S. dollars, which basically means fighting to the death.

The lawsuit dragged on until 2005, and SMIC was exhausted and chose to settle with TSMC, admitting in disguise the "improper use of TSMC's trade secrets" and paying $175 million in compensation.

In the "Reconciliation Agreement", TSMC's legal team showed its prowess and set up a "third-party escrow account". SMIC must deposit all technologies in this account for TSMC's "free inspection", which fundamentally limits China's Core International's development.

This is not over. This year, on the eve of SMIC's preparation for financing, TSMC made another move, accusing SMIC of using TSMC technology for its latest 0.13-micron process, which violated the "Settlement Agreement."

In this regard, SMIC reacted strongly, resolutely denied its infringement, and prepared a large amount of evidence to prove its innocence.

Since TSMC still initiated a lawsuit in California, Zhang Rujing chose to countersued TSMC in the Beijing Higher Court.

This arrangement is very clever and beyond TSMC's expectations.

Since the mainland's trial time is earlier than that of the California court, if TSMC chooses to actively respond to the lawsuit,

Then it is necessary to expose the evidence in its possession, which gives SMIC time to respond and refute the evidence in the California court.

SMIC's lawyers are full of confidence in this, and believe that in the "home game", although they may not win, at least they can get some space and time to maneuver.

But the final result of the previous life was that the Beijing Higher Court rejected all SMIC's claims, and the lawsuit did not enter the trial stage at all.

SMIC eventually lost the lawsuit, and on the basis of 175 million US dollars, it will pay another 200 million US dollars, plus 10% of the shares.

Afterwards, Wanwan media proudly said: "We have now controlled half of the chip industry in mainland China!"

The specific reasons are very complicated. It is said that there is a shadow of a certain kneeling office, and there are still illusions about the peaceful reunion.

After experiencing this incident, Zhang Rujing sadly left SMIC. The severely injured SMIC also lost the ability to invest and expand. While licking its wounds, internal fighting broke out. It took nearly ten years before it embarked on the right development again. road, but at that time, TSMC had already surpassed the dust.

At this moment, the lawsuit has not yet settled, but Deng Feng is not optimistic about the future development of SMIC.

He said: "In August 2000, SMIC officially laid the first pile in Zhangjiang, Pudong, and only one year and one month later, in September 2001, it began to put into trial production.

By 2003, SMIC had rushed to the position of the fourth largest foundry in the world, and the speed of its rise was staggering.

Over the years, Wanwan has been very unfriendly to us, and its technological restrictions on the mainland have become more and more crazy. High-tech companies on the island are strictly prohibited from entering the mainland, and the "national treasure" integrated circuit industry is even more strictly blocked.

Zhang Rujing, who has a Wanwan household registration, was fined 155,000 US dollars as a warning and asked to withdraw his capital within 6 months.

And Zhang Rujing did not show any weakness, and directly announced that he would give up his Wanwan household registration and break away from Wanwan.

TSMC's suppression of SMIC is not a coincidence, nor is it purely commercial competition. "

Speaking of this, Deng Feng glanced at Xia Jingxing, "Do you understand what I mean?"

Xia Jingxing nodded. This kind of technology that is stuck in the neck is naturally strictly guarded against, and the Americans hold a large number of shares in TSMC.

Deng Feng murmured: "Of the 300 engineers Zhang Rujing brought to Shanghai, more than 100 of them were originally employees of TSMC.

This kind of thorn in the flesh is a thorn in the flesh, and TSMC will pull it out no matter what.

If the chip manufacturing chain is lost, no matter how good the chip design and packaging are, it will be equal to zero, because you are missing a link! "

Xia Jingxing was silent, Deng Feng poked at the place where he was worried.

HiSilicon has actually gone a long way in the field of chip design, but the Americans have ordered that TSMC not be allowed to accept orders. SMIC’s technology is not as good, and many production equipment and patents involve the United States. Once the order is received, it is likely to be banned together. sanctions.

If you really want to get rid of the situation of being stuck, you have to do it all. The whole semiconductor industry chain goes hand in hand. The reason is the same as the barrel theory, and there should be no shortcomings.

It sounds simple, but it's actually quite difficult.

