The Millennium Semiconductor Survival Guide.

Chapter 349 The Last Hope
"I am very happy to be able to acquire ASPLA this time. New Core Technology has always been committed to developing the chip manufacturing industry. This successful acquisition of ASPLA will help New Core Technology further improve its chip industry territory."

When Zhou Xin went to Neon in 2007, Neon was obviously unwilling to sell ASPLA because the scope of the financial crisis at that time was still limited to the real estate and financial fields, and the impact had not yet been fully fermented.

Neon still wants to struggle to see if it is possible to bring ASPLA back to life.

The results were cruel. In 2007, the total revenue of chips dropped by 6.2%. This was based on the sales of more than 3 million units of Mphone5000. The total revenue dropped by 6.2%. It can be seen that the chip industry is in a cold winter. How harsh.

Because Mphone3 uses the most advanced chip manufacturing process and has the highest cost, it occupies a large market share of overall chip revenue.

After the data came out in 2007, coupled with the further deterioration of the financial crisis, NEC even planned to completely withdraw from the chip manufacturing industry. This led the Neon Ministry of Economy, Trade and Industry to give up its fantasy and stated that it could sell ASPLA.

ASPLA was eventually sold to New Core Technology for 200 billion yen, or approximately US$2 million.

Xinxin Technology's acquisition of ASPLA has been approved by regulatory agencies in both Neon and China. Hu Zhengming's visit to Neon to sign the contract with NEC President Toshio Nakajima this time is nothing more than a formality.

Due to the sluggish economy, Neon's exports to Amerikan and Europa have both declined significantly, with Americen down by 19% and Europa down by 17.2%.

Neon's exports are not only declining to developed regions, but also to Asia. This is the first time that Neon's exports to Asia have decreased in more than six years.

Neon urgently hopes that Xinxin will cooperate with Neon to put on a show. They need such a show to attract foreign investment in Neon.

Xinxin Technology also wants to acquire more companies with technological content from Neon, so it doesn't mind cooperating with them.

ASPLA’s financial subsidies from the Ministry of Industry and Economy alone are more than 200 billion yen, not to mention two 90nm wafer fabs. With the accumulated technology and engineers, New Core Technology has made a lot of money.

So much so that Neon Media felt like they were mourning after the regulatory approval of this acquisition:

"A landmark event in which Huaguo Semiconductor completed its substantial colonization of Neon"

"The stupid officials of the Ministry of Industry and Economy sold the last hope of neon semiconductor manufacturing to China"

"Neon once again chose the wrong path in a key technology field"

Eh, why say it again?

Neon has no choice, because they want to save Elpida. The financial crisis has hit the DRAM market hard. Coupled with Samsung's expansion of production and price reduction, Elpida is already teetering on the edge of life and death.

Compared with ASPLA, which has no advantages in the field of logic chip manufacturing, Elpida is more important to Neon Semiconductor.

Next year, in order to save Elpida, the Ministry of Economy, Trade and Industry will introduce an amendment to the Industrial Revitalization Act, authorizing the Neon government to provide assistance to private companies that possess internationally leading technologies but face operating difficulties.The first beneficiary of this amendment was Elpida, which received 300 billion yen from the Neon government.

ASPLA was his biological son, and Elpida is his current biological son. Neon knew it couldn't be saved, so it was better to sell ASPLA to Xinxin.

After selling to Xinxin, at least the jobs and tax revenue will remain in Neon, so there won’t be nothing.It is impossible for Xinxin to pack up and move the wafer factory.

At the signing site of the cooperation agreement, reporters from the Asahi Shimbun, Sankei Shimbun, Neon Economic News, NHK and other print media and TV stations had a lot of questions to ask Hu Zhengming.

Xinxin Technology, led by Hu Zhengming, continued to develop strongly during the financial crisis and expanded production aggressively, putting tremendous pressure on competitors.

With the technological advantages of Xinxin's lithography machines and China's capital advantages, in the field of chip manufacturing, Xinxin's annual output value is twice that of TSMC. Samsung can barely compete with Xinxin with its memory chips.

The success of Xinxin has interested Neon, whose semiconductor manufacturing industry has collapsed. Neon is full of discussions about Xinxin from academia to industry.

There have been voices in the Neon industry that believe that Sony, as a giant in the field of Neon consumer electronics, should invest more in the chip manufacturing field.

Through the success of the Xinxin IDM model, Neon believes that the separation of chip design and chip manufacturing is only a model of industry development. The success of this model does not mean that the IDM model is not feasible.

