Chapter 393 The Great Opportunity that Cannot Wait for Us and the Global Investment Master!

"Dr. Zhang, I would like to know who are the largest semiconductor companies in the world. Where does Texas Instruments rank?" Li Xiaofan asked. He would like to learn about the current global semiconductor industry pattern through Dr. Zhang Rujing.

Dr. Zhang Rujing replied: "It's embarrassing to say that, as the inventor of the world's first silicon transistor and integrated circuit IC, our Texas Instruments TI company's revenue last year was 7.8 billion US dollars, and it is currently only ranked seventh in the world. Bit."

"Oh, what companies are in front of you?" Li Xiaofan asked curiously.

"The number one spot currently is definitely Intel Corporation, which had revenue of US$13.1 billion last year. The second is Japan's NEC Semiconductor Company with US$11.3 billion, the third is Japan's Toshiba Semiconductor Company with US$10 billion, and the fourth is also Japan, Hitachi Semiconductor US$9.1 billion..."

After Dr. Zhang Rujing's introduction, Li Xiaofan was shocked. Among the top 20 semiconductor companies in the world last year, eight were Japanese semiconductor companies: NEC, Toshiba, Hitachi, Fujitsu, Mitsubishi, Panasonic, Sanyo and Sharp. The combined total revenue of these eight Japanese semiconductor companies reached US$50 billion last year, occupying the first place in the world's top 20!

Among the top 20 semiconductor companies in the world, the old imperial American company actually ranked second, with only 6 companies on the list: Intel, Motorola, Texas Instruments, IBM, Micron and National Semiconductor. The total revenue of these six American semiconductor companies was only US$38.5 billion last year, far behind Japan.

What surprised Li Xiaofan even more was that there were an astonishing three Korean companies in the top 20: Samsung Semiconductor ranked sixth in the world ahead of Texas Instruments with US$8.3 billion, and the other two were Hyundai Semiconductor and LG Semiconductor. The total revenue of these three Korean semiconductor companies last year was US$19 billion. The scale of the semiconductor industry in such a small Asian country is actually half that of the United States! It's really surprising.

The remaining three among the world's top 20 semiconductor companies are all European companies: Philips Semiconductors, STMicroelectronics and Siemens Semiconductors. The total revenue of the three established European semiconductor companies last year was only US$10.5 billion, far behind South Korea.

And not a single company from mainland China is on the list!

Li Xiaofan was thinking a lot as he took the Gartner consulting firm's last year's global semiconductor industry ranking list given to him by Dr. Zhang Rujing.

He began to understand why domestic high-level officials were so anxious to join Project 909!

Holding the ranking list of the world's top 20 semiconductor companies, Li Xiaofan curiously asked Dr. Zhang Rujing for advice: "Dr. Zhang, it stands to reason that silicon transistors and integrated circuits were first invented in the United States. Why are Japan's products now The semiconductor industry is so powerful that it has surpassed the United States, and how can a small country like South Korea suddenly emerge? "

Dr. Zhang explained with a smile:

"There is a saying in our semiconductor industry that Silicon Valley in the United States has completed the invention from 0 to 1, while Japan has completed the steps from 2 to 3. In the 1960s, Japanese companies mostly purchased American semiconductor patents and achieved high yields through and low production costs to enter the civilian market, the industry is relatively low-end. However, the emergence of dynamic random access memory DRAM products became an opportunity for Japan to catch up with the United States!”

“At that time, the world’s earliest 1K DRAM product was released by Intel Corporation of the United States in 1970. But by 1976, the Japanese government invested 32 billion yen to let Hitachi, NEC, Fujitsu, Mitsubishi, and Toyo Five major companies in Chicago have jointly raised 40 billion yen to establish a VLSI ultra-large-scale integrated circuit joint research and development body. During this period, Japan can be said to have used the power of the whole country to bring together various forces from industry, academia, and government to break through 64K and 128K. DRAM technology and achieved full localization of related semiconductor processes. Japan achieved a breakthrough in mass production in 1977, but American companies waited until 1979 to develop it. This not only allowed Japan to win the global share of the DRAM market in one fell swoop. It was also announced that Japan has entered the VLSI era ahead of the United States...

"At that time, Japan achieved an astonishingly high yield rate through the full industry chain model and no longer relied on Western upstream industries for Japanese semiconductors, which laid the most important industrial foundation for the golden decade of the 1980s. At this time, NEC, Hitachi, Toshiba and other Japanese companies Major large companies have also taken advantage of the trend and become a major player in the global semiconductor landscape. At the same time, a large number of Japanese manufacturing, chemical, and even shipbuilding and metallurgical companies have been attracted by the huge cake of DRAM and have joined the DRAM industry chain. Today, there are all kinds of strange semiconductor companies in Japan, which were basically influenced by DRAM back then. Established inspired by the storm..."

