What Si Mingyu showed to a few people was the chip production plan of Guoxing Group Co., Ltd.
Yes, not R&D, but production.
Since it was foreseen that chips would become strategic materials in the information age, many domestic companies have devoted themselves to research and development, including Tsinghua Unigroup, SMIC, Changjiang Electronics Technology, HiSilicon, etc., and they have all achieved great results in different fields.
This is because chip is just a general term, and the types are roughly divided into:
Computing chips, such as CPUs, are used for computing and analysis.
Memory chips, such as DRAM, are mainly used for data storage.
Perception chips, such as MEMS, microphones, cameras, etc., are mainly used to perceive the external world.
Communication chips, such as Bluetooth, WiFi, network interface, drive control, etc., are used for data transmission and mechanical control.
Energy chips, power chips, etc., used for energy supply.
For each type of chip, there is at least one company in the country, and sometimes several companies are conducting research, development, and production, and Guoxing Group is naturally involved in it.
In 2001, the Chinese Academy of Sciences established the Loongson research group, and the Guoxin research group, part of the Guoxing Group, was also established that same year. Currently, multiple Loongson models are used in various industries, and Guoxin has entered production.
The reason why it lagged behind for such a long time is that Guoxin has opened up all production channels including design software, building instruction set system, chip design, manufacturing equipment, wafer production, packaging and testing.
Simply put, we control the entire industrial chain, from digging out ore from the ground to producing finished chips.
Control doesn't mean doing everything in-house. Guoxing Group doesn't have the technology or the resources to do so. Instead, if a Chinese company can handle a certain process, then incorporate it into the production process. If no one else can, then Guoxing Group will conduct its own research and development, aiming for nationwide production.
Of course, it is impossible for Guoxing Group to develop a small number of cutting-edge and necessary equipment such as photolithography machines in a short period of time. There is no other way, and it can only use imported equipment.
The good news is that the wafer companies under Guoxing Group can already mass-produce five-nanometer wafers, which means they can manufacture five-nanometer chips.
Some companies are ready-made, some product groups can produce them themselves, and some technologies are mastered by the group itself, but integrating them together requires additional investment.
The government will not invest this money because the products of chip companies including Longxin have solved the problem of whether they have or not. The government is not particularly anxious about having usable domestic chips.
Si Mingyu could have borrowed money from the bank, but he didn't want to. He had to pay back the money, plus interest. His primary goal in approaching these people was to get them to invest in establishing a new company with Guoxing Group to start chip production.
Some people may have doubts. It is true that loans have interest, but shareholders also have to share the profits.
Yes, but don't forget that Lei Jun has already announced that he will start making cars. If he does, then there will be a lot of chips needed to produce cars. It is normal to give priority to products of chip companies in which his company has a stake if the performance is the same, right?
Even if the car manufacturing is not successful, many of Xiaomi's electronic products, especially mobile phones, require high-end chips.
Let's look at Pony Ma, Mr. Chen, and Zhang Yiming. Although these three are in the Internet industry, they all have their own data centers. It costs a lot of money every year just to update the processing chips used in the servers. Si Mingyu also wants to make money from this.
Furthermore, while transferring shares does mean giving up some profits, what is gained in return is risk sharing, connections, and other resources. It's no exaggeration to say that Penguin, CoinStation, ZiFu, and Jinsan, plus Si Mingyu's own advertising and media company, can account for half of the private media landscape, right?
Si Mingyu was weak in media publicity, which was why he initially sought to acquire the media company under the Xu Group. Hong Kong's Hongming Industrial, while holding shares in several newspapers, only had some influence in Hong Kong and Macau. Guoxing Group was even more low-key, not involved in the media industry at all.
Of course, it doesn’t matter if those present are not interested in Si Mingyu’s proposal. They can just do it themselves. If the products produced are of good quality and low price, they will definitely buy them.
"How much does it cost?" Lei Jun asked the key question, which was not written in the information.
"One hundred billion is enough to start the project, but if you want efficiency, you need one hundred and fifty billion."
Chip manufacturing has never been cheap, as TSMC's market capitalization of over NT$3 trillion makes sense. The newly established company is merely a chip production, packaging, and testing company, performing only the final step, which can be simply understood as assembling various "components" into a single chip.
Because Guoxing Group has solved all the "accessories" problems, only this last step is left.
"How many shares are you going to give us?" asked Mr. Chen.
"At most 40 percent." Si Mingyu replied.
The others expressed their understanding. After all, Guoxing Group had been working hard for nearly twenty years, so there was no way they would give up control. However, this proportion of shares fully demonstrated Si Mingyu's sincerity and his genuine desire to cooperate with them.
"This is really putting us in a difficult position." Lei Jun said with a wry smile after reading the information.
"Indeed." Mr. Chen also agreed.
"We are both listed companies. The funds required for investment and shareholding will definitely not be small, and we need the approval of the board of directors. Can this matter be disclosed to them?" asked Xiao Ma Ge.
"It's really troublesome." Si Mingyu was used to having the final say and forgot that other people were not like that.
Even though Pony Ma, as the founder, holds unrivaled prestige within Penguin, shouldn't he at least explain such a massive investment to the board? He also has to consider the opinions of other shareholders; it can't be forced.
Everyone else has almost the same problem, except Zhang Yiming.
"I have no problem with the cooperative investment. The specific amount of investment depends on Brother Xiao Ma and the others."
What Zhang Yiming meant by this was that he had to wait for others to express their opinions on whether to participate in the cooperation, and then everyone could discuss the proportion of their respective investments.
As long as the data in the materials is accurate, the 5-nanometer chips they produce will have no trouble selling at the same performance and price. Don't forget what they do; when it comes to advertising, none of you here are afraid of anyone.
To take a step back, if the performance is the same but the price is higher, people will still buy it. Many related units and equipment need to use domestic chips. Even if we only do this, the annual profit is guaranteed.
The domestic chip market is too big a cake, even if the manufacturers mentioned earlier divide it together, they still cannot eat it up.
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