Rebirth 99 to become a car giant.

Chapter 469: Big acquisition, Nanshan Semiconductor begins to show its fangs

Zhang Fugui and Lin Ling stayed overseas for almost a year and finally made arrangements for Nanshan investment.

Investments in the financial market are also smoothly dispersed into various accounts.

The next step is how to spend the money.

Previously, part of the amount had been spent on the recruitment of Nanshan Semiconductor personnel and the purchase of some factories and equipment.

But compared to the overall profit, it still pales into insignificance.

However, they have indeed always carried out the tasks ordered by Cao Yang.

Nanshan Semiconductor has also arranged a special team to follow up.

Cao Yang also listened to their reports many times.

This time, it was finally time for an important development.

"Mr. Cao, Renesas Electronics is willing to sell its wafer fab and packaging and testing plant in Kofu to us this time. The price has almost been negotiated."

"Although the technology of this kind of wafer factory is not advanced, there is even a gap of two generations compared with the latest wafer factories put into production by Intel, TSMC and others."

"But as a wafer supply for automotive-grade chips, it is completely sufficient."

"And the price is relatively suitable. It only costs [-] million US dollars to acquire all the equipment and personnel of this fab and packaging and testing plant, and you can even obtain a free license to use Renesas' related technologies."

"If there are no surprises, a formal acquisition agreement can be signed next week."

When Zhang Fugui said this, Zhang Jing kept nodding beside him.

Obviously, Zhang Jing also approved of this acquisition plan.

For Nanshan Semiconductor, which started almost from scratch, it is in great need of a mature wafer factory and packaging and testing factory to enhance the company's strength.

Otherwise, if we just simply design the chip, there will still be a long way to go with Cao Yang's plan.

"Didn't the previous investigation say that Elpida's situation in Japan is more severe than that of Renesas? The other party has already fallen into a state of loss and may go bankrupt at any time?"

Although Cao Yang knew that the company team had been discussing the purchase of wafer fabs and packaging and testing plants with many semiconductor companies such as Elpida, Renesas, ON Semiconductor, and Freescale.

But he has always been the most confident in acquiring the Elpida factory.

Because Elpida will go bankrupt in the future, and he has an impression of this.

On the contrary, semiconductor companies such as Renesas Electronics and ON Semiconductor will be very prosperous in future generations.

It stands to reason that we can get through this difficulty smoothly.

Now Zhang Fugui said that they had negotiated the acquisition with Renesas Electronics, but there was no movement from Elpida.

"Elpida's situation is indeed quite severe, but their team is also quite stubborn. They feel they can still persevere and are unwilling to sell the factory easily."

"Speaking of which, Elpida and Renesas Electronics are brothers."

"Both companies were born out of three companies, namely Hitachi, NEC and Mitsubishi Electric."

"In the 90s, these three companies were among the top ten semiconductor companies in the world."

"However, when the United States suppressed Japan's semiconductor industry, these companies were severely damaged."

“As a product of the Japanese semiconductor industry’s cold winter, Elpida inherited the DRAM business of NEC, Hitachi and Mitsubishi Electric, while Renesas inherited other semiconductor businesses of NEC, Hitachi and Mitsubishi Electric, including automotive and consumer electronics solutions, mobile phones and PC peripherals.”

"It can be said that although they are new, these two companies have inherited the core assets, talents and equipment of the three giants of Japan's semiconductor industry, accounting for almost half of the Japan's semiconductor industry."

“Elpida and Renesas not only come from the same background, but they are both now in business difficulties.”

"This time the financial crisis hit the global semiconductor industry hard, DRAM prices plummeted, and Elpida fell into a huge loss."

"Similarly, Renesas's situation is not much better, and it will definitely suffer losses this year."

"However, they have different responses to the same situation."

"It is rumored that Renesas Electronics is preparing to shut down two high-cost wafer fabs. Now we are willing to purchase the wafer fabs. Although they have some concerns, their attitude is considered positive."

"But the situation in Elpida is different. They are unwilling to close the factory or sell the factory, thinking that they can survive it."

After Zhang Fugui explained this, Cao Yang probably understood.

This is a bit like Ford Motor and General Motors. Both companies have faced development difficulties in recent years and have fallen into a state of loss.

But Ford relies on the "sell, sell, sell" policy to continuously inject blood for itself and reduce losses at the same time.

General Motors, on the other hand, was reluctant to sell its assets easily and wanted everything. In the end, it had no choice but to go bankrupt and reorganize.

