My 1999

SMIC will serve as Motorola's strategic foundry partner, providing Motorola with comprehensive technical support from MOS17 to other chip factories.

In addition, the two parties also cooperated in the field of patents and advanced CMOS process technology licensing.

Motorola acquired 11.4% of SMIC's shares.

Subsequently, SMIC invested US$710 million in expanding production and building a production line that meets 0.13 microns.

After the expansion, the Tianjin plant became the largest plant under SMIC.

The monthly output of wafers is 180,000 pieces, almost twice that of the Magic City plant and three times that of the Beijing plant.

In October 2005, SMIC Shanghai 12-inch (FAB8) started construction.

The planned monthly production capacity is 35,000 wafers.

The technical standards are the same as those of the Beijing plant, all 0.18um~55nm.

SMIC, with a monthly production capacity of 375,000 8-inch and above pieces, is second only to TSMC and UMC, becoming the world's third largest chip foundry.

As for TSMC's rival Samsung, it just started chip foundry last year, and its current production capacity is not even one-fifth of SMIC's, let alone catching up with TSMC.

However, with the Hynix data given by Xu Liang, SMIC is one step faster than in history in advanced process, and has now broken through the 65nm process.

It is only slightly later than TSMC.

However, the overall environment is not good now, SMIC is heavily in debt, and has no ability to build new factories and pursue stronger process.

In the field of high-capital, high-tech and fiercely competitive chip foundry.

One step behind may be decades behind.

If it were not for the change in the overall environment of China, it would be difficult for SMIC to catch up.

After reading the information several times, Xu Liang also had a clear idea of ​​SMIC's next development.

——

A black Mercedes-Benz S drove out of SMIC's headquarters in Shanghai, went up Longdong Avenue, drove into the inner ring elevated road, and entered Zhongshan South Road after getting off the Nanpu Bridge.

Soon it arrived at the famous Bund.

"Mr. Zhang, we're here."

The secretary's words made Zhang Rujing, who was lost in thought, react.

The trace of worry between his eyebrows and the slightly haggard look indicated that he had not been doing well recently.

Through the car window, I saw the vermilion building with a three-section classical structure on the main facade getting closer and closer, and the figure of the young man I had met once appeared in my mind.

In 2004, although the other party was already the richest man in China, Hanhua and Hongmeng were famous.

But it was far from being as famous as it is now, and even Soros was trampled under his feet.

Hanhua, Hongmeng, Taihua, Master Kong, Harvest, Facebook, Vidiwang, Hynix, Unocal, one by one, shining names in various industries, constituted the increasingly huge Xu's business empire.

In comparison, although SMIC has also developed to a certain extent in the past three years, it is far from being comparable to the other party.

It's too far behind.

The car stopped steadily.

Zhang Rujing, who got out of the car, subconsciously glanced at the door lintel.

The two characters of "Hongyan" written in iron and silver hooks reveal a sense of sharpness and vigor.

"Mr. Zhang?"

Zhang Rujing smiled after coming back to his senses.

"I heard that the two characters of "Hongyan" were written by Xu Liang."

"People say so outside, and Xu's companies generally use the seal with the corporate logo of oracle bone script." The secretary said.

Zhang Rujing nodded slightly and walked forward.

Pushing the door in, there was a screen wall two meters high and about three meters wide.

In the middle of the screen wall was a vermilion seal the size of a washbasin, and in the middle of the seal were two oracle bone scripts that were simple, complex, and beautiful.

This is the well-known logo of Hongyan Fund.

Under the logo was written in both Chinese and English.

Hongyan Fund.

"Mr. Zhang, welcome to Hongyan Fund."

Looking at Li Jinling, who was walking over in a lavender women's business suit with her hair tied up high.

"Are you the Secretary Li who contacted me before?"

"Yes."

"Hello, hello."

After a simple handshake.

"Please follow me, Mr. Xu is waiting for you in the office."

"Thank you."

Take him to the reception room on the third floor.

Push the door in.

"Mr. Xu, Mr. Zhang is here."

Xu Liang, who had been waiting here for a long time, greeted him with a smile.

"Mr. Zhang, welcome, welcome." After shaking the other's right hand, "We haven't seen each other for more than two years since we last met in 2004."

"After two years, Mr. Xu has become the world's top financier, comparable to Buffett and Bogle; Hanhua has grown into a respected global financial giant.

In contrast, SMIC has been going downhill in the past two years."

"Haha, the company's performance is affected by the external environment and the IT cycle, and it is normal to have ups and downs. Mr. Zhang doesn't need to worry too much.

Please sit down."

"Thank you."

The two sat down, and the secretary served tea.

"Mr. Zhang, when I transferred Hynix's 90nm and 65nm IC technologies to you, I agreed to repay the first convertible bond within two years.

But now you don't seem to have that intention?"

Zhang Rujing sighed inwardly.

Spending $1.3 billion to acquire Hynix's technology patents has consolidated SMIC's patent pool and allowed them to perfect the 65nm advanced process two years ahead of schedule, catching up with TSMC.

