Chapter 501: Prepare for a rainy day, a new 30 billion project! It’s better to rely on yourself than on others!
"Mr. Chen, what do you think of the current development status of the domestic integrated circuit industry?"
In a small conference room, Dai Zhenyu looked at Chen Yansen with a smile and asked.
“There’s a lot of room for improvement.”
Chen Yansen said tactfully.
But I couldn't help but complain in my heart: If Tiangong Technology and HiSilicon had some fighting spirit, would they still need to go to TSMC?
Dai Zhenyu laughed heartily, pointed at Chen Yansen, and said, "That may sound harsh, but it's also true. From EDA software to packaging and testing processes, we don't have many core technologies to show for it.
Speaking of which, Tiangong Technology has set a good example!
By the way, I'm curious, how did you convince a foreign engineer like Mike Keller to work for Tiangong Technology?
"It mainly depends on personal charm, plus a tiny bit of insignificant options and cash incentives." Chen Yansen answered seriously.
Dai Zhenyu smiled and shook his head, thinking to himself: This kid's face is several centimeters thicker than the city wall of Chang'an.
He nudged Wang Guangtong beside him and jokingly said, "It seems that our young entrepreneurs in China are becoming more outstanding with each generation."
Wang Guangtong, a representative of the Chamber of Commerce who occasionally appeared on the 7 o'clock news, smiled faintly, looked at Chen Yansen, and asked, "Mr. Chen, are you planning to sell the Tiangong A100?"
"Huawei is waiting for the Kirin 910, while Meizu, OPPO, and Coolpad think it's too expensive. Only Meitu is interested."
Chen Yansen shrugged and told the truth.
Because the production volume could not be increased, it was impossible to form economies of scale. In addition, the 28-nanometer process was still an advanced technology in 2013, and the foundry costs remained high.
Although the Tiangong A100 has strong computing power, low energy consumption and good signal performance, it is more than 30% more expensive than the Snapdragon 800. Even Xiaomi, 360 and NetEase are unwilling to adopt it.
Unless Chen Yansen doesn't make any profit and only sells at cost price.
If Huaxin International is asked to do the foundry work, the comprehensive cost of a single chip may reach US$60.
The current price offered by Tiangong Technology is US$45 for bulk purchases of orders in the million-level range, and US$55 for small and medium-sized manufacturers, which is considered quite sincere.
But compared to the Snapdragon 800's price of US$35 to US$50, it's still a bit more expensive.
Of course, the more important issue is that the Yaocheng X2 has only been on the market for five days, and competitors are unsure about the actual performance of the Tiangong A100.
Given the purchasing cost of Tiangong A100, it is natural that it will be installed on the flagship model.
Who dares to joke about their own flagship phone?
Wang Guangtong and Dai Zhenyu exchanged a glance, then asked, "Mr. Chen, have you ever considered Huaxin International?"
"If Liu Xunfeng can keep the price of a single Tiangong A100 chip below US$35, I will certainly be willing to give the order to Huaxin International."
Chen Yansen said in a frank tone.
He paused and continued, "But the reality is, Huaxin International's 28nm process yield is just over 30%. Either I have to pay three times the price, or Liu Xunfeng has to make up the difference."
Wang Guangtong frowned slightly. From the perspective of the entire industrial chain, it would be the most correct choice for Tiangong Technology and HiSilicon to hand over the chips to Huaxin International, but who would make up for the losses?
"In fact, Mr. Chen, why not give Huaxin International a chance and help them improve their technology as soon as possible? Then both you and HiSilicon will benefit."
Dai Zhenyu persuaded patiently.
In order to completely dispel Chen Yansen's concerns, he even said bluntly: "The difference will be made up by the foundation and allocated to Huaxin's 500,000-unit order."
Chen Yansen was silent. He didn't expect that the superiors would be so bold.
Since Dai Zhenyu has found him, he will most likely find He Boting later.
A rough calculation shows that it will cost at least 400 to 500 million yuan. Is it worth it?
But then he thought again, Dai Zhenyu had no choice, and his superiors had no choice either.
The reason why the yield rate of Huaxin International's 28nm process is so low is first of all due to insufficient technical accumulation and lack of process experience.
Companies like Sanxing, TSMC, and MediaTek have all taken a gradual upgrade route in production technology, from 45nm to 32nm, and then to 28nm, taking solid steps one by one.
And what about Huaxin International?
Previously, the most mature process technologies were 40 nanometers and 65 nanometers. Now, we have suddenly entered the 28 nanometer field. The technological gap is large and the cost of trial and error is too high.
In addition, Huaxin International's 28nm process relies on Qualcomm's technology licensing, and its key technology patents are monopolized by TSMC, IBM, etc. Huaxin needs to use a roundabout design, which increases the complexity of the process.
Without taking a detour for two or three years, it will be difficult for Huaxin International to reduce costs and increase yield rate.
Therefore, even if a large fund came forward to subsidize the price difference, Chen Yansen did not want to give the order to Huaxin International.
Who can guarantee that the Tiangong A100 chip produced by Huaxin International will not have any problems?
Once a defect occurs, it will affect tens of thousands or even hundreds of thousands of Orange phone users.
Wouldn’t the reputation that the Yaocheng series had worked so hard to build be destroyed in an instant?
Thinking of this, Chen Yansen smiled and said to Dai Zhenyu and Wang Guangtong, "I believe that with the strength of Huaxin International, we will definitely be able to perfect the 28nm process in two to three years. In two to three years, the annual global shipment of Orange phones will most likely reach 200 to 300 million units.
Qualcomm and MediaTek will not sit idly by and watch Tiangong Technology compete with them for market share.
Therefore, I would rather rely on myself than others, and I would like to build three to five 28-nanometer production lines myself."