Later, Elpida fell into bankruptcy, and Renesas Electronics was reborn and became a pivotal presence in the global automotive semiconductor field. This is also a very important reason.

"As Japan's main automotive chip manufacturer, Renesas Electronics will sell its wafer factory to us. Can Toyota and Honda Motor agree?"

Cao Yang asked a more critical question.

In his impression, Renesas Electronics is the territory of Toyota Motor.

"Renesas has a rich product line, covering many fields such as MCUs, LCD panel driver ICs, PCs and home multimedia SoCs."

"In addition to Japan's automobile industry being its main customer, other manufacturers such as home appliances are also customers of Renesas."

"It can be said that the diversification of Renesas' products gives it a stronger ability to resist risks and is less disrupted."

"So even if customers such as Toyota Motor have concerns, Renesas Electronics' willingness to sell its wafer fab and packaging and testing plant is relatively strong."

"The most critical thing is that the wafer factories and packaging and testing plants they sell are not the most technologically advanced factories. They do not pose a great threat to Toyota and Honda."

Zhang Jing added some explanation on the side.

This also allowed Cao Yang to better understand the reason why Renesas Electronics would sell a wafer fab and packaging and testing plant to Nanshan Semiconductor.

On the one hand, people are not afraid that if you master this technology, it will pose a threat to them. On the other hand, the timing is too good now.

The impact of the financial crisis is so great, and the semiconductor industry is so sluggish.

If you put it in more than ten years, even if the price has doubled, others will not sell the factory to you.

In other words, they would rather close the factory than sell it to you.

"Since Renesas Electronics has chosen to follow the path of Ford Motor and slim down, in addition to fabs, I think they will also consider giving up some chip technologies."

"For example, in businesses with relatively low profit margins such as LCD panel driver ICs, the threshold is not that high."

"With this fab acquisition, we can further communicate with them and see if we can directly package these businesses and sell them to us."

When Cao Yang said this, Zhang Jing's eyes immediately lit up.

He had previously felt that it would be difficult to acquire a large semiconductor company as a whole, but it was possible to acquire part of its business.

Cao Yang's current proposal is completely consistent with his original idea.

And judging from the actions of Renesas Electronics, it is likely that consensus will be reached in this direction.

"Mr. Cao, after signing the acquisition agreement next week, I will personally communicate with the president of Renesas Electronics to see if I can persuade him to sell this business."

Nanshan Group has too many businesses, and Cao Yang is now considering slowly delegating power to the heads of various business departments below.

For example, when Nanshan Semiconductor acquired Renesas Electronics' wafer fab and packaging and testing plant this time, he planned to let Zhang Jing and Zhang Fugui take the lead, and he was not directly responsible for the related business.

Nor do we intend to seize traffic in front of the media.

At his position, he no longer needs this traffic.

"Don't give up on Elpida, their memory technology is still very advanced."

"Whether it's in cars or mobile phones, the demand for memory will still be very strong in the future."

"Especially with the arrival of the smartphone era in the future, the importance of memory will be higher than now, and the market will be larger."

"Elpida is not aware of this yet, or others are aware of this and want to hold on."

"But they lose so much money every year, and they don't have the support of companies in the Japanese automotive industry and home appliance industry like Renesas Electronics, so life is destined to become increasingly difficult."

"If they don't want to go bankrupt, then selling part of their factories and technology is inevitable."

Cao Yang gave his judgment very definitely.

He did not dare to have the idea of ​​acquiring Elpida as a whole.

Even if Elpida goes bankrupt, America and Japan will not let Nanshan Semiconductor acquire Elpida.

But some technologies and factories are not so sensitive.

With this report from Zhang Fugui and Zhang Jing, Cao Yang officially agreed to Nanshan Semiconductor's acquisition of Renesas Electronics' wafer fab and packaging and testing plant.

The two parties held a special signing ceremony in Jiafu, Japan.

Although Chinese media were not invited to participate in this event, after the signing, relevant news was quickly released on the official Weibo accounts of Autohome and Nanshan Semiconductor.

In an instant, Nanshan Semiconductor became famous in China.

"Nanshan Semiconductor acquires Japanese wafer fab!"

"After a few months, Nanshan Group once again spent US$1 million to launch an international acquisition!"

"Nanshan Semiconductor is going to buck the trend and develop!"

"Shocked! The Japanese chip giant sold its factory to Nanshan Semiconductor!"

……

All kinds of popular content quickly flooded the Chinese Internet.All parties in the industry responded fiercely.

"Mr. Wang, I heard that Nanshan Semiconductor is in contact with ASML to discuss the purchase of photolithography machines."

