My Age of Investment

   Chapter 1415 Comprehensive Development Strategy

   "Now the lawsuit has been officially declared over, which means that the final merger obstacle does not exist anymore. To arrange for Huaxin International to integrate into the Fuxing Semiconductor family as soon as possible, five fingers can only be clenched into a fist to crit the enemy."

   "The indemnity is drawn from Fuxing Semiconductor's account as part of the transaction consideration paid by Fuxing Semiconductor to Fuxing Industrial Investment."

   "The cash reserves on Fuxing Semiconductor's account may not be enough. Contact all shareholders to arrange a new round of financing."

   "One more thing, if other shareholders are unwilling to join the investment, then the Fuxing Industrial Holding Group will continue to invest alone."

  …

   After returning to the Fuxing Industrial Park in Silicon Valley, Xia Jingxing called everyone for a non-stop meeting.

   In front of the executives of Fuxing Semiconductor, Xia Jingxing began to issue orders one by one.

   Liu Xiaoduo sat aside and typed frantically at the computer, all orders given by Xia Jingxing would be issued from her.

   Hearing that it would cost money again, Deng Yuanjun frowned slightly and said, "Mr. Xia, if the old shareholders of Fuxing Semiconductor are unwilling to join the investment, do we have to let the parent group increase its shareholding? Can we consider introducing new shareholders?"

   Among the current seven sons of Fuxing, Fuxing Semiconductor and Fuxing Aerospace are a little special and are not wholly-owned by the parent group.

  For example, Fuxing Semiconductor, Fuxing Industrial Group only holds 72.63% of the company's equity, and at the same time controls the employee stock ownership platform through executives acting as GPs, and there are also six VC shareholders.

   Last year, Fuxing Industry only held a 58.95% stake in Fuxing Semiconductor. After this year's Fuxing Industrial Group invested an additional 5 billion yuan, its shareholding ratio rose to 72.63% today.

   At that time, the six major VC shareholders gave up the follow-up investment, and now Fuxing Semiconductor is facing a larger-scale capital increase once again. In front of ordinary startup companies, the VC fund of the gold master’s father is very difficult to cope with, and basically gave up the follow-up investment.

   However, the focus is on participation. In the future, the six major VC funds will inevitably include Fuxing Semiconductor in their respective classic investment cases, and there will be materials for LP investment.

Xia Jingxing pinched his chin, thought carefully about Deng Yuanjun's proposal, then shook his head and laughed, "I also want someone to accompany us to jump into the fire pit, but the current scale of Fuxing Semiconductor has seriously exceeded the investment scope of VC funds, they will not Don't embarrass them for overweight investment.

   Besides, the 100 billion invested in the rejuvenation of industrial production also has several billion invested by them, which is quite interesting. "

   "Then let's contact PE Fund!"

  Deng Yuanjun blinked at Xia Jingxing and said, "Goldman Sachs, Deutsche Bank, and Temasek's wholly-owned venture capital subsidiary, Xiangfeng Group, used to be shareholders of Huaxin International.

Now Huaxin International has cleared all the risks and is about to merge into Fuxing Semiconductor Group, which is rising like the sun. The overall valuation is not too high. At the same time, it is backed by the huge resources of Fuxing Industry. I think international PE capital Should be interested in this case. "

  Xia Jingxing was silent. At present, Fuxing Semiconductor probably has several major sector assets such as Spreadtrum (design), Fuxing Semiconductor Magic Capital Factory and Huaxin International (manufacturing), Huaxin International Rongcheng Packaging and Testing Factory (packaging and testing).

The layout of   IDM looks quite grand, but in fact, each asset sector is not very valuable and cannot be estimated.

  For example, Spreadtrum Communications was on the verge of delisting before it was acquired. In the second half of this year, with the crazy shipment of Shenxin SC6600L, it took away a lot of the market share that originally belonged to MediaTek, and the business improved slightly.

   The current valuation of this company must have increased from the previous acquisition price of more than 200 million US dollars, but the increase is limited, and the potential will not be fully reflected until next year and the year after.

The mobile phone SoC chips, IoT home appliance chips and other departments that Fuxing Industry invested heavily to build have now all been merged into Spreadtrum's "big chip design platform", but the products have not been officially launched at this time, and it is impossible to estimate good price.

   The most pitiful one is Huaxin International. With a compensation of US$1 billion plus a purchase price of US$1.2 billion, Fuxing Semiconductor paid a price of US$2.2 billion for the chip manufacturing plant.

   In addition, Huaxin International lost 3 billion yuan last year, and this year is expected to lose 6.5-7 billion yuan.

  Although most of these losses are due to equipment depreciation, in the eyes of PE capital, Huaxin International may not be worth $2.2 billion.

  Introducing new shareholders in this context requires some wrangling and negotiation on valuation issues.

   But now is a critical moment in the race against time to develop the semiconductor business, and there is no time to slow down the pace of development on these issues.

  Xia Jingxing understood what Deng Yuanjun meant. The latter wanted to let international capital come in and get a share of the pie, so as to reduce the resistance of Fuxing Semiconductor to introduce advanced technology, manufacturing equipment and materials in the future.

   In addition, you can learn the new core model, bundle several big capitals, and play money-burning games together to reduce the financial pressure of Fuxing Industrial Group and Daxia Capital.

   "Forget it this time, don't introduce new shareholders. The main time is not ripe, and I am afraid that international capital is also worried that we will not be able to effectively integrate these loss-making assets."

   Seeing that Xia Jingxing had made up his mind, Deng Yuanjun nodded and said no more.