But there is no way to do this. If we want to develop, we are doomed to engage in scientific and technological confrontation with the United States. Appeasement and evasion are useless, and the sooner we do it, the better.

From 2008 to 2017, HiSilicon invested a total of 160 billion in ten years, accounting for 40% of Huawei's total R\u0026D expenditure in the past ten years.

Mobile phones equipped with chips designed by HiSilicon have been sprayed as "hand warmers" and "tractors" by people, and then to the famous Kirin series. There was a bloody path.

In fact, the reason is very simple. If you do it, you may not have it, but if you don’t do it, you will definitely not!

Conscientious companies have been lingering on this idea, but Huawei has made chips, operating systems, and 5G. After all, it is a company that bears everything.

"Jing Xing Jing Xing..."

Xia Jingxing was lost in thought for a while, and Deng Feng patted him to wake him up from his contemplation.

"Ah, I'm listening, you mean we get involved in chip manufacturing?"

Deng Feng nodded, "Yes, I know this decision is not easy to make, but didn't you say it? In the chip industry chain, the hardest and most tiring work, we do it ourselves, and the other relatively easy and simple ones are based on investment. host.

Considering the increasingly expensive cost of production line production, as well as the materials and equipment required for chip manufacturing, chip manufacturing is considered the most difficult industrial link, and the gap with international leaders is also the most difficult to catch up. "

Semiconductor companies can be divided into three types of models according to their business. One is the IDM model, that is, the upstream design of chips, midstream manufacturing, and downstream packaging and testing are all completed by themselves. Representative companies include Intel, Texas Instruments, Samsung, etc.;

The other is the asset-light fabless model, that is, only chips are designed, and the manufacturing is handed over to the fab. Representative companies include Qualcomm, Broadcom, Huawei HiSilicon, MediaTek, etc.;

Another category is foundry, which does not design an asset-heavy model that is only foundry. Representative companies include TSMC, UMC, SMIC, GlobalFoundries, etc.

If one were to ask which type Xia Jingxing wanted to be, it would definitely be the first type.

But considering the actual situation, Xia Jingxing felt that it would be better to start from the foundry, and at the same time, he could form business synergy with the chip design company he invested in, and gradually develop into a first-class company.

Deng Feng continued: "You have home appliances, mobile phones, and cars on the application side. These industries can provide orders for chip design companies that invest in, and the design companies deliver the orders to chip foundries. A rudimentary industrial chain is Got through.

At the same time, the application side can also test, debug, cultivate, and improve the level of the entire chip industry chain through a large number of sold products. "

"Okay, I see, I agree in principle, but talents..."

Deng Feng said with a smile: "Go to SMIC to dig. If they are severely injured by TSMC this time, the heavy responsibility of revitalizing the nation's technology industry will fall to you Fuxing Industrial Group."

Xia Jingxing smiled. His revival is a real revival of national science and technology, which has a different meaning from that of "Fudan Star".

Since he dared to take such a big name and was lucky, he should take on more important responsibilities.

"Okay, isn't it a foundry, do it!"

Xia Jingxing slammed his fist on the coffee table fiercely, appearing full of courage.

Deng Feng smiled. Seeing that Xia Jingxing, as the most powerful rich man in the mainland, was guided on the right path, he, the guide, felt extremely gratified.

If he has the strength, he also wants to participate in this kind of big project that changes the course of history as the main force.

Then Deng Feng thought of the funding issue. From its establishment to its official production and then to its listing, SMIC raised a total of more than 3 billion US dollars.

Considering that it was a technology bubble at that time and the industry was in a low period, the current input cost will be much higher than the investment amount of SMIC at that time.

Xia Jingxing mentioned to him last time that he would set up a fund worth 10 billion U.S. dollars and a fund worth 100 billion yuan.

Thinking of this, Deng Feng couldn't help asking: "When will the two industrial funds be in place?"

Xia Jingxing also has some headaches. It is now the end of 2006, and if he persists for another year, he will be able to reap a fortune in the capital market. But the reality tells him that the chip cannot be delayed for a moment, and the sooner it is done, the better.

But you can't have your cake and eat it too, so you can only temporarily postpone the plan to build a factory.

