Chapter 523 Having Your Own OEM Factory: Hong Kong Is Not Suitable for Building Factories

It wasn't until Alexei was put on the plane that Professor Bubnov finally began to realize, belatedly, the excitement and confusion he was experiencing began.

Isn't that a bit too hasty?

It seems that Miss Wang didn't even say a few words to Alexei before sending him directly to the final interview.

But Mr. Wang was still trying to intimidate him. He smiled broadly at Professor Bubnov and said, "I don't believe you, but don't I believe your judgment, Professor? You said it's a pity, so it must be a beautiful gem being buried in dust, a pearl being cast in darkness. Great geniuses should not be buried."

This made Professor Bubnov feel guilty, fearing that Alexei had wasted seven years of his life.

So all he could do was awkwardly emphasize: "Alexei is an academician, the smartest and most capable academician."

Wang Xiao raised his eyebrows in surprise and said instinctively, "An academician!"

If there had been an academician in her university major before she transmigrated, the entire major would have been invincible.

The value of academicians in the Soviet Union was even higher.

Professor Bubnov nodded vigorously: "Yes, he is the most intelligent academician."

Good heavens, if the Soviet Union still existed, those people, those who are now running him around like madmen, wouldn't even be able to get an appointment to meet with Alexei and talk to him.

Unfortunately, the Soviet Union no longer exists.

Since 1991, three-quarters of the physicists and more than half of the mathematicians in this country have left their homeland for overseas. In Russia alone, half of the top 100 scientists have chosen to emigrate.

Things become more valuable away from home, but people become less valuable away from home.

When you're on someone else's turf, you're at their beck and call, so how can you act all high and mighty?

However, Professor Bubnov's sadness lasted only two seconds before he could no longer feel it.

His emotions had turned to shock, because Boss Wang blurted out, "Then, Professor, could you please introduce us to more Alexei?"

She didn't give Professor Bubnov time to react, nor did she give him a chance to object. Instead, she passionately and eloquently declared: "I've heard that when God created man, it took many years and a great distance to create a genius. They are God's mercy towards mankind. God created them so that His people would have the opportunity to live better lives."

"If these geniuses fail to shine in the most appropriate positions and benefit the people, then humanity has failed God, and God will be angry."

"That's why we feel so heartbroken and regretful when we see geniuses not where they belong."

“Professor, we should not disappoint God’s expectations. We must let geniuses return to where they belong.”

Old Zhou was completely stunned by the boss's impassioned speech.

No, although he doesn't understand Christianity, he still seriously doubts whether God really allocated geniuses proportionally when creating humans. Is there any basis for this? Does the Bible say so?

Boss Wang speaks without hesitation, without the slightest bit of guilt.

She noticed that Professor Bubnov didn't seem to object, though it was also possible that she had spoken too arrogantly and he hadn't had time to react.

But it doesn't matter!

For Boss Wang, not having a firm objection meant he agreed.

She continued, “Their current platform has been around for years, and it wasn’t built for them, nor will it change for them.”

That's the subtlety of being a researcher.

For example, those who do theoretical work, like mathematics, can create miracles even if they only have a pen and a piece of paper and are working in a restaurant washing dishes and serving food.

Take, for example, theoretical physicists like the renowned Chen-Ning Yang. During his doctoral studies, due to his poor hands-on skills, he was always present wherever there was an explosion, blowing up the lab countless times. He eventually switched from experimental physics to theoretical physics, no longer clashing with the lab, yet this didn't stop Professor Yang from becoming a great physicist.

But those scientists who need not only laboratories but also practical feedback cannot rely solely on their intellect for research. They must have support.

The Western scientific research system has been established for so many years, so how could it possibly be overturned and rebuilt for a foreigner?

So stop fighting and come over here, come into my bowl.

We still have a large blank space, like a blank sheet of paper. You can draw your blueprint however you want, and we will fully support you.

Wang Xiao further emphasized the value of the subject: "The world should not have only one kind of scenery, nor should there be only one path to truth. Newton could discover calculus through physical intuition, and Leibniz could independently create calculus by focusing on mathematical forms. No one can say that only their research methods are correct, while ours are wrong. Our persistence is equally meaningful, extraordinary, and brilliant."

Professor Bubnov fell silent.

He knew that Miss Wang, who was standing in front of him, had come to them because of their interest in semiconductors.

The Soviet Union's semiconductor development path has long been considered a reflection of the Soviet Union's overall technological collapse.