(IDM model refers to the integration of chip design and manufacturing)

"Mr. Hu, the neon economy has resumed growth since 2002, mainly driven by exports. In the past, exports contributed more than [-]% to Japan's economic growth.

However, as the international financial crisis intensified, the economies of Neon's main trading partners Amerikan and Europa were hit hard.

These two places have reduced their imports of neon cars, televisions and mechanical products, causing the Japanese economy, which is highly dependent on exports, to stagnate.The weakening of external demand has reduced the profits of Japanese companies, caused many small businesses to go bankrupt, and caused workers' wages to fall and the unemployment rate to rise.

Does New Core Technology’s acquisition of ASPLA mean that New Core Technology is optimistic about the technological strength of Neon Enterprises and that Neon’s economy will improve in the future? "

Hu Zhengming knew that he was here to perform, but that didn’t mean he could just talk nonsense:
"I work in the semiconductor industry and don't know much about the economy, and I don't know much about Neon's economic situation. But I have worked with many Neon engineers, including Xinxin Technology, and there are many engineers and R&D personnel from Neon.

The professional attitude and professionalism of Neon people left a deep impression on me. Neon's manufacturing and service industries are very developed. I believe that Neon can get out of the financial crisis as soon as possible. "

This is a standard diplomatic answer, saying everything and saying nothing at the same time. Anyway, I won’t answer your question directly. You can interpret it however you want.

"Mr. Hu, after Xinxin Technology acquired ASPLA, are you ready to list ASPLA on the Neon Securities Market?"

After NewPay went public last year, it bucked the trend and soared. Its market value has surpassed Microsoft, becoming the largest technology stock.

Catching up with NewPay's listing, Big A's Newman concept stocks have also followed suit. However, the biggest rise in Big A is not the Xinxin lithography machine, because the market value of the Xinxin lithography machine is too high and it is too difficult to speculate. big.

Among small-cap stocks, the most ferocious is a company called Zhonghuan Co., Ltd. This company was listed in April last year. It was formerly the Jinmen Third Semiconductor Component Factory. After entering the supplier system of Xinxin, its performance improved by leaps and bounds.

Last year, the company achieved total operating income of 6.9 million yuan, a year-on-year increase of 23%; net profit was 1 million yuan, a year-on-year increase of 38%, breaking through the [-] million yuan mark for the first time. This achievement is very impressive in the current environment.With performance and concepts, Zhonghuan shares are about to be sold to the sky.

“The first thing Xinxin should do after acquiring ASPLA is to get ASPLA back on track.

ASPLA has many valuable technologies that can help us further optimize the manufacturing process of new cores at 90nm and 130nm, and can help us further improve the yield rate.I don't care much about capital operations, because even during the financial crisis, Xinxin Technology still has very stable cash flow, especially our chip manufacturing sector. "

Hu Zhengming's subtext is that Xinxin is not short of money and does not need to go to the capital market for financing.

Mphone3 sold 5000 million in half a year, creating the largest revenue for smartphones, and 5000 million is still limited by production capacity.

It is precisely with the massive shipment of Mphone3 that Xinxin Technology surpassed TSMC in chip manufacturing revenue by so much.

Advanced processes will always be the most profitable areas in the chip industry. If you eat up this area, the profits of other companies will be seriously affected.

If the general environment is good and the cake is divided enough, everyone will live well. For example, the memory chip market in the 80s is growing rapidly every year. It is more than enough for manufacturers such as Toshiba, Fujitsu, NEC, and Hitachi to eat this piece of cake together.

When the Nasdaq bubble burst and Samsung, Hynix and Micron emerged, no neon manufacturer could survive.

Now for TSMC, life or death is out of the question. Their deep ties with Intel and the large amount of Americen capital behind them can at least ensure that they survive.

Originally, TSMC embraced Intel and Apple one after another, which allowed them to gradually move towards the throne of chip foundry.

Now Intel's market share is partly eaten up by Xinxin Technology, and high-end smartphones will not be allocated to TSMC at all.

Adding to the background of global chip production cuts this year, TSMC has announced plans to lay off as many as 2008 people since entering 2000.

The layoff plan is a proactive behavior. It can reduce the burden on the company and reduce the loss of cash flow. It is a cost-saving behavior.

But it will also cause turmoil within the company. At first, Xinxin had to pay double or even triple the salary to recruit people from TSMC, and later it was 1.5 times.