"Now there is news that Nanshan Semiconductor has acquired a wafer fab and packaging and testing plant of Japan's Renesas Electronics. It seems that Nanshan Semiconductor is really preparing to flex its muscles in this field."

BYD has also been vigorously developing its semiconductor business in the past two years, and Liang Chuanqing also hopes that he can make more noise like Nanshan Semiconductor.

However, BYD does not have that much money to invest in the international semiconductor market.

Now that I see the news about Nanshan Semiconductor, I am naturally a little bit sour.

"Renesas Electronics' global market share in the small and medium-sized driver chip business reaches 30%, with 19 wafer fabs and supporting packaging and testing plants."

"Now that the semiconductor industry is in a slump, they just sold a factory that was about to be eliminated to Nanshan Semiconductor. This is just an ordinary business. It can really have a big impact on Nanshan Semiconductor if it is not seen."

"The culture of Japanese companies in particular is very special. Whether Nanshan Semiconductor can successfully complete the control of this factory is also a question."

Wang Fu is not willing to easily engage in acquisitions in the international market, as that would be too troublesome.

The most critical thing is that the current acquisition of US$1 million is not something BYD can afford.

"Renesas will definitely not sell its most advanced wafer fab to Nanshan Semiconductor, but in the past few months, Nanshan Semiconductor has poached many semiconductor technical talents from Japan, Korea and other places."

"Based on the talent base of these talents, they are likely to be able to digest and absorb the relevant technologies of Renesas's factory in a relatively short period of time."

"Then with the use of more advanced equipment, there may be breakthroughs in related technologies soon."

"By then, Nanshan Semiconductor's influence in the domestic semiconductor industry will be different from what it used to be."

Liang Chuanqing has always felt that BYD's semiconductor industry is the best in the automotive industry in Lingnan Province.

Now it is discovered that this industry will be surpassed by Nanshan Semiconductor, so naturally it is very anxious.

"Hard to say!"

"Whether it is Renesas Electronics, Elpida, or Qimonda, they are now in a state of loss."

"Nanshan Semiconductor has acquired a wafer fab and packaging and testing plant of Renesas Electronics. It may not be able to reverse the situation immediately."

"Even if Nanshan Group hands over all the chips it needs to the acquired factories for production, it may not be able to turn losses into profits."

"There is a high probability that after Nanshan Semiconductor spends US$1 million to acquire such a factory, it will need to prepare hundreds of millions of dollars in losses before it can truly utilize this factory and provide some assistance to the development of Nanshan Semiconductor."

Wang Fu's judgment made Liang Chuanqing relieved.

If the other party doesn't surpass him so easily, then he can breathe a little easier.

Otherwise, something that I have worked hard for several years will be surpassed by others in an instant, and that feeling will be a bit uncomfortable.

However, not everyone has the same views as BYD.

"Mr. Xu, Nanshan Semiconductor is very courageous. It actually plans to engage in wafer production by itself and wants to engage in chip production for the entire industry chain. This is not the same as the mainstream trend of the current development of the semiconductor industry."

After seeing today's news, Lian Zhitian couldn't help but come to Xu Jun and chat about Nanshan Semiconductor's acquisition of Renesas Electronics' wafer fab and packaging and testing plant.

"This path is indeed a bit different. Now most manufacturers in the industry have begun to focus on chip design, and the production of wafers and other products has been handed over to other professional foundries such as TSMC."

"The chips produced in this way are the most cost-competitive, and they also allow semiconductor manufacturers to better reduce their risks."

"However, if Nanshan Semiconductor can take this path smoothly, then there will definitely be a place for them in China's semiconductor industry in the future."

Xu Jun also wanted Huawei HiSilicon to engage in one-stop production in the chip industry.

However, since there is always one or two generations behind others in terms of advanced manufacturing processes, in the field of communications electronics, if there is no way to make up for this gap, it will be difficult to make our products competitive.

So in the end, HiSilicon can only focus on chip design, leaving wafer production to professional manufacturers such as TSMC.

This model, looking at it now, has no problems at all.

After all, no one could have imagined that one day TSMC would be unable to provide OEM services to HiSilicon due to special reasons.

"Nanshan Semiconductor's previous focus was on automotive chips. These chips have relatively low wafer process requirements. Even products that are one or two generations behind will not affect the performance of the chips."

"Even whether it is Renesas Electronics or Infineon's automotive-grade chips, the production process is already two generations behind the industry's most advanced technology."

"There are even some more traditional parts, but the chips on them are still technology from seven or eight years ago. This does not affect the production of parts."

