My Age of Investment

"Now that the lawsuit has officially ended, it means that the final obstacle to the merger no longer exists. We must arrange for Huaxin International to integrate into the Fuxing Semiconductor family as soon as possible. Only by clenching five fingers into a fist can we critically attack the enemy."

"The compensation was deducted from Fuxing Semiconductor's account as part of the transaction consideration paid by Fuxing Semiconductor to Fuxing Industrial Investment."

"Fuxing Semiconductor may not have enough cash reserves on its books. It will contact all shareholders to arrange a new round of financing."

"Add one more thing, if other shareholders are unwilling to follow the investment, then 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 meeting without stopping.

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

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

Hearing that money was needed again, Deng Yuanjun frowned slightly and said: "Mr. Xia, if the old shareholders of Fuxing Semiconductor are not willing to follow the investment, do we have to let the parent group increase its shareholding? Can we consider introducing new shareholders?"

Currently, among the seven Fuxing companies, neither Fuxing Semiconductor nor Fuxing Aerospace is wholly owned by the parent group.

For example, Fuxing Semiconductor, Fuxing Industrial Group only holds 72.63% of the shares, and there are six other VC shareholders.

Last year, Fuxing Industrial Group only held a 58.95% stake in Fuxing Semiconductor. After Fuxing Industrial Group invested an additional RMB 5 billion this year, it now holds a 72.63% stake.

The six major VC shareholders gave up the follow-up investment at that time. Now Fuxing Semiconductor is once again facing a larger capital increase. In front of ordinary startups, the VC fund that is the funder's father seems to be somewhat powerless.

Xia Jingxing held his chin and thought carefully about Deng Yuanjun's words, then shook his head and laughed, "I also want someone to jump into the fire pit with us, but based on the current scale of Fuxing Semiconductor, it has seriously exceeded the investment scope of the VC fund."

"Then contact PE Fund!"

Deng Yuanyun winked at Xia Jingxing and said: "Goldman Sachs, Deutsche Bank, and Temasek's wholly-owned venture capital subsidiary Vertex Group were all shareholders of Huaxin International in the past.

Now that Huaxin International has cleared all its risks and merged into Fuxing Semiconductor Group, which is rising like the sun, the overall valuation is not too high. I think international PE capital will be interested. "

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

The layout of idm looks very grand, but in fact it is not very valuable and cannot be valued.

For example, Spreadtrum was on the verge of delisting before being acquired. In the second half of this year, with the crazy shipment of Shenxin sc6600l, which took away a lot of MediaTek's market share, the business began to improve slightly. The current valuation of this company There is definitely an increase from the purchase price of more than 200 million US dollars, but the increase is limited, and the potential will not be fully realized until next year or the year after.

The mobile phone SOC chips and IoT home appliance chips that Fuxing Industrial invested heavily in have now been merged into Spreadtrum's system, but the products have not yet been officially launched, and it is difficult to estimate a good price.

The most deceptive one is Huaxin International. With a compensation of US$1 billion and a purchase price of US$1.2 billion, Fuxing Semiconductor paid US$2.2 billion to acquire this chip manufacturing plant.

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

Although most of these losses are due to equipment depreciation, in the eyes of PE Capital, Huaxin International is probably not worth US$2.2 billion.

To introduce new shareholders, wrangling and negotiation are indispensable on valuation issues.

But now is the time to race against time, and there is no time to slow down the pace of development on these issues.

Xia Jingxing understood what Deng Yuanjun meant, let international capital come in to get a share of the pie, and weaken the resistance to the introduction of advanced technology, manufacturing equipment and materials for Fuxing Semiconductor in the future.

In addition, you can also learn from Xinxin’s model, bundle several large capitals, and play money-burning games together.

"Forget it this time. The main reason is that the time is not ripe. I am afraid that international capital is also worried that we cannot effectively integrate these loss-making assets."

Seeing that Xia Jingxing had made up his mind, Deng Yuanjun nodded and said nothing more.

