Chapter 424 PK TSMC's Washington State Project and Why It's Absolutely Impossible?

"Dr. Li, why did you say this?" Academician Ni and Dr. Zhang asked strangely.

"Two seniors, you may not necessarily know that just a few days ago, 33 countries, mainly Western countries, signed the Wassenaar Agreement in Vienna, Austria, imposing strict export controls on military and high-tech products. We in the mainland are still subject to control..."

Li Xiaofan just saw this news on Yahoo's news section last night.

After the disintegration of the former Soviet Union, the original Batumi organization that imposed embargoes and trade restrictions on countries like mainland China was disbanded. But just a few days ago, 33 countries including the United States signed an alternative "Wassenaar Agreement."

If the new "Wassenaar Agreement" is followed, the export of semiconductor technology from Western countries to the mainland of China will generally be approved based on the "N-2" principle, which means that it is two generations later than the most advanced technology. Coupled with the considerable delay in approval, the technical equipment obtained in mainland China is usually 3 to 4 generations behind the state-of-the-art.

When Li Xiaofan said this, he was thinking of the experiences of Dr. Zhang in his previous life when he founded the SMIC project:

At that time, in order to avoid being embargoed and downplay the background of government support, Dr. Zhang deliberately dispersed his equity and established "SMIC" in the Cayman Islands as a platform to raise funds, and then invested and set up a factory in Shanghai as a pure foreign investor. Among the 16 shareholders who raised funds in the first round, only Shanghai Industrial and Peking University Jade Bird have mainland backgrounds. Most of the initial investment of US$1 billion came from foreign capital brought in by Dr. Zhang, while Dr. Zhang himself holds less than 1% of the shares.

But even so, SMIC still failed to escape the technical blockade of the "Wassenaar Agreement". By 2001, America's 0.13 micron technology had achieved mass production, while the most advanced domestic technology was only at the 0.35 micron level, which was three generations behind!

At that time, Dr. Zhang hoped to import 0.18 micron grade production line equipment from the United States, but was rejected by the United States.

Later, as a Christian, Dr. Zhang went to the United States to lobby and spent a lot of effort to find the five major churches in the United States to vouch for him. He also promised that SMIC's products would only be used for commercial purposes and would not be used in the military. purpose, and finally obtained the export license from the United States.

This last critical step narrowed the gap between mainland China's semiconductors and the most advanced international level to the first generation!

Now Li Xiaofan’s worry is that if the CIDM model discussed by Academician Ni and Dr. Zhang is followed, the original intention is very good. It will integrate domestic and foreign chip design and R&D enterprises such as Lianhai and Huawei led by Academician Ni, with chip manufacturing, chip packaging and testing. The chip industry chain is integrated together and adopts a co-construction and sharing model.

However, this model will definitely be technically blocked by the "Wassenaar Agreement"!

At the moment, because Dr. Zhang has not yet built a chip factory in mainland China, he may not fully understand the hardship and complexity involved.

Li Xiaofan then reported and explained his worries and what he learned about the "Wassenaar Agreement" to Academician Ni and Dr. Zhang in detail.

After listening, Dr. Zhang sighed and said:

"Director Li, when you say this, I probably understand. In the past, I only knew about the Batumi organization. I thought that after the dissolution of the former Soviet Union and Batumi, there would be no obstacles to investing in the mainland. I didn't expect that there would be such a Vassen." It’s such a headache to accept the agreement!”

Li Xiaofan said to Dr. Zhang and Academician Ni:

"So, two seniors, if Dr. Zhang is determined to start a chip factory now, I have a small suggestion: if the investment is similar to TSMC's WaferTech in Washington State, the world's most advanced 0.35 micron process wafers, For foundries, my suggestion is that the first chip factory should be moved to Singapore first to avoid the restrictions of the Wassenaar Agreement! I will be responsible for raising all the required investment of US$1 billion!”

Li Xiaofan is confident in saying this, because the name "Zhang Rujing" may be worth US$1 billion!

Since the 1960s, Chinese have emerged in the U.S. semiconductor industry, with talented engineers and outstanding entrepreneurs emerging continuously. Dr. Zhang’s immediate boss at Texas Instruments and his master, Dr. Shao Zifan, senior vice president of Texas Instruments, is the world’s top chip manufacturing factory construction expert.

Under the guidance and cultivation of Dr. Shao Zifan, who is also Chinese, Dr. Zhang grew rapidly and was responsible for participating in the construction of nine of the world's top large-scale chip factories in the United States, Japan, Singapore, Italy and other places. Currently, he replaces his master Dr. Shao Zifan. Become recognized in the industry as a "factory construction master" of the world's top chip projects.

As long as Dr. Zhang is willing to take action, Li Xiaofan believes that with his current net worth of more than 500 million U.S. dollars and Dr. Zhang's reputation, raising one billion U.S. dollars should not be a big problem.

In Li Xiaofan's mind, there are many benefits to putting Dr. Zhang's first chip project in Singapore for the time being:

The first is to avoid the "Wassenaar Agreement". The Lion City is the "little brother" of the United States. Setting up a factory in Singapore can purchase the world's most advanced semiconductor manufacturing equipment and directly access the world's most advanced 0.35 micron process, PKing TSMC's Washington State WaferTech project.