But man proposes, God disposes.

Just when he was full of confidence and ready to compete with TSMC, the other party not only gave him a blow, but also the chip demand became weak from the hot before 2004.

SMIC, which was under-operated and could not make money, naturally had no way to repay its debts.

Although the first debt was only 200 million US dollars.

But after paying compensation to TSMC, SMIC really had no money in its account.

"Mr. Xu, SMIC's situation is not very good recently, so please give us some more time. When SMIC makes money, we will repay it immediately."

Xu Liang put down the teacup in his hand.

"Mr. Zhang, with your experience in the chip foundry industry, when will the market recover?"

"This..."

He hesitated for a moment.

As a veteran in the industry, he certainly knows the industry cycle, but it is not easy to say now.

"According to our investigation, it takes three to five years for the chip industry to get out of the cycle each time.

This wrinkle started in late 2004, and there is still no improvement.

Based on past experience, it may take until 2008 or even 2009 to get out of the trough.

This also means that SMIC will continue to default on its debts."

Zhang Rujing opened his mouth, but could not say anything to refute.

This is indeed the case.

"Mr. Xu, I'm sorry."

Xu Liang waved his hand.

"The business world is like a battlefield. No one knows what will happen next. Mr. Zhang does not need to apologize."

After a pause, Xu Liang changed the subject.

"However, I have a plan to solve the dilemma of Mr. Zhang and SMIC."

"Mr. Xu, please speak?"

"It's very simple. Hanhua will convert all of its $1.3 billion convertible bonds into SMIC shares."

Xu Liang's ulterior motives were exposed.

Zhang Rujing was stunned. Obviously, he did not expect Xu Liang's idea to be this?

"Mr. Zhang, the chip foundry industry is a capital-intensive, technology-intensive, and extremely competitive industry. It can be predicted that as the chip process continues to shrink, the investment scale of chip foundries will become larger and larger.

The investment in the 65-nanometer process is almost double that of the 90-nanometer process.

The investment in 45-nanometer is double that of 65-nanometer.

And the R\u0026D investment in the new generation of technology will also be higher and higher.

All of these require a lot of money to support.

What Hanhua lacks the least is money."

Looking at Xu Liang's firm words, Zhang Rujing's expression gradually calmed down.

After a moment of silence.

"Mr. Xu is so optimistic about SMIC?"

"I am more optimistic about SMIC led by Mr. Zhang." Xu Liang smiled and continued, "After so many years of doing business, I deeply understand a truth that a successful company must have an excellent manager.

For SMIC, Mr. Zhang is the most suitable helmsman.

This is an important reason why I am optimistic about SMIC."

With Xu Liang's current identity and status, he can get such praise from him.

Zhang Rujing was also very happy.

But besides being happy, he also felt a little complicated.

Now, with many unfavorable news, SMIC's market value has fallen to about 1 billion US dollars.

Once Hanhua chooses to convert debt into equity.

It will instantly obtain absolute control of SMIC.

The man in front of him will no longer be an investor, but the real boss of SMIC.

And it seems difficult for him to stop him from entering SMIC.

After all, SMIC can't pay back the huge debt of 1.3 billion US dollars.

With SMIC's current situation, no one in the capital market will be interested, let alone raising new debt to repay old debt.

Even so, he still doesn't intend to give up his hard work easily.

"If Mr. Xu takes over SMIC, how will he develop it?"

"Two main things.

First, spend money.

Second, lawsuit.

This year, Hanhua plans to invest $2.5 billion to expand the production capacity of SMIC's Magic City Plant 4, which is 12 inches, 65 nanometers, and 35,000 wafers per month to 100,000 wafers.

Next year, it will invest $7 billion to build two 12-inch, 65 nanometers foundries in Yangcheng and Yidu, each with a monthly production capacity of 100,000 wafers."

Zhang Rujing's face was full of shock.

He thought that Xu Liang would spend money to expand production after acquiring SMIC.

But he didn't expect it to be so much.

US$9.5 billion, a monthly production capacity of 265,000 wafers, if converted to 8 inches, is a monthly production capacity of 47.17 wafers, which is more than double the current monthly production capacity of 449,100 8-inch wafers of SMIC.

Once it goes into production, SMIC will instantly surpass UMC and become the world's second largest foundry after TSMC.

However, as a man who has seen a lot of ups and downs, Zhang Rujing quickly calmed down.

"Mr. Xu, the current global chip demand is 9.6 million 8-inch wafers per month, of which the IDM model accounts for 67%, and the remaining 33% is pure foundry capacity.

And TSMC accounts for half of the more than 3 million 8-inch wafer capacity.

Although I really hope to see SMIC surpass TSMC and become the world's number one chip giant, I have to remind you with regret.

After the three chip factories are put into production, we may suffer huge losses."

Xu Liang smiled.

"Loss?

Of course it is a loss, and I want it to be a loss.

We lose, and other institutions also lose.

Let's see who has the most capital and who can laugh last."