Li Xiaofan asked again: "What about these Korean semiconductor companies? How did they get up?"

Dr. Zhang Rujing explained: "When it comes to the history of the semiconductor industry in South Korea, we have to mention Samsung. As early as 1984, Samsung Electronics invested in a modern chip factory for mass production, but their technology was five years behind Japan at the time, and the international market for memory products plummeted. Samsung suffered huge losses on this project, but they did not give up the project. At this time, the South Korean government learned from Japan's model of the year. Led by the South Korean government's Electronics and Communications Research Institute, Samsung, LG, Hyundai and other Korean giants and six Korean universities jointly launched 4M DRAM was used for technical research. The project lasted for three years, and the R&D cost reached more than 100 million US dollars, of which the South Korean government undertook 57%. Subsequently, the South Korean government also vigorously implemented the "Semiconductor Industry Revitalization Plan", and the South Korean government invested a total of 350 million US dollars, which stimulated 2 billion US dollars of private investment and greatly promoted the development of the Korean semiconductor industry! "

"Under the persistence of the Koreans, Samsung, which had been struggling for many years, finally ushered in a turning point. In 1987, the United States launched an anti-dumping lawsuit against Japanese semiconductor companies, and Japan was forced to accept the export restriction agreement. Because of this impact, memory prices began to rise. The Samsung semiconductor project, which had been losing money for ten consecutive years, not only achieved profitability, but also began to lead Japan in technology. Four years ago in 1992, Samsung took the lead in launching the world's first 64M random access memory, and surpassed Japan's NEC company to become the world's largest random access memory manufacturer. Two years ago, it launched the world's first 256M random access memory. The rise of Samsung Semiconductor has not only strengthened itself, but also driven the development of the entire Korean semiconductor industry..."

Before the end of dinner, Dr. Zhang Rujing also told Li Xiaofan some current development trends of the semiconductor industry.

In the early days of semiconductors, a few American semiconductor giants such as Intel, IBM, and Texas Instruments took over the design and production of chips. They were so-called IDM integrated device manufacturing companies. These giants ran through the entire semiconductor industry chain, and start-ups could not get involved in the semiconductor industry at all.

But later this unified situation was ended by TSMC's Mr. Morris Chang. In 1987, after returning to Taiwan, former senior vice president of Texas Instruments, Morris Chang founded the world's first professional foundry company: Taiwan Semiconductor Manufacturing Company (TSMC) in the Hsinchu Science Park, and quickly developed into the leader of Taiwan's semiconductor industry.

TSMC, founded by Morris Chang, pioneered the definition of the foundry chip foundry industry, separating design and production, and opening up a living space for start-ups. From then on, chip design companies only need to do light-asset fabless design Fabless Design business, competing on talent, knowledge and market. And heavy asset production links such as wafer production and tape-out, which have huge investments, can be outsourced to foundry chip foundries such as TSMC.

Dr. Zhang Rujing's wish is to go to the mainland to create a foundry chip foundry similar to TSMC after early retirement in the future...

After listening to Dr. Zhang Rujing's detailed introduction, Li Xiaofan was full of thoughts. The chip and semiconductor industry is a large ecosystem. Although his personal strength is limited, he can still play a catalyst role at the right time. It is only 1996 now. There are still many opportunities for me in the future. Time waits for no one!

After saying goodbye to Dr. Zhang Rujing, everyone came to the Dallas Galaxy Hotel where they stayed. Li Xiaofan called Wang Shuqiang, the assistant of Academician Ni and the fellow student of Lao Pan, to inquire about the current situation of IC design companies in China.

Wang Shuqiang told Li Xiaofan on the phone that there are very few IC design companies in China at present, and their general level is not high.

In addition to the several research institutes under the former Fourth Ministry of Machine Building and the Ministry of Electronics Industry that have some design capabilities, and the Lianhai Microelectronics Design Center project currently led by Academician Ni, he currently has only two slightly larger companies engaged in integrated circuit IC design-related businesses. Shenzhen Xianke Electromechanical Integrated Circuit Design Company was established in Shenzhen in 1993. It designs integrated circuits for special electrical appliances and is not large in scale.

Another large-scale design company is Huawei Integrated Circuit Design Center, which was established in 1991 and is a wholly-owned subsidiary of Huawei.