Xia Jingxing glanced at Zhang Rujing, who seemed a little depressed between his brows, knowing that the other party still had some knots in his heart, so he said, "Old Zhang, didn't you say that you would continue to expand production capacity? Now the time is fully ripe, how much investment will be required? Money, you quickly make a budget and hand it over, and I will approve it for you right away."

   Hearing this, Zhang Rujing's face immediately recovered, and he squeezed out a smile and asked: "Mr. Xia, you mean to buy the Rongcheng and Jiangcheng factories that were operated on behalf of them, and restore the construction of the new Pengcheng factory that was stopped?"

  Xia Jingxing smiled and nodded, "Yes, in addition, Fuxing Semiconductor's Magic Capital Manufacturing Factory has also merged into the system of Huaxin International, so I do the math, Huaxin International has it...

  Modu has two 300mm fabs and three 200mm fabs;

  Two 300mm fabs in Beijing;

   A 300mm fab in Jiangcheng;

   One 200mm fab each in Jinmen, Rongcheng and Pengcheng.

  A total of 11 fabs, after full production, the monthly production capacity of wafers will exceed 400,000 wafers, covering all foundry products from 0.35 micron to 45 nanometers.

   Oh, I almost forgot, there are also supporting packaging and testing factories. One factory in Guangrong City is not enough, and we need to continue to build several new factories. "

   Hearing Xia Jingxing's words, Zhang Rujing's heart lit up with fire, but then he thought, can such a huge production capacity be digested?

   Huaxin International has lost tens of billions of RMB in recent years, which is not unrelated to his crazy construction of the wafer factory.

   However, he is quite good at budgeting. Many equipment and production lines are purchased second-hand. Otherwise, with the capital strength of Huaxin International, it is impossible to create a big scene with ten fabs in hand in a short period of time.

  After taking into account the yield, about 500 chips can be cut from a wafer.

   This also means that the monthly production capacity of 400,000 wafers is equivalent to about 200 million chip shipments. The internal procurement of Fuxing Industrial Group alone cannot digest such a large capacity.

Thinking of this, Zhang Rujing persuaded: "Mr. Xia, the industry has been sluggish in the past two years, and even Bay Power has lost money in the first quarter of this year. Otherwise, we should delay for a year and a half before increasing production on a large scale. For the time being, we will wait and see. "

  Xia Jingxing smiled slightly, "Don't worry too much about this problem, the integration of 11 fabs has been completed, the yield rate has increased, and the advanced process technology has reached maturity. The completion of these steps will be at least next year or even the year after.

   By then, we will have a lot of big chip users, such as Fuxing mobile phones, Honor mobile phones, Conscience mobile phones, and Conscience computers.

  Chrysanthemum Factory, ZTE, Meizu, Rice and other domestic mobile phone manufacturers have basically negotiated, and they will purchase Spreadtrum's baseband chips and even SoC chips.

  If this is not enough to digest all the production capacity, then we can also raise the price butcher knife, cut it at the head of the bay electrician, and rob them of customers. "

   As soon as Xia Jingxing finished speaking, everyone could not help frowning.

   The time is too fast!

   In order to fully achieve the boss's strategic vision, the chip design and manufacturing departments must carry out a strategic cooperation to achieve the effect of seamless connection.

   Spreadtrum must come up with mature design solutions for baseband chips and SoC chips.

As for Huaxin International, on the one hand, it needs to integrate major fabs to increase production capacity and improve product yield. need.

   At the same time, Huaxin International will also go to grab the customers of Bay Power and digest the large-scale increase in the production capacity of the fab to offset the huge equipment depreciation and personnel expenses caused by the large-scale increase in production.

   In this race against time, whoever is slow in the design and manufacturing departments will become the first domino to fall, and then cause a global collapse.

   Even if all the strategies proposed by Xia Jingxing are implemented, Huaxin International will inevitably suffer huge losses due to the price war.

   Spreadtrum is also fighting a price war with MediaTek at the moment. There is basically no profit, and it is a loss-making profit.

However, from another point of view, achieving chip self-sufficiency is of great benefit to the revival of mobile phones. First, the core technology has not been thrown away by the wisdom fruit of self-developed SoC chips. Second, there is no need to worry about Samsung's sudden chip supply or trouble in the future. Other crap.

   In short, the task is very arduous, but once successful, the harvest will be huge, and the development of Spreadtrum and Huaxin International will at least take a step up.

   In contrast, the profit sacrificed by a little obedience to the general direction strategy is somewhat insignificant, and it belongs to the price that must be paid in the process of growth.

  Because it is still far from the time when Fuxing Semiconductor starts to make money, developing the core technology of chip design, improving the high-end process technology, and cutting a large piece of the market share of the chip design and manufacturing business is the first priority.

  Only when you have these cards in your hands, will Fuxing Semiconductor be competitive, otherwise you won’t be able to fight a price war.

  For example, Gulf Power has started to manufacture 28nm mobile phone chips, and Huaxin International is still humming humming 45 nanometer technology. Both sides are not on the same competitive platform, so the price war is naturally out of the question.

  The semiconductor industry is so cruel. If you want to fight with others, at least you have to stand in front of them first, otherwise it will become Guan Gong and Qin Qiong.

   The series of development strategies proposed by Xia Jingxing are also from the perspectives of the company's capital, resources, technical shortcomings, and long-term competition, which are quite challenging.

   If we want to make a general summary, there are only four words - "comprehensive development", and we can't deviate from one homework.

   (end of this chapter)