Lian Zhitian feels a little emotional that Nanshan Semiconductor has chosen a very precise track. This track best meets the development needs of Nanshan Group, but it can also avoid its disadvantaged position very well.

"Nanshan Semiconductor's actions are very big. They should not be satisfied with acquiring such a wafer manufacturer with backward technology. There will definitely be various other actions in the future."

"We can keep in close contact with each other. If we have some chips that do not have very high technical requirements, we can consider handing them over to Nanshan Semiconductor's wafer factory for OEM."

"This can also be regarded as an approach to reducing our supply risks and supporting the development of the domestic semiconductor industry."

Xu Jun quickly gave his own opinion on how to deal with this news.

The more developed China's semiconductor industry is, the better it will be for HiSilicon.

After all, their chips are mainly for the company's own use, and there is not much competition with other chip manufacturers.

Even if there is, the overall level of the domestic semiconductor industry has improved, and HiSilicon will enjoy more benefits than harm.

"Well, that's what I thought too."

"If one day Nanshan Semiconductor builds a wafer fab in China, then we should give some business to the other party to show our support."

"Especially for those chips supplied to Nanshan Group, it is best to put them all in Nanshan Semiconductor OEM."

Lian Zhitian and Xu Jun had the same idea on this point.

Having more choices is a good thing for HiSilicon.

However, not everyone thinks that Nanshan Semiconductor’s acquisition of Renesas Electronics’ wafer fab is a good thing.

There are intense discussions going on within Toyota Motor Corporation.

"President, Renesas Electronics sold its wafer fab to Chinese manufacturers for short-term profits. This is feeding a tiger with trouble."

"I think it is necessary for companies to strengthen their control over Renesas Electronics so that their boards of directors can listen to our opinions."

Tetsuaki Kobayashi, as the head of R&D at Toyota Motor, naturally knew about Renesas Electronics selling a wafer fab and packaging and testing plant to Nanshan Semiconductor.

At the beginning, he didn't know what the relationship between Nanshan Semiconductor and Nanshan Group was.

I thought this was just some Chinese manufacturer who had too much money to come over and buy random things.

But later he discovered that Nanshan Semiconductor is a company under the Nanshan Group and is a sister company to Xingchen Automobile and Nanshan Auto Parts. His attitude immediately changed.

In Kobayashi Tetsuaki's view, Renesas Electronics' wafer fab cannot be sold to Nanshan Semiconductor even if it is shut down.

"Resas Electronics is also under great pressure now. It is 100% likely to fall into a huge loss this year."

"According to current industry forecasts, we will definitely lose money next year, and there is a high probability that we will also lose money the year after that."

"Basically, it will take three to five years before we can get out of the quagmire of industry development."

"Although the government has some financial subsidies, our various car companies have also provided them with some funds through prepayment and other methods."

"But relying on these funds is not enough. Renesas Electronics needs to prepare at least several billion dollars in cash to deal with future losses."

"Closing some factories with high costs and selling some factories with relatively backward technology is a last resort."

"Even if we object, the other party will not agree."

"Unless we can become the majority shareholder of Renesas Electronics, but the current economic situation is uncertain, the board of directors will not easily agree to our investments."

Watanabe Jisaki's mind is very clear.

What can be done and what cannot be done.

He always has a strong balance in his heart.

"This is the truth, but if Nanshan Semiconductor masters the production technology of car-grade chips, in the future, China's independent brand car companies will use Nanshan Semiconductor's chips, which is a potential threat to our company."

Kobayashi Zheming has already felt that future cars will have more and more chips.

This area of ​​business was previously the weakest area for Chinese manufacturers.

It is also a place where Japanese parts companies and vehicle companies can easily crush.

If this part of the business is also reversed, it will be even more difficult to reflect Toyota's competitive advantages in the design of new models in the future.

"Our semiconductor industry has developed for decades to achieve today's results. China has only paid attention to the development of semiconductors in the past few years. How can it catch up with everyone so easily?"

“In this field, technology is constantly changing every year.”

"You are two or even three generations behind others. It is not that easy to catch up."

Watanabe Yoshiaki does not think Nanshan Semiconductor can achieve anything in a short time.

If semiconductors were so easy to develop, companies all over the world would have rushed to do it.

How could we wait for this situation?
"It's really not that easy for ordinary companies to catch up."

"But Nanshan Group is a rather evil company, and many things that are difficult for everyone to understand will happen."

"So I think we still can't take it lightly!"

Katsaki Watanabe:……

(End of this chapter)