Reborn on the Internet: Starting with Games

Chapter 516 The Crisis of SMIC

On September 9, Lehman Brothers, the fourth largest investment bank, filed for bankruptcy protection due to investment failures and failed acquisition negotiations, triggering a global financial tsunami, global stock market turmoil, and the evaporation of nearly 15% of the world’s stock prices. .

None of the domestic listed companies were spared, and their assets all shrank to varying degrees. However, Century Zongheng Group, which claims to never go public, escaped the disaster.

Chen Hao heard the news about the financial crisis. Under the influence of the "global financial crisis", the pressure on foreign trade increased sharply, and the property markets across the country entered a downturn one after another, contrary to the boom last year.

But he knew that this was just a nap for the housing price tiger. Then with the introduction of the 4 trillion bailout plan, it would be like a tiger descending out of control.

Noon has arrived, and it's his turn to take action.

With Wang Sicong's help, Chen Hao first went to Dalian in person to meet with Mr. Wanda to learn from his experience.

Then he took his small team and transformed into a real estate speculator team, leading relevant employees of the real estate company, carrying tens of billions of dollars, and traveled around the country to carry out quick-fix blitzes one after another.

Housing in the school district of Beijing, the Bund in Shanghai, and sea-view housing in Sanya all leave their mark.

There was even a rumor in the real estate sales circle in September that if you encounter four handsome guys who speak Northeastern dialect and come to look at the house, you must do your best to catch them. They are big customers.

Because other people buy houses and discuss condominiums, this group of people buy houses and discuss condominiums, and they are decisive and aggressive.

When the price remains unchanged, the number of components that can be accommodated on an integrated circuit will double every 18-24 months, and the performance will also double accordingly - Moore's Law

According to Moore's Law, the performance of electronic products at the same price will double in 18-24 months, and this law will be valid for fifty years.

On a chip the size of a fingernail, there are millions of transistors.

When the chip manufacturing process reaches a certain stage, it will become an absolute watershed.

Looking at the development of the entire chip process, it is really full of blood and tears. Even powerful foreign companies such as IBM, Intel, GlobalFoundries and other large companies will fall down when they say they will fall, and give up when they say they will give up.

Back to the topic, SMIC is currently the only semiconductor foundry company in China that can handle this.

Now affected by the global financial crisis, SMIC's stock price has been falling steadily.

Even if SMIC has cheap land and various policy subsidies, it cannot spread this cost.

Each generation of wafer technology requires billions or even tens of billions of dollars of investment, and the newer the generation, the greater the requirements for technology and capital.

Therefore, as a chip foundry company, it must have a large enough sales volume to be able to amortize the huge initial capital investment and obtain profits.

Otherwise, you will have to keep losing money.

In 2000, SMIC was founded

In 2007, SMIC suffered a loss of US$1950 million.

In 2008, SMIC has lost US$3.6 million so far and is expected to lose more than US$4 million by the end of the year.

Therefore, SMIC has never made a profit in the eight years since its establishment. This is a foreign invasion.

The internal worry is that internal management conflicts continue, and due to the influence of the market, the conflicts have completely intensified.

In fact, regardless of internal and external troubles, one thing shows: How long can the company's money last?

Founder Zhang Rujing is also facing the risk of being forced into the palace and is in urgent need of new capital injection to stabilize the situation.

Zhang Rujing was born in the mainland, grew up in the Gulf, and became successful in the United States. He later returned to the mainland to help develop the semiconductor industry in the mainland. At the beginning of the establishment, he led 300 talents from the Gulf to build factories in the mainland. From the beginning, Zhang Rujing founded SMIC as a foreign-funded company, intending to weaken the role of state-owned enterprises in SMIC, so as to avoid the international community’s “judgment of the nature” of SMIC.

"Nature judgment" is very important. If the international community judges that SMIC is a state-owned enterprise, it will be subject to many high-tech technology controls in the West, which will have negative consequences for SMIC's continuous upgrading of technological progress.

Of course, Zhang Rujing, who has a technical background, thinks about more than just capital gains. At the board meeting, he expressed his interests and sorrows bitterly.

"You only see SMIC's poor performance, but you don't see that other foreign peers started 20 years earlier than SMIC. SMIC is using its own losses year after year to drive the rapid iterative upgrade of the entire Chinese semiconductor industry."

It's a pity that money-minded shareholders won't care about you. What's more, starting in 2008, the price of memory chips plummeted, and SMIC fell into financial difficulties.

Due to the rapid expansion, which coincided with the financial crisis, product prices plummeted, causing SMIC to be unable to survive. This was all the blame placed on Zhang Rujing by shareholders.

In fact, SMIC does not lack ways to make money.

Many well-known international private equity firms, including Blackstone and TPG, approached Zhang Rujing, hoping to acquire equity and settle in SMIC.

At the same time, many state-owned enterprises are also willing to invest, such as Datang Telecom, China Resources, and Electronic Information Industry Group.

At this time, Zhang Rujing was faced with a major decision, whether to take private equity money or state-owned enterprise money. The SMIC board of directors had a huge dispute over this matter.

If you take the money from private equity, then SMIC will completely become a foreign company and be controlled by external capital. Choosing another party will create many restrictions and constraints, and you want to turn SMIC into its accessory.

No matter which option he chooses, Zhang Rujing also understands that for his radical strategy of exchanging money for time, being kicked out is an inevitable result.

In fact, the most ideal thing is to choose a domestic private enterprise with strength and ambition to inject capital, but time waits for no one, and the situation does not allow him to make a choice.

At this moment, Zhang Rujing heard from his assistant that Mr. Chen Hao, chairman of Century Zongheng Group, came to visit.

Two flowers bloom, one on each side.

If there are people who worry about making money, then there must be people who worry about spending money.

And this person is definitely not Chen Hao. He can easily buy properties worth hundreds of millions without blinking an eye. He is very heroic.

In less than 10 days, nearly 30 billion yuan was almost sold out, which made Xu Pengkun very worried. He was worried that it had been more than half a year, and Century Investment had spent less than 20% of this year's billion yuan quota.

After all, if you don't spend all the money before the end of the year, your performance will be deducted. Yes, even if you are the chairman's beloved relatives and friends, you will still have performance.

Everything was set by the best friend in front of me who was chatting with the real estate boss.

If the investment is exhausted, the additional budget will be added next year. If it is not fully spent, the amount will be halved next year.

Century Investment has achieved remarkable results in these years. From the initial 17173, 5173, and hao123 to Xunlei, Kugou, and A Station, it has brought considerable help to the entire group.

Other industries such as errands, weddings, online convenience store chains, and garbage recycling are all involved in investment, and there are countless cases of investment failure.

The main strategy is to cast a wide net, and you will always make money by catching one or two koi. This is the strategy of Century Investment.

Just when Xu Pengkun was worrying about gains and losses, he received a call from the strategic investment department below.

After a few minutes, he became energetic and went through the whole incident in his mind. If this matter came to pass, it would be a big job.

(End of this chapter)