As for why the Soviet Union collapsed, there has always been a view that the Soviet Union took the wrong path and should not have done reverse engineering.

Because once you embark on the path of reverse engineering, it means you're always chasing after something.

The Soviet Union's semiconductor industry started with reverse engineering, and from then on, it completely lost its vitality for independent innovation and the right to set standards.

The entire industrial system has been built to replicate a specific product, rather than to create the next generation of products.

Miss Wang is tempting him, tempting him to continue down this path.

The Soviet Union lacked a related industrial system and consumer market for the semiconductor industry, which China was slowly building, while China's large population base naturally provided it with the necessary resources.

Professor Bubnov took a deep breath and nodded: "Alright!"

He lamented the unfulfilled potential of his former genius, and he couldn't bear the misunderstandings from the outside world—look, when the Soviet Union was around, they touted their scientists as unparalleled. But when it came time to put them to the test, they immediately showed their incompetence. They simply couldn't manage, they didn't even have the ability to lead a team.

But the truth is not like that; every flower has its own soil to bloom in.

It's just not suitable.

It's time to return to the right place.

Professor Bubnov had no idea that his nod would be like a butterfly flapping its wings, turning into a giant fan that sent Dr. Lin Benjian and Dr. Zhang Rujing, who were in Shanghai, into a complete ruckus.

They had just finished interviewing plasma physicist Alexei Zarokov and then offered him the position of head of the EUV light source division, granting him absolute power to build his own laboratory, assemble a team, and decide on the technical roadmap—Good heavens! It wasn't that they were being too lenient; the guy was truly a genius.

After exchanging a few words with the other party, both Dr. Lin and Dr. Zhang felt a sense of honor.

It was definitely worth working for Boss Wang. If it weren't for this job, they probably wouldn't have had the chance to meet such a top talent.

In the scientific community, no rational person could underestimate Soviet technology.

Before the two could even process the aftermath of that incident, just three days later, Boss Wang shipped over a precision metrology expert who was in charge of improving the algorithm for a certain measurement device at Novartis in Israel.

He was very satisfied with his job. Over the past few years, he had done very well at Nova and received several raises.

But he recently had a fight with his boss about the next generation of products. He expressed his opinion, but everyone acted as if they hadn't heard him.

He argued with his boss, who politely saw him out of the office.

He turned his head again and looked at his colleagues coming and going, and suddenly felt like an outsider.

That immense loneliness and sense of rejection gripped his heart, making it hard for him to breathe.

The cold metal door of the laboratory seemed to be silently reminding him: you are just an outsider.

The pent-up energy that Vasily had been holding in since leaving Russia dissipated instantly.

He couldn't stay any longer, so he had to leave immediately and call his boss to ask for leave.

On the phone, the boss's voice was still as polite as ever.

They were so polite that Vasily felt dispensable.

He suspected that if he resigned immediately, his boss would politely say "OK" and then secretly rejoice: "You finally took the initiative to speak up."

Vasily, on vacation, had nowhere to go. He was even afraid to go out for fear of running into people he knew. He didn't know how to deal with people's questions, even if they didn't say them aloud, but only showed a hint on their faces.

Professor Bubnov's phone call saved him; he finally had a legitimate reason to leave the city of Rehovot where he lived.

He was going to China to visit his friends.

This was another capable and talented individual; Nova must be regretting losing him.

Dr. Lin Benjian took the lead and was given the position of director of the metrology and testing laboratory to develop core metrology equipment such as the phase-shifting point diffraction interferometer.

When he called his boss to tell him, Wang Xiao was still very curious: "What's this for?"

Then she heard a polite explanation: "Without measuring equipment, we don't even know how inaccurate the EUV mirrors we make are."

Wang Xiao quickly laughed it off and hung up the phone. She knew she shouldn't have said anything, as she had just exposed her ignorance again.

However, Mr. Wang's frustration always passed like a gust of wind.

She immediately packed her bags happily again and went straight to the airport.

What are you doing? Going to Belarus.

The Soviet Union has more than just Russia as a family; after Belarus, she's going to Ukraine.

She has a long list, and she has to make a trip to each one.

What? Starting from scratch is very difficult?

No, no, no, she found it very interesting, like the joy of a squirrel storing food for winter.

Squirrel King, or rather, Boss Wang, was busy from the beginning of November to mid-December, and just as the New Year was about to begin, he suddenly received a call from Dr. Zhang Rujing.

