The rise of nanometers

May 22, 2013.

This year's third tropical cyclone "Capricorn" began to move towards Nanbo Bay after entering the South China Sea.

The storm brought by the typhoon has a huge impact on the production and life on the island.

In Hsinchu Industrial Park.

The TSMC headquarters building is also facing a "storm" at this time.

The reshuffle of the global semiconductor industry has entered a more intense stage this month.

MediaTek was officially merged by Datang Semiconductor in early May, 54.6% of Korea Samsung's shares were swallowed up by Chinese capital, UMC was controlled by Inspur, Tokyo Electronics announced that it had entered bankruptcy and reorganization, VietSin Materials was merged by Applied Materials of the United States, and Hynix was completely Sold to Yangtze River Storage.

These things have been going on fiercely in the past few months, and large companies have been beaten to the point of begging for mercy, not to mention the small companies.

Zhang Zhongmou couldn't help but tremble as he held the document in his hand. The document in his hand was the Nanbo Bay Semiconductor Industry Research Report.

At its peak, the Hsinchu Industrial Park had about 400 semiconductor-related companies, with annual operating income of 30 to 50 billion yuan, and 113,000 semiconductor practitioners. It was known as the "Silicon Valley of the East."

However, due to successive major impacts, Hsinchu Industrial Park began to decline from prosperity to decline in 2011.

At this time, there are only 86 companies left in the industrial park that have not gone bankrupt or have not been acquired; there are only about 27,000 related semiconductor practitioners left.

Obviously, as the leading semiconductor company in Nanbo Bay, TSMC has become the last bastion of the semiconductor industry in Nanbo Bay.

But Zhang Zhongmou also felt helpless.

Li Yuanzhao, the manager of the legal department on the side, said painfully: "Mr. Zhang, let's surrender! If we continue, the company will have no choice but to file for bankruptcy."

"Li Yuanzhao, you are a rip-off..." A vice president yelled.

Zhang Zhongmou slapped the table and shouted: "Okay! What time is it now? What's the use of blaming each other here?"

Deputy Technical Executive Officer Cai Guobin said with a serious face: "Everyone, in fact, Manager Li is right, we really can't sustain it."

They naturally knew the difficult dilemma before them.

TSMC is deeply involved in photolithography. Although it can now mass-produce 16-18nm chips on a small scale, the problem is that they have encountered a very fatal problem - patents.

correct! It's a patent issue.

Logically speaking, with TSMC’s industry status as the world’s largest photolithography chip foundry, coupled with its support from Wall Street, it has close exchanges and cooperation with the top and bottom of the photolithography semiconductor industry. Even in terms of semiconductor patent holdings, it has has always been among the best.

Under normal circumstances, only TSMC is responsible for collecting patent fees from others or holding others back.

But TSMC succeeds with photolithography and fails with photolithography.

If the photolithography method is united internally, then TSMC can rely on its own patent library to reach mutual patent exemptions with other companies and even receive some patent fees.

The problem lies in the internal divisions of photolithography semiconductor companies. After SMIC went bankrupt, it was acquired by ZTE. Other Chinese-owned companies have successively taken control of photolithography semiconductor companies such as MediaTek, UMC, Korea Samsung, and Hynix.

This situation has resulted in part of the total patent library of photolithography semiconductors being controlled by Chinese capital.

However, within the Chinese Semiconductor Alliance, textile semiconductors are used and there is no need for patent exemptions from TSMC, Intel, Qualcomm and Apple.

As a result, these photolithography semiconductor patents have become weapons for Chinese-owned enterprises, which either prohibit them from using their patents or charge high patent fees.

Affected by the patent war, TSMC has been severely affected. The chip production line cannot produce at all, and it will be sued once it is produced.

If, like Intel and Texas Instruments, there is a huge local market, they can still fight a long patent lawsuit and use local favoritism to resist.

However, TSMC is an export-oriented company. If it does not comply with patent laws, it will be difficult to operate in the international market.

Zhang Zhongmou wants to compromise and plans to sell part of TSMC shares to Huawei.

Unfortunately, his little plan failed. Not only were there huge internal differences within the Nanbo Bay Integrated Circuit Investment Fund (one of TSMC's major shareholders), but Wall Street, which has been busy with local economic issues, also blocked Huawei's acquisition of TSMC.

Under the torment between the two sides, TSMC also began to reach the end of the road.

In the first quarter, there was a loss of 8.6 billion yuan, and in the second quarter, there was a direct loss of 15.7 billion yuan. Including the previous losses, TSMC's current debt is as high as 57.3 billion yuan, and this number is increasing day by day.

Originally, they wanted to make a comeback with new technology, but their desperate gamble on new technology made them lose everything, accelerating TSMC's demise.

The closed-door meeting lasted from noon to the dead of night.

Zhang Zhongmou has been on the phone with Nanbo Bay Integrated Circuit Investment Fund and Wall Street investors, hoping that they can sell TSMC shares.

But the answers he got were all vague and perfunctory.

Several investment companies on Wall Street are interested in selling shares, but Noah will not agree to this matter, and they currently have no funds to mobilize to acquire TSMC.

Based on the current situation, it is obvious that Wall Street intends to wait for TSMC to go bankrupt before acquiring related assets back.

The gray-haired Zhang Zhongmou didn't eat all day, and his voice was hoarse from talking on the phone. In the end, he only got perfunctory and rejection.

Cai Guobin, the deputy technical executive on the side, brought a lunch box to the table: "Mr. Zhang, eat a little! Your health is important."

Looking at the other people in the conference room who did not dare to eat, Zhang Zhongmou nodded: "Everyone, let's eat!"

After speaking, I opened the lunch box and took a few bites even though the food was tasteless.

In order to lighten the atmosphere, Cai Guobin turned on his computer, called up today's entertainment program, and played it on the big screen.

While eating, Zhang Zhongmou saw a familiar name appear on the news scrolling entry below the program.

He stopped his chopsticks and asked his secretary to bring up today's news.

I quickly found the news.

It turned out that after the ZTE Group reorganized ZTE Microelectronics, it invited Zhang Rujing to serve as the chief technology executive of ZTE Microelectronics.

ZTE Microelectronics also issued invitation advertisements, inviting domestic and foreign semiconductor practitioners to join ZTE Microelectronics.

Apparently, after merging the remaining assets of SMIC, ZTE intends to use Zhang Rujing's influence in the semiconductor industry in Nanbo Bay to attract more semiconductor practitioners on the island to join ZTE Microelectronics.

After reading this piece of news, Zhang Zhongmou was silent for a long time.

Everyone did not dare to make a sound and could only eat in silence.

After all, the feud between Zhang Rujing and TSMC can almost be said to be irreconcilable. Now TSMC is on the verge of collapse. With Zhang Rujing's influence in the industry, it is estimated that a large number of technical personnel will be pulled away.

"The general trend is like this, what can be done about it!" Zhang Zhongmou lamented.

May 25, 2013.

TSMC has begun large-scale layoffs, and more than 90% of its employees have been laid off. This is the fourth time they have laid off employees this year.

Bad news also came from patent companies in Australia and Western Europe. TSMC was judged to have infringed on 3,587 patents of the Semiconductor Alliance and had to pay a total of 67.2 billion yuan in compensation.

Finally, on the morning of the 26th.

The once arrogant world chip foundry giant applied for bankruptcy protection in the local court, and TSMC collapsed.

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