Wang Shuqiang introduced that in 1988, Academician Ni went to Hong Kong to set up a research and development department. The following year, under his leadership, Lenovo independently developed five ASIC special integrated circuits and successfully applied them to Chinese cards and Chinese character laser printers, which established Lenovo's status in the industry.

Almost at the same time, Huawei also started the road of independent IC design and recruited two top students named Xu Wenwei and Gao Meisong.

The first thing Xu Wenwei did when he came to Huawei was to set up Huawei's integrated circuit design center and preside over the development of ASIC chips that can be used for user switches. Five years ago in 1991, Huawei's first ASIC with independent intellectual property rights was born, model SD502, and it was a successful tape-out.

Subsequently, Huawei successfully developed the second digital chip SD509, which was widely used in Huawei's new generation CC08 switches.

Wang Shuqiang introduced that Huawei established an internal central research department last year, and the basic research department is mainly responsible for the research and development of Huawei chips. At present, more than 30 chips have been successfully designed, the most complex one can accommodate more than 10 million transistors, and there are currently more than 100 chip design engineers.

Currently, Huawei is already the largest chip design company in China. Wang Shuqiang lamented that if Lenovo at that time continued to develop independent chips under the leadership of Academician Ni, it might have formed a good situation in which China's two major IC design companies, one in the south and one in the north, would develop and compete with each other.

When Wang Shuqiang reported these situations to Li Xiaofan, Li Xiaofan knew that the Shenzhen Xianke Mechanical and Electrical Integrated Circuit Design Company he was talking about was a customer of the semiconductor testing company where Li Xiaofan worked. Later, the company was renamed Shenzhen Guowei Electronics Co., Ltd. At the end of 2012, it completed the reorganization with the listed company Unisoc Guoxin Microelectronics Co., Ltd. and became a wholly-owned subsidiary of Unisoc Guoxin Microelectronics.

This Huawei integrated circuit design center was so good that it was renamed HiSilicon Semiconductor Co., Ltd. in 2004. In 2020, before his rebirth, HiSilicon Semiconductor's sales reached US$2.67 billion, entering the global semiconductor TOP10 list for the first time...

Thinking of this, Li Xiaofan smiled on the phone and said: "Shuqiang, you must have confidence in our current Lianhai Microelectronics Design Center project led by Academician Ni. I believe that our Lianhai project will not necessarily lose to Huawei in the near future!"

"Director Li, that's all I'm saying. Now under the leadership of Academician Ni, with the strong support of you and the Shanghai local government, I am full of confidence in the future of our Lianhai Microelectronics Design Center project!"

"Well, you must have confidence! Shuqiang, by the way, tell Academician Ni that I hope he can organize a group of you backbones to come to the United States as soon as possible to inspect the latest developments of American semiconductor giants in Silicon Valley and other places. Also, I want him to pay a visit Dr. Zhang Rujing from Texas Instruments, please have an in-depth communication..."

…

Early the next morning, Li Xiaofan and his party took a flight to Los Angeles.

After arriving in Los Angeles in the afternoon, they rushed to the town of Pasadena, where the California Institute of Technology is located, and met again with Bill Gross, founder of the IdeaLab entrepreneurial incubator, to discuss investing in the ICP Angel Entrepreneurship Fund launched by Bill Gross.

At the fund partner preparatory meeting in the afternoon, Li Xiaofan met the other four partners who were preparing to invest in the ICP Angel Venture Fund: Foundation Capital Venture Capital, Moore Capital Management, Dell Computer Corporation, Hikari Tsushin Japan Optical Communications International Waiting for the person in charge of the company.

What made Li Xiaofan most happy was that during the afternoon meeting, he met Louis Bacon, the founder of Moore Capital Management.

Louis Bacon’s uncle is Julian Robertson, the founder of Tiger Management, and his brother Zach Bacon later became the chief trader of Soros’ Quantum Fund. In its previous life, Moore Capital Management was one of the top 20 largest hedge funds in the world, with funds under management once reaching US$15 billion.

Louis Bacon was later recognized globally as one of the most legendary investment gurus.

In his previous life, what impressed Li Xiaofan the most was when Block.one, the issuer of the encrypted token EOS, raised tens of billions of dollars to build an encrypted asset exchange. Louis Bacon, Richard Li, Nomura and other seven major funds participated.

"Hi, Li, nice to meet you. The story of your successful investment in Yahoo has become a legend on our Wall Street..." Louis Bacon smiled very politely after taking Li Xiaofan's business card.