When his assistant came over to tell him, Mr. Wang was a little flustered and hesitated to answer the phone.

After all, which boss doesn't know how much work they've assigned to their subordinates?

Bullshit! She knows perfectly well.

However, the nature of capitalists dictates that as long as they haven't exploited people to the point of baldness, they can continue to exploit them.

Now that she's being taken advantage of, it seems like she's about to protest, so of course she's feeling guilty.

So when Mr. Wang answered the phone, he was extremely polite, showering Zhang Bo with compliments and repeatedly emphasizing how indispensable Zhang Bo was to Wuzhou Semiconductor, serving as a guiding light and a benchmark.

Zhang Rujing was both amused and exasperated by what he heard, and directly exposed her little scheme: "Boss Wang, I will continue to work overtime. No matter how many people come, we will make sure they are all served."

Oh my, look, it's settled now! What a harmonious atmosphere!

Ms. Wang said she would send them gifts from Belgium because she was about to go to IMEC to visit the engineers from Wuzhou who were working and studying there.

Dr. Zhang quickly stopped him, saying, "Don't rush this. If you can spare the time, could you come back for a visit? There's something I need your opinion on."

Wang Xiao glanced at the calendar, and after thinking about Dr. Zhang's tone, she immediately felt overjoyed.

Hehehe, isn't it time? TSMC is going to acquire World Semiconductor, right?

So she blurted out, "What is it? Is it about TSMC acquiring Worldwide?"

Zhang Rujing was completely stunned, unable to hide his surprise: "How did you know?"

TSMC only recently came into contact with Worldwide Semiconductor, and all the news circulating now is that Hualian Electronics is going to acquire Worldwide Semiconductor.

In fact, World Wide Semiconductor Corporation (WDS) did have a very smooth negotiation with Hualian Semiconductor Corporation (HWSC), while TSMC suddenly appeared out of nowhere.

Wang Xiao chuckled, his tone enigmatic: "I heard it from a friend. Besides, it's perfectly normal for TSMC to want to acquire World Semiconductor. If they let Hualian acquire it, how can it remain the top company?"

She was in an extremely good mood.

She doesn't own any shares in World University, so whether or not World University will be acquired is none of her business.

But if Dr. Zhang specifically brought this up with her, does it mean that Dr. Zhang has made up his mind to leave the World University and is going to come to Wuzhou University wholeheartedly?

Boss Wang was on high alert, waiting for the other party to reveal even the slightest hint, and she immediately chimed in.

To her surprise, Dr. Zhang on the other end of the phone sighed, "But TSMC has no plans to build a factory in Hong Kong."

Although it was Hualian Electronics that first contacted World Semiconductor, TSMC offered too much, asking for US$5 billion.

This figure is 8.5 times that of when Zhang Rujun took over the National Taiwan University in 1997.

Even though the Nasdaq index is still soaring and stock prices are rising all the way, an 8.5-fold return is still outstanding.

Who could resist such a temptation?

The major shareholders of World University couldn't refuse, the engineers couldn't refuse, and Zhang Rujing couldn't refuse either.

As a former subordinate of Morris Chang, he has always respected and admired Mr. Chang, and greatly appreciated his spirit of constantly pursuing progress in technology.

TSMC is currently the leading foundry in Taiwan. After World Semiconductor Corporation merged into TSMC, there is no need for the pain of changing careers. Colleagues who are willing to stay in Taiwan to continue their careers can also earn good salaries and have good career prospects.

Why did Zhang Rujing refuse? From a business perspective, he couldn't find a reason to refuse.

The only problem is the factory in Hong Kong. Chairman Zhang stated bluntly that the entire acquisition excludes the eight-inch chip factory under construction.

The reason given is that Hong Kong is simply not suitable for building chip factories.

Hong Kong is densely populated and has scarce land resources, making it extremely costly to set up factories.

The most critical issue is that chip manufacturers are major consumers of water and electricity. Hong Kong relies on external energy sources and has extremely limited water resources, posing a very high potential risk to a stable supply.

How can a chip factory be built without fresh water?

Upon hearing this, Wang Xiao couldn't help but complain: "Without fresh water, you can't irrigate the golf course. Don't Hong Kong's rich play golf often?"

Ha! There's fresh water when you play golf, but not when you make chips?

Zhang Rujing sighed on the phone: "We considered Hong Kong before to facilitate bypassing the US sanctions on equipment imports. But for TSMC, this problem simply doesn't exist if we build more factories directly in Taiwan."