The second biggest benefit is that Dr. Zhang’s personal “intellectual property rights” such as patents and technologies can be completely retained.

In his previous life, after Dr. Zhang left TI, he went to Taiwan to found World Semiconductor. At that time, it was the third wafer foundry in Taiwan besides TSMC and UMC, engaged in DRAM chip foundry.

But soon, in order to compete with UMC, TSMC spent US$5 billion to acquire World Semiconductor without Dr. Zhang's knowledge. At that time, it was precisely because World Semiconductor was acquired by TSMC that all the semiconductor processes and technology patents and other "intellectual property rights" that Dr. Zhang designed for World Semiconductor were "acquired" by TSMC.

There are only a few companies producing semiconductor equipment in the world, and they are all similar. The biggest difference is their unique processes and technologies. In the previous life, because the World University of Science and Technology project was acquired by TSMC, hidden dangers were laid, which later led to SMIC's subsequent defeat in the "intellectual property rights" lawsuit...

The third is that in the future, the world's most advanced wafer foundry founded by Dr. Zhang will be able to manufacture for domestic semiconductor design companies such as Lianhai Microelectronics and Huawei, led by Academician Ni. Even some products with special domestic needs can be produced here. processing.

Moreover, the semiconductor projects he has invested in, such as Nvidia and OmniVision Technology, will be implemented next year and the year after next. If we start building the factory now, we will be able to take orders from Nvidia and OmniVision Technology in two years. The most important thing is that with his own investment in the wafer fab, Li Xiaofan can encourage companies such as Nvidia and OmniVision Technologies to bring part of their R&D and design to Singapore, and then slowly transfer it to the mainland. As the saying goes, the wealth does not flow to outsiders...

The fourth is that Singapore has very strong support for semiconductor projects and has a complete industrial chain. The semiconductor industry is one of the two pillar industries of Singapore's electronics industry. In order to support the semiconductor industry, the Singapore government has spent a lot of money.

Singapore has established a semiconductor industry development fund with a scale of hundreds of millions of dollars and a cluster development fund. The Singapore Economic Development Board (EDB) provides very thoughtful services to every foreign semiconductor company that comes to invest. We provide a series of complete assistance from planning and evaluation before investing in the factory, to obtaining water, electricity, and land during the construction of the factory, and even personnel recruitment and long-term financial planning after completion. It can be said that we try our best to provide the greatest assistance to foreign investors. .

Therefore, compared to other countries, Singapore can be said to be one of the most successful countries in the development of the semiconductor industry.

Currently, Singapore, in addition to the local Chartered Semiconductor Company, has introduced more than 50 foreign-invested semiconductor companies in chip design, wafer manufacturing, packaging and testing, as well as supporting supporting substrate materials, manufacturing equipment, photomasks, etc.

In 1980, Hewlett-Packard of the United States took the lead in bringing its chip design center to Singapore in the 1980s.

In 1985, SGS-Thompson became the first to establish a front-end chip production base in Singapore.

In 1987, HP established its first overseas chip manufacturing plant in Singapore.

In the same year, Singapore's Temasek Holdings invested and established Chartered Semiconductor Corporation.

In 1993, the Singapore TECH Semiconductor Project of DRAM Company, which was jointly invested by TI, HP and Canon and was headed by Dr. Zhang, was completed...

In its previous life, Singapore introduced more than 300 semiconductor projects at its peak. They come from North America, Europe, Japan and other regions, including more than 40 IC design companies, 14 silicon wafer fabs, 8 special wafer fabs, 20 packaging and testing companies...

Singapore currently has a complete set of industrial facilities, money and people are needed, and the government's response and business service environment are first-rate.

Therefore, Li Xiaofan estimates that the chip factory in Singapore will be completed and put into production faster than TSMC’s WaferTech project in Washington State.

The fifth and most critical point is that Li Xiaofan's vision is that the first chip factory invested in Singapore is a "training" work between himself and Dr. Zhang.

After the first chip factory invested in Singapore was completed and the chip factory that Dr. Zhang was responsible for building had its own intellectual property rights and talent reserves, he immediately launched a plan to build a second chip factory in mainland China!

After hearing this, Dr. Zhang said happily:

"Director Li, it would be great if you could be responsible for raising the funds to build the factory. It will solve my worries!"

Dr. Zhang highly trusts Li Xiaofan's words.

Because Li Xiaofan's name has appeared frequently in Wall Street financial media recently. Today, the successful listing of Pacific Network Technology Company, which he founded, and the Yahoo project he previously invested in have made his net worth close to US$600 million.

What's more, judging from the identities and backgrounds of the guests attending today's dinner, Dr. Zhang believes that Li Xiaofan's network resources are enough to support a plate of 1 billion US dollars.

Dr. Zhang took a sip of coffee and looked at Masayoshi Son and Jerry Yang of SoftBank Group who were chatting next to him, and suddenly asked Li Xiaofan a question:

"Director Li, if we want to avoid the Wassenaar Agreement, why don't we put the first chip project in Hong Kong, which is closer to the mainland?"

"Dr. Zhang, you absolutely must not!"

"Why not?" Academician Ni and Dr. Zhang asked in unison.

They all felt that Li Xiaofan's answer was strange.