Dai Zhenyu was stunned when he heard this. From chip design to chip manufacturing, it seems that there is only a difference of two words, but the working mode, technical patents and production equipment required behind it are completely different.
"You want to get involved in the chip manufacturing field?" Wang Guangtong laughed dumbly, thinking it was outrageous.
"A year ago, when I founded Tiangong Technology, countless colleagues and subordinates advised me."
Chen Yansen leaned back and said lightly.
The CMOS structure, strained silicon, immersion lithography and double exposure technology involved in the manufacturing process may be difficult for others, but for him, they are not difficult technical obstacles to overcome.
With the strength of his mental power, he can only activate the [Planck Clock] talent for six seconds a day.
But these short six seconds were enough for him to complete six hours of overclocked thinking.
The smile on Wang Guangtong's face suddenly disappeared, and he understood the subtext of Chen Yansen's words.
Tiangong Technology also had no foundation, but it still became a first-tier chip design company.
"Mr. Chen, are you joking?" Dai Zhenyu asked seriously.
"The first phase of investment is 10 billion, and the second phase will add 20 billion. At least 30 billion will be invested in three years, specializing in high-end process technology. I don't believe we can't do it." Chen Yansen responded with a firm tone.
"Money alone can't solve the problem." Dai Zhenyu replied.
If it were that easy, banks would have built their own lithography machines long ago.
Chen Yansen resisted the urge to roll his eyes and muttered to himself: What do you care whether I can handle the 28nm process?
What I mean by saying this is that I want you to pay quickly!
Wang Guangtong understood and immediately promised: "The Integrated Circuit Industry Foundation can provide you with 30% of the funds."
"Can we replace it all with 01 special funds?"
Chen Yansen asked shamelessly.
01The three main characteristics of special funds are non-reimbursement, targeted nature and separate accounting.
To put it bluntly, it is a fiscal grant and there is no need to bear repayment obligations or transfer equity.
He doesn't want to suffer any loss at all.
However, it was precisely this confidence that made Wang Guangtong and Dai Zhenyu believe that he did have plans to enter the chip manufacturing industry.
“Equity investment is an important certificate for the foundation to use funds. If we allocate all the special funds to you, Chairman Wang and I will make a mistake.
If you are unwilling to accept the equity partnership model, the maximum funding you can receive is only 10%. The specific amount will depend on your actual investment in specific technology research and development, equipment upgrades, etc.
Dai Zhenyu thought for a moment and said.
Chen Yansen painted a rosy picture for him, and he also painted a rosy picture for Chen Yansen.
He and Wang Guangtong are both experienced old foxes who never release their eagles until they see the rabbit. They will definitely not easily give specific policies just because of Chen Yansen's words.
The big fund has state-owned capital background, and Chen Yansen is actually not opposed to it, but the equity ratio is worth discussing.
Just like Dongfang, Yanjing invested one and Luzhou invested another.
As a result, the chairman is almost the same as a professional manager, and his shareholding ratio is pitifully small.
Although Chen Yansen is not a person who likes to eat alone, he does not want to give up too much equity.
After all, the other party is state-owned, unlike foreign capital like DST which is easy to bully.
He makes too many small moves, which easily cause dissatisfaction among the upper echelons.
Therefore, this ratio must be agreed upon at the beginning.
Then, the three of them discussed issues such as the site selection of industrial land, the initial funds required for factory construction, equipment, research and development, and the first year's operating funds.
What surprised Chen Yansen was that he originally thought that Dai Zhenyu and Wang Guangtong only understood the operating rules of the Central Bureau and should not be familiar with some professional knowledge.
But Dai Zhenyu helped him calculate the approximate investment cost of each production line as soon as he opened his mouth.
There are 10 NXT 1950i lithography machines, each costing approximately US$60 million, with a total cost of US$600 million.
There are 50 etching machines, each costing approximately US$3 million, with a total cost of US$150 million.
50 thin film deposition equipment, each costing approximately US$2 million, with a total cost of US$100 million.
There are 30 pieces of testing and measuring equipment, each costing approximately US$4 million, with a total cost of US$120 million.
All core equipment was purchased first-hand, with a total cost of approximately US$1 billion.
If you replace it with second-hand equipment, the cost can be reduced by 50% to 60%.
"Don't worry about the equipment. If you dare to do it, we can help you connect and find the supply, but you have to figure out the technical solution yourself."
Dai Zhenyu reminded specifically.
Because how can they provide something that doesn’t exist?
A minimum of 1 billion in targeted free subsidies and 1 billion in equity investment, plus partial patent authorization from the China Science and Technology Association.
After pondering for a few seconds, Chen Yansen nodded heavily.
Of the initial 10 billion investment, he could only contribute 3 billion at most.
For the remaining 5 billion, you can negotiate with Luzhou, Shenzhen or Shanghai.
He will establish his company in the city of whoever dares to bet on him to win.
By the time the three of them finished their initial chat, more than an hour had passed.
Chen Yansen returned to the conference hall and chatted with the bosses of packaging and testing and equipment manufacturing companies.
Chen Yansen saw it and chuckled.
I wonder if He Boting will agree to give part of the Kirin 910 foundry orders to Huaxin International?
About twenty minutes later, He Boting returned. Frowning slightly, she approached Chen Yansen and asked quietly, "Mr. Chen, do you also agree to cooperate with Huaxin International as a foundry?"
"No." Chen Yansen replied truthfully.
"?" He Boting stood there in a daze, full of confusion.
How is this different from what she expected?
Chen Yansen didn't explain much. He left He Boting, who looked confused, and walked towards Wang Chaoxin who was standing beside him.
(End of this chapter)
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