From a business perspective, it's perfectly normal for TSMC to abandon its factory in Hong Kong.

Every company has its own considerations.

Wang Xiao started grinding his teeth: "What do you mean? You don't want our factory anymore?"

She absolutely had to have this factory.

She had previously wanted to adopt an IDM (Integrated Device Manufacturer) model, covering the entire industry chain from chip design and manufacturing to packaging and testing, with her own chip factory and complete production facilities.

This facilitates in-depth collaborative design and process.

So, whether or not there is a factory in Hong Kong is not that important.

But things are different now; she's changed her mind.

IBM's proactive offer to transfer its copper interconnect technology to TSMC made her suddenly realize the benefits of contract manufacturing.

That means foundries can focus their energy on improving processes and innovating in engineering, efficiency, and focus.

When resources are limited, conflicts and compromises may arise within an IDM regarding design and manufacturing roadmaps.

Most importantly, the OEM manufacturing is open, with clients from all over the world, and the requirements for each order are different.

This means that foundries can access a vast array of diverse chip designs in a short period of time.

Each design brings new challenges and problems, forcing the contract manufacturer's engineers to solve them.

Only when clients demand a wide variety of colors, like white and black, can a powerful service provider be forged.

The experience gained from different fields and with different needs allows contract manufacturers to accumulate rich experience and forge their ability to solve problems quickly.

These are things that no IDM can do.

Ms. Wang has already focused all her interest on pursuing advancements in semiconductor technology, so how could she possibly give up the foundry business?

Dr. Zhang Rujing is an industry insider; he is much more rational than the hot-blooded Boss Wang.

Once the contract manufacturers are established, they must consider production costs and production stability; otherwise, they will never be able to secure orders.

If a factory has no orders, then there is only one word waiting for it—death.

Mr. Wang started pacing around on the spot, holding the phone, his tone hardening: "So what do you mean? Our factory has been under construction for over half a year!"

Yes, yes, yes, it doesn't matter whether World Wide Fund Management or TSMC withdraws now.

Because the land was provided by Wuzhou, the initial construction costs were also mainly borne by Wuzhou.

According to the contract they signed, World Expo mainly focuses on the later stages, such as equipment import, factory commissioning, and organizing subsequent production.

It's not time for them to exert their full strength yet.

It could certainly retreat easily.

Wang Xiao took a deep breath: "Zhang Bo, neither World Wide Fund Management nor TSMC has acted ethically in this matter; they have already breached their contracts."

Zhang Rujing smiled wryly: "The current proposal is that both Worldwide and TSMC completely relinquish their shares in the Hong Kong factory, and the factory will belong entirely to Wuzhou. They will not interfere in the future."

Although doing so was indeed a breach of contract, the Hong Kong factory did not come away empty-handed.

Because Tang Yicheng obtained the right to use 5 acres of land for free from the Hong Kong government through his contract with Shida.

Given the high prices of industrial land in Hong Kong, this is no small sum of money.

Wang Xiao was so angry he laughed: "Now that chip factories are almost impossible to build, who knows when the Hong Kong government will take back those five acres of land?"

She took a deep breath and made up her mind. "Zhang Bo, come work for me. You'll be in charge of the chip factory in Hong Kong, and you'll be in charge of everything. We're not playing with them anymore."

Zhang Rujing sighed: "Actually, upon closer reflection, Hong Kong's limitations in semiconductor manufacturing are indeed quite significant."

Semiconductor manufacturing requires the support of a complete upstream and downstream industrial chain, including raw material, chemical, equipment suppliers and packaging and testing services.

Hong Kong doesn't have that; it lacks a semiconductor industry ecosystem.

Although the Pearl River Delta region, which is close to it, has a developed electronics industry, it mainly focuses on assembly and design and lacks the supporting system required for chip manufacturing.

Therefore, when Morris Chang bluntly stated that World Trade Center's decision to build a factory in Hong Kong was a foolish move, Richard Chang was speechless.

Putting aside all political factors, Hong Kong is indeed not a good choice for building a chip factory.

The Hong Kong government's Cyberport project is more likely to focus on software, the internet, digital services, and regional headquarters.

Chip factories, which require heavy capital and long-term investment, are not well-suited to this environment.

Dr. Zhang tried to persuade Mr. Wang: "Regarding the restrictions on imported equipment that we were worried about before, after thinking about it, the situation is different now. We can import from Europe."

