Chapter 121 - Burning Money
Since Chen Jing and Chen Jianguo's return timings coincided, both groups simply took the same flight back, saving Su Yuanshan from making two trips to the airport. This time, however, with so many people, Su Yuanshan rented a large bus and brought everyone straight from the airport.
After getting on the bus, Chen Jianguo and the others insisted on checking out their "new home," so Su Yuanshan had no choice but to take them on a detour to Yuanchip Technology Park.
Su Yuanshan glanced sideways at Chen Jianguo, who now seemed more composed but also slightly chubbier, and said with a laugh, "Senior Brother, why do I feel like you've gained some weight?"
"Really?" Chen Jianguo looked down at his stomach and gave a wry smile, "Damn, now that you mention it, I realize I have put on some weight."
Sitting in the front seat, Chen Jing laughed and added, "That's because we have so much good food on the island."
She pulled a cassette from her bag and popped it into the car's tape player, then waved two other tapes at Su Yuanshan, "Want these? New albums from Jimmy Lin and Chen Mingzhen."
"Just leave them in the car. I'll listen during my commutes."
Chen Jing nodded and placed the two tapes in the glove compartment.
The car soon filled with the sound of Jacky Cheung's music.
...
By the time they finished touring the Technology Park and returned downtown, it was already seven in the evening.
Su Yuanshan decided to hold a welcome banquet at the restaurant downstairs, inviting Qin Weimin and the others who had been waiting.
After dinner, Qin Weimin went off to arrange accommodation for Chen Jianguo, while Su Yuanshan followed Chen Jing back to her room.
"So?" Su Yuanshan couldn't wait to ask as he closed the door behind him.
"Can I at least wash my face first?" Chen Jing glared at him.
"Uh... wash, wash!
You can even shower if you want," Su Yuanshan said with a sheepish grin, then flopped down on the sofa.
It was already cold by now, thanks to the leap month that year.
Chen Jing took off her short jacket and, wearing only a long-sleeved sweater, went into the bathroom.
As she removed her light makeup and splashed water on her face, she spoke,
"Besides the contacts you already know — TI and AMD — UMC, IBM, NEC, Qualcomm, they all showed interest."
By interest, she meant they were interested in participating in Yuanchip EDA's spin-off and investment —
technically not fundraising, but purchasing shares that Yuanchip would sell.
Wiping her face with a towel, revealing her snow-white skin, Chen Jing walked out of the bathroom and smiled at Su Yuanshan.
"But Wall Street's big players are even more interested.
Some major investment banks caught wind of it and have been circling me nonstop."
"Hmph, dream on," Su Yuanshan pouted.
"What about Intel? Have you contacted them?"
"I did," Chen Jing said.
"But Intel is already preparing to give up on us — now the competitors are fighting hard for campus clients.
Fortunately, with our repeated forum events, internet promotions, and the continual emergence of design IPs based on Yuanchip EDA, they're struggling to catch up.
We only need one more disruptive change to completely crush the competition.
Got any more tricks up your sleeve?"
Su Yuanshan laughed helplessly,
"Sister, do you really think I'm some child prodigy?
I'm already spinning off EDA — what else could I possibly pull out?"
"Then it'll be pure commercial competition from now on.
But we still hold a massive lead," Chen Jing said.
"We've got at least sixty percent of the market locked down.
As long as they don't come out with some black technology, we'll stay ahead."
"Yeah. The real issue is... money," Su Yuanshan muttered, looking at Chen Jing.
"Wall Street will definitely put a valuation on us.
How much are they offering?"
"For EDA alone, it's not that high — about six billion dollars.
But for the entire Yuanchip Group — guess."
Chen Jing winked at him, dimples showing.
Su Yuanshan shook his head,
"I'm not guessing.
It's useless anyway.
Yuanchip isn't planning to go public — at least not yet."
Chen Jing shrugged.
Su Yuanshan sighed,
"Only six billion, huh..."
"If you want more, you'll have to go public and let the capital market decide," Chen Jing said.
"It's hard for mainland companies to list on Nasdaq, but we could do a backdoor listing in Hong Kong.
Half a year later, we could cash out shares.
We could even pre-sign subscription agreements — there are many ways to play."
"Half a year's enough?" Su Yuanshan asked in surprise.
"Yes, half a year is enough — you didn't know?"
"Why would I know these things?"
Su Yuanshan closed his eyes and leaned back on the sofa, resting his head on his briefcase, deep in thought.
Currently, he still had about five hundred million dollars on hand.
This money was supposed to cover this year's and next year's basic research and development costs.
But starting next year, he needed to prepare funds for a wafer fabrication plant.
The problem was that the semiconductor industry was just emerging from a downturn.
All the fabs were desperately expanding their production capacities, driving up costs alongside inflation.
Su Yuanshan quickly did some rough math:
to build one 8-inch, 0.5-micron production line plus testing and packaging facilities, he would need about a billion dollars.
And Su Yuanshan obviously couldn't settle for just one line —
he had to seize the opportunity and build at least three 0.5-micron lines!
You had to understand, 0.5 microns was something that could remain useful for ages —
perfect for manufacturing small chips and microcontrollers.
Besides that, he still needed to support CPU design, communications design, and to push forward with building R&D centers.
If selling EDA could only net thirty billion dollars, it was far from enough.
"Why not use a joint venture model when you build the fab?"
Seeing Su Yuanshan troubled, Chen Jing offered a suggestion.
"Even with joint ventures, it's not enough," Su Yuanshan said.
"From the year after next, I'll need at least five billion dollars in revenue.
Starting next year, our R&D investment must exceed five hundred million annually — and the investment has to double every year just to barely maintain our foothold."
Chen Jing threw a jacket over herself, watching Su Yuanshan's furrowed brow, and smiled.
"You make it sound like no other business will make money."
"Of course they'll make money — lots of money.
But expansion burns cash even faster," Su Yuanshan opened his eyes, forcing a smile.
"I still want to build R&D centers in Europe, Russia, the West, and even Japan..."
"You..."
Chen Jing sighed.
"You have way too much ambition.
No one builds global R&D centers in just three to five years."
"But even if we slow down the global R&D rollout, there's still a huge money pit waiting," Su Yuanshan said.
Just then, his large mobile phone rang.
He answered — it was Zheng Zhenchuan's somewhat despondent voice.
"Xiao Su."
Su Yuanshan was startled.
"Yes, Uncle Zheng? What's wrong?"
"The project has been approved in principle," Zheng Zhenchuan sighed.
"But the funding is too little."
He sighed again,
"Not to mention that Nikon and Canon invest four to five hundred million dollars a year.
Even ASML, a small player, invests two to three hundred million annually."
"And we barely scraped together less than a hundred million —
most of which is earmarked for the light source —
and even the 908 funds have already been spread thin."
Zheng Zhenchuan's voice was full of frustration,
"Mainly because central government finances are poor.
Unlike universities, we pure research units can't even get provincial subsidies."
Su Yuanshan understood immediately.
Last year, China's central government revenue was only 90 billion yuan — and they ran a deficit of 20 billion.
Meanwhile, local governments collected 220 billion yuan.
Such a massive gap was why the tax-sharing reform would soon be implemented.
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