"I have a large investment in the United States, and it will take a year to realize the profit. I can't support the factory construction plan for the time being."

Xia Jingxing was very frank, because he could feel that Deng Feng was very enthusiastic about the chip business, and he didn't want to dampen the enthusiasm of the other party.

"Oh, a year later!"

Then Deng Feng shook his head, "It doesn't matter, I have been waiting for decades, so it doesn't matter if I wait another year.

Projects 531, 908, and 909 have been in progress for twenty years without any major achievements.

Let me tell you, chips have to be produced by private enterprises. This is an industry that pays attention to long-term investment, has huge risks, and is not easy to achieve results, but it is easy to poke trouble. "

Xia Jingxing understood Deng Feng's hint.

Summarize the core-making history from 1978 to 2000: In the early days, there was no unified planning, and production lines that were eliminated from abroad were flocked to be imported. However, driven by Moore's Law, these devices turned into scrap iron at an extraordinary speed.

In the later period, the state took the initiative to organize three major battles, repeated defeats and repeated battles, and finally passed the "909 Project" to leave a barely qualified magic capital Huahong for the mainland.

In all fairness, the gap between China and overseas levels at this stage has not narrowed significantly.

In fact, when the chief designer invited 30 representatives of the scientific and technological circles to hold a symposium in the Great Hall of the People in 1977, Wang Shouwu, the soul of China's semiconductor academic circles, said:

"There are more than 600 semiconductor production factories in the country, and the total integrated circuits produced in a year are only equal to one-tenth of the monthly output of a large factory in Japan."

In one sentence, the previous achievements and family background of China's semiconductor industry can be changed.

In the final analysis, the family background is too weak, and it is considered courageous to have struggled, but the conscience department has never struggled, and it has never even had the courage to try.

It is hard for young people today to imagine the despair that Chinese people felt in the 1980s and 1990s when they faced the terrifying gap with developed countries.

Therefore, there were a lot of public knowledge in that era.

"Wang Shouwu was cleaning toilets in that era, doing self-criticism and self-criticism every day, while a large number of Silicon Valley companies such as Fairchild, Intel, and AMD were aggressively enclosing land and building patent barriers..."

Xia Jingxing smiled and did not speak, just quietly listening to Deng Feng's whining.

However, Deng Feng is not bad, not as radical as many of his peers, and even chose to sell a listed company in Silicon Valley and return to China to invest.

Because Deng Feng has been in contact with the upper circles in the United States and knows how xenophobic there is, no matter how poor the motherland is, it is still the motherland.

"I don't mean anything else. I just state the facts and the reasons why we are behind. Now we are repaying the debts. To make up for these debts, even if the Chinese work hard, it will take decades to make it up? I don't know if there is any. No chance to see it."

Xia Jingxing said with a smile: "Don't be so negative, at most ten years, what you will see is a different world."

"hope……"

Deng Feng glanced at Xia Jingxing, "Hey, you're young, it's a good thing to think positively, after all, the important task of rejuvenating the nation will still fall on the shoulders of your generation."

Xia Jingxing felt that he was suddenly put on a big hat, but he didn't reject it.

Each generation has its mission. By 2020, he will only be in his thirties, and he can still fight for decades.

"Oh, the person who introduced Li Guangnan to meet you is a friend of mine named Liu Qiang, who is also the former CTO of Ark.

Although Fang Zhou went to engage in real estate, he still did not abandon his ideals. He founded a company called Ingenic, which is still developing CPUs in the field of domestic education electronics and e-books. Backgammon and Haojixing are their customers.

Although the product is relatively low-end, it is still a spark. Can you invest in it? "

Xia Jingxing nodded, "Vote, just for this kind of tenacity, I have to support it.

Don't worry, the foundry will not be able to do it for a while, but our investment in the industrial chain will never stop.

Go get in touch, and companies that are willing to commit to independent innovation will all be included in the investment candidate list.

After further screening and due diligence, we will invest in them. "

"That's fine, let's do it, I'll go pimp you, a rich man."

Deng Feng got up with a smile, and left with a lot of gains.

Although nothing particularly substantive was discussed today, the semiconductor development framework that they intend to jointly invest in has been finalized.

This is a long-term project that can only be built brick by brick.

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