The international situation changed dramatically in 1999. The Kosovo crisis remained unresolved for a long time, forcing the newly formed European Union to unite and adopt a tougher stance in its foreign policy.

Simply put, European countries have become more autonomous, and so have their businesses.

Wang Xiao agreed with this view.

Russia's assertive stance on the Kosovo issue, coupled with the United States' evasiveness, has created a strong sense of insecurity that may lead Europe to look eastward.

Because they need to find a new partner that is large enough to provide strategic depth, both economically and politically, to balance the pressure from Russia and the unreliability of the United States. Globally, only Asia, or more specifically East Asia, currently possesses this size as a partner.

When Europe chooses to shift its supply chains and export markets eastward as a strategic hedge, its willingness to export semiconductor equipment will rise sharply.

From this perspective, at the end of 1999, the Hong Kong chip factory, which was still under construction, did not have an absolute necessity to be completed.

But it can't be given up so easily.

Wang Xiao's voice was sinister: "So, you're saying we wasted so much money and time in Hong Kong? Zhang Bo, you know better than anyone how difficult it is to manufacture chips!"

Dr. Zhang was thoroughly humiliated, yet he had no way to refute her.

Because in this matter, Shida was indeed acting unfairly.

He quickly tried to salvage the situation: "Mr. Wang, the factory wasn't built for nothing; it can still be fully utilized. Hong Kong is a free port; it has its unique characteristics, and we must make use of those characteristics."

Seeing that Mr. Wang had stopped getting angry, he quickly opened his notebook and began to read out the plan point by point: "First, we can make it a buffer zone. Although the international situation has eased, many pieces of equipment are still subject to export restrictions. Once these pieces of equipment are restricted, we can ship them to Hong Kong first."

“We can also take advantage of Hong Kong’s free legal environment to conduct preliminary integration testing of imported subsystems and our self-developed core modules here. Whether it’s lenses or workbenches, we can test them here. In this way, we keep the most sensitive technical aspects within the territory and make full use of international resources.”

But Mr. Wang still didn't respond, which made Dr. Zhang feel increasingly guilty, feeling that he really had let him down.

So Dr. Zhang gritted his teeth and unleashed his final trump card: "Aren't you currently recruiting Soviet scientists? Hong Kong's visa process is convenient, and the living conditions are better than on the mainland. They'll have fewer concerns working in Hong Kong. We can turn this place into a laboratory to conduct small-scale and pilot-scale tests, creating our own IMEC. It will be much more effective than doing it in Shanghai."

Isn't that impressive enough?

But Mr. Wang just wouldn't say a word.

The silence was like a mountain, weighing heavily on Dr. Zhang's mind.

As the general manager of World University, he had to consider the overall interests of the company.

Selling Worldwide to TSMC is indeed the most suitable option for Worldwide.

Therefore, he did not want the acquisition to fall through.

But if she can't satisfy Mr. Wang, given his personality, she really will take it to court.

Therefore, Dr. Zhang had to rack his brains: "We can also set up a customized small-batch high-end service center for the global market. There are many chip design startups in Europe and the United States now, but their orders are too small to get the capacity support of large foundries. Our Hong Kong factory can provide these companies with small-batch, multi-variety, high-profit tape-out services."

"We differentiate ourselves from competitors and attract small customers that are overlooked by large companies."

Whether it was the proposal that truly moved Mr. Wang, or Mr. Wang's respect for the elderly and his reluctance to listen to him talk until his throat was dry, Mr. Wang finally spoke up: "You are responsible for the factory in Hong Kong, and TSMC must cooperate. If they can't, I will still take legal action."

Dr. Zhang could only nod and agree with a wry smile.

But Mr. Wang wasn't finished: "My contract manufacturing plant still needs to continue operating. As for where to build it specifically? That's another matter. But you still have to take responsibility; you have to come and be the general manager. You're working with TSMC, and you've let me down!"

What could Dr. Zhang say? He could only nod in agreement.

Because of this matter, Shi Da is in the wrong, and he is also in the wrong.

Then Mr. Wang made his third request: "This time, the factory has to be a 12-inch plant, not an 8-inch one. I want to outdo TSMC. Hey, Zhang Bo, did you hear that?"

Hey! The connection is still down.

Even if the connection is cut off, she's determined to build a 12-inch chip factory.

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Sorry I'm late. I had a headache and wasn't feeling well last night, so I dragged myself out of bed this morning to write this. [crying emoji]