Xia Jingxing glanced at Zhang Rujing, who looked a little depressed. Knowing that the other party still had unresolved problems, he said, "Lao Zhang, didn't you say before that you would continue to expand production capacity? Now that the time is completely ripe, how much investment is needed? Make a budget quickly and submit it."

Upon hearing this, Zhang Rujing's face immediately regained its vitality and asked: "Mr.

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

There are two 300mm wafer fabs and three 200mm wafer fabs in Shanghai;

Two 300mm wafer fabs in Beijing;

A 300mm wafer fab in Jiangcheng;

Jinmen, Rongcheng, and Pengcheng each have one 200mm wafer fab.

There are a total of 11 wafer fabs, and once they are all fully produced, the monthly wafer production capacity will exceed 400,000 pieces, with products covering 0.35 micron to 45 nanometer processes.

As for the packaging and testing factory, just one factory in Rongcheng is not enough, and several new factories will continue to be built. "

Hearing Xia Jingxing's words, Zhang Rujing felt a burning sensation in his heart, but then he thought, can such a huge production capacity be digested?

Huaxin International has lost tens of billions in recent years, which is not unrelated to its crazy construction of wafer factories.

However, he is quite economical. Many of the equipment and production lines are purchased second-hand. Otherwise, Huaxin International's capital strength would not be able to build ten wafer fabs in a short period of time.

After accounting for yield, one wafer can cut approximately 500 chips.

This also means that the monthly production capacity of 400,000 wafers is approximately equivalent to the shipment of 200 million chips. Fuxing Industrial Group's internal procurement alone will certainly not be able to absorb such a large production capacity.

Thinking of this, Zhang Rujing advised: “Mr.

Xia Jingxing smiled slightly, "Don't worry about this problem. The 11 wafer fabs have been integrated, the yield rate has increased, and the advanced manufacturing technology has reached maturity, at least next year or even the year after.

By then, we will have a large number of major chip users such as Fuxing Mobile, Honor Mobile, Conscience Mobile, and Conscience Computer.

Domestic mobile phone manufacturers such as Juhua Factory, ZTE, Meizu, and Rice have also reached an agreement. They will purchase Spreadtrum's baseband chips and even SOC chips.

If this is not enough to absorb production capacity, then we can also raise the price butcher knife and compete with Gulf Power for customers. "

As soon as Xia Jingxing finished speaking, everyone frowned.

We are so pressed for time!

To achieve the boss's strategic vision, the chip design and manufacturing departments must carry out strategic cooperation.

Spreadtrum needs to come up with mature design solutions for baseband chips and SOC chips.

Huaxin International, on the one hand, must integrate major wafer factories, increase production capacity, and improve product yields. On the other hand, it must upgrade advanced manufacturing processes to meet customer demand for high-end chips.

At the same time, Huaxin International also needs to grab Gulf Power's customers and digest its own wafer fab production capacity to offset the huge equipment depreciation caused by large-scale production increases.

Whoever is slow in the design and manufacturing departments will become the first domino to fall, causing the overall collapse.

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

Spreadtrum is also engaged in a price war with MediaTek at the moment, with basically no profit, and it is losing money to make money.

However, achieving chip self-sufficiency has huge benefits for reviving mobile phones. First, the core technology will not be left behind by the wisdom of self-developed SOC chips. Second, there is no need to worry about Samsung cutting off supply or other troubles in the future.

In short, the task is very arduous. Once successful, the rewards will be huge. The development of Spreadtrum and Huaxin International will at least move up to a higher level.

In comparison, the profits sacrificed by obeying the general direction strategy are somewhat insignificant.

Because it is far from time to revive semiconductors and make money, the top priority is to develop core chip design technologies, improve high-end process technology, and carve out a large market share.

Only when these are mastered will Fuxing Semiconductor be competitive, otherwise it will be impossible to fight a price war.

For example, Gulf Power has started manufacturing 28nm mobile phone chips, while Huaxin International is still working on 45nm technology. They are not at the same level, and there is no way to talk about price wars.

To sum up, it can be summarized in four words: "comprehensive development", and no subject can be deviated from.

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