After Xinxin's lithography machine achieved a breakthrough and Xinxin took the lead in the manufacturing process, it would only cost 1.2 times the annual salary to poach people from TSMC.

After TSMC laid off employees, a large number of TSMC engineers began to express their desire to join Xinxin even without a salary increase.

Spring River Plumbing Duck Prophet, as industry insiders, we know very well that Matrix’s position in the smartphone field is too strong, resulting in TSMC having almost no possibility of defeating the more advanced IDM model of Xinxin Technology.

We talk about more advanced IDM because the actual controllers are Zhou Xin's Xinxin and Matrix. They not only take charge of chip design and chip manufacturing, but also cover consumer electronics integration and sales.

This is more difficult, and once successful, the corporate moat is also the most difficult to break.

The recent development of Xinxin Technology has been so smooth that Hu Zhengming never dreamed that Xinxin Technology could develop to where it is today in just ten years.

Back at the press conference, most of the people present were reporters covering economic news. Everyone knew that Hu Zhengming was perfunctory, and felt a little disappointed after hearing his answer.

Because since the outbreak of Amerikan's subprime mortgage crisis last summer, the neon financial market, like the major financial markets in Europe and the United States, has experienced continued turmoil.

This year alone, the Nikkei 225 stock average price index in the Tokyo stock market has fallen by about 44% from the beginning of this year, and its decline is no different from that of the Big A.

Nasdaq has NewPay listed on the market to boost the stock market, and the Tokyo stock market also needs Newman concept stocks. This is what the reporters here think.

"Mr. Hu, what kind of efforts do you think Neon needs to make if it wants to compete with China, Korea and Wanwan in the semiconductor field again?"

Hu Zhengming said something else first: "Mr. Okada, let me correct you first. Wanwan is just a region. Please don't put it alongside China and Korea."

The reporters from the Chinese government here began to applaud after hearing this. Everyone was not so happy when they heard the Neon reporter complaining about Neon Semiconductor's hope of being acquired by China.

"Also, I can answer your question. The semiconductor industry has been dominated by Neon, Europe and Amerikan since very early on. However, after entering the 21st century, the structure of the semiconductor industry has changed, and Neon's presence in the semiconductor field has continued to weaken. .

I think there are many reasons, the most important of which is Amerikan's trade supervision, which makes Neon face a big disadvantage in semiconductor exports. This disadvantage is particularly obvious when competing with Korean companies.

The cost of Goryeo itself is lower than that of Neon, coupled with Amerikan's trade supervision.

Because Xinxin Technology owns Xiaomi Electronics, Xiaomi discovered during supplier management that for the same chip, Koryo’s price is 70% lower than that of Neon. Can Neon’s quality be 70% better than Koryo’s?
I'm afraid not.

This makes Neon Enterprises uncompetitive on the export side. I think Neon needs to re-sign a trade agreement with Amerikan. "

Amerikan's trade regulations are almost fatal, allowing Samsung and Hynix to gradually encroach on Neon Semiconductor's traditional areas of advantage.

“The second is that the international trend is to separate chip manufacturing and chip design, and Neon is relatively weak in the field of chip manufacturing.

In the Wanwan area, UMC is engaged in chip design and TSMC is engaged in chip manufacturing. The Hsinchu Science and Technology Park is also very close to Shenhai. If we just talk about airplanes, it only takes two hours.

There is a very close connection between chip manufacturing in the Wanwan region and China.Amerikan and Korea are both self-contained systems, and Silicon Valley itself has chip manufacturing companies and chip design companies.

The cooperation between Neon and Huaguo in the semiconductor field is very shallow. They cooperate almost from the perspective of upstream raw material and equipment suppliers. Neon would rather look to Silicon Valley for chip design than cooperate with Huaguo’s chip manufacturing companies. This results in higher costs.

Of course, according to some information I know, because everyone has had no money in the past two years, the number of chip manufacturing companies that Neon came to Zhangjiang to discuss cooperation has gradually increased.

Finally, Neon's digital industry is lagging behind, which is also a fatal factor. In the era of smartphones, I don't seem to hear much from Neon Enterprises. "

Hu Zhengming said it very frankly, and they are all real problems of Neon Semiconductor.

A thought flashed through the minds of the reporters here. As expected, the president of Xinxin Group has summed up the current situation of Neon Semiconductor so well.

As for Hu Zhengming, I am planning to purchase goods from Neon. Can I not investigate you clearly?
ASPLA can sell your last hope in neon chip manufacturing, and I think you can sell the others too.

(End of this chapter)