People can never acquire wealth beyond their understanding.
Bitcoin was so cheap; in that era, how many people truly valued it?
If it weren't for Chen Pingjiang's tip, Wang Cong would never have thought of such a thing.
If the two were to never interact again, Chen Pingjiang revealing this news to Wang Cong and Qinfen would actually be somewhat detrimental to them.
Because Bitcoin fluctuated so many times over 10 years, few people could hold on until the very end.
Putting that aside, Chen Pingjiang quietly headed to the Peace Hotel the next day.
Through the matchmaking of relevant departments, he met two people he had long dreamed of seeing there.
Zhang Rujing, Liang Mengsong.
If you ask who has contributed the most to China's chips, you certainly cannot overlook Zhang Rujing and Liang Mengsong.
As for those who mention Chen Jin, Wang Yangyuan, Yan Xiaolang, Zou Shichang, or Xu Juyan, that's purely ironic.
Chen Jin was the mastermind behind the Hanxin fraud, suspected of embezzling state funds, while the latter four were the four-person review panel who single-handedly promoted Chen Jin.
It's important to note that none of the four members of the review panel were simple individuals: the dean of Peking University's Institute of Microelectronics, the dean of Zhejiang University's College of Information Engineering, an academician of the Chinese Academy of Sciences, and an academician of the Chinese Academy of Engineering.
A plot so audacious that novels wouldn't dare to write it, yet it existed in reality.
The moment Chen Pingjiang met the two elders, Zhang Rujing and Liang Mengsong, his excitement was inexpressible, with only one thought in his mind:
"Convince them to join the upcoming Huaxin Project, and the chips will definitely be made."
Elder Zhang and Elder Liang were sitting together, carefully savoring tea.
They were curious about Chen Pingjiang and also wanted to hear his ideas.
Speaking of Elder Zhang and Elder Liang, one must mention TSMC, Zhang Zhongmou, and even SMIC.
The life trajectories of both of them are inseparable from TSMC, Zhang Zhongmou, and SMIC.
Who is Zhang Zhongmou?
He's the one who clamored that even if the mainland poured 10 trillion into it, it still couldn't produce a high-end chip!
First, let's talk about TSMC.
2004 was the inaugural year of 90nm, a year when Pentium 4 adopted the 90nm process technology, further enhancing performance.
At that time, many manufacturers could achieve the 90nm process technology, such as Intel, Infineon, Texas Instruments, IBM, as well as UMC and TSMC.
Eight years later, in 2012, process technology advanced to 22nm.
At this point, many manufacturers worldwide, including Intel, UMC, MediaTek, GlobalFoundries, and Samsung, could still achieve 22nm semiconductor process technology.
But from 22nm onwards, it became a watershed.
When process technology entered 14nm, UMC (United Microelectronics Corp) stopped there.
Taiwan's UMC and TSMC were once hailed as the world's dual giants in chip manufacturing, with these two companies accounting for over 60% of the global chip manufacturing market.
UMC was even once the leader, but its process technology stalled at 14nm.
In 2017, as technology progressed to 10nm, Intel faltered at 10nm.
Intel's chip manufacturing process once led the world, with TSMC and Samsung trailing behind.
However, after the technology entered 10nm, Intel's 10nm chips could only be used in low-end models, and Intel's mainstream i5 and i7 processors were delayed due to yield issues.
In the 7nm domain, Intel has yet to make a breakthrough, and another major US chip foundry, GlobalFoundries, also failed at 7nm.
The US's own foundry leader, Intel, fell at 10nm, and GlobalFoundries at 7nm.
Entering the more challenging 5nm, only Samsung and TSMC remained.
Samsung's 14nm yield couldn't match TSMC's, its 10nm performance couldn't match TSMC's, and its 7nm R&D process couldn't match TSMC's.
Success can only be discussed when formal mass production and high yield are achieved.
Later, TSMC became the world's only foundry capable of mass-producing 5nm and even 3nm chips.
Turning back to China, SMIC is the only presentable semiconductor foundry.
SMIC's 14nm process chips are supplied to Huawei.
Even by 2023, only four companies in the world can manufacture 7nm chips: SMIC, TSMC, Samsung, and Intel.
How did SMIC rise?
That's right, Zhang Rujing was the founder, and Liang Mengsong was the standard-bearer.
However, both of them eventually left SMIC for various reasons.
In 1977, Elder Zhang joined the American semiconductor giant Texas Instruments.
At that time, he was just a junior engineer, while Zhang Zhongmou was a senior vice president.
These two were worlds apart in their positions, and no one could have imagined that years later they would become "arch-rivals," one founding the world's most powerful chip foundry in Taiwan, and the other helping the mainland lay the foundation for semiconductor manufacturing.
Because Texas Instruments abandoned the DRAM industry, Zhang Rujing chose early retirement, returned to Taiwan, found investment, and leveraged his network to establish World Peace Semiconductor.
This was 1997.
It is noteworthy that Zhang Zhongmou had already returned to Taiwan in 1985 to found TSMC.
In the year World Peace Semiconductor was founded, TSMC just happened to list on the New York Stock Exchange.
With the support of the Texas Instruments alumni association, World Peace Semiconductor possessed considerable technical strength.
In just three years, World Peace Semiconductor's foundry operations became profitable, a truly remarkable speed.
In 2000, TSMC acquired World Peace Semiconductor, founded by Zhang Rujing just three years prior, for a high price of $5 billion.
Zhang Rujing did not want to sell, but the shareholders all agreed, and he did not even appear during the final price negotiations.
At that time, Zhang Rujing had already decided to leave.
He had chosen early retirement from Texas Instruments to continue his semiconductor dreams elsewhere.
Although World Peace Semiconductor in Taiwan developed impressively in just three years, TSMC and UMC always stood as two formidable mountains blocking the path in the semiconductor industry.
After TSMC's acquisition was completed, Zhang Rujing repeatedly proposed to Zhang Zhongmou to develop in mainland China, but Zhang Zhongmou consistently disagreed.
Nevertheless, Zhang Rujing was determined.
He sold his TSMC shares, crossed the Taiwan Strait, and came to the mainland.
The then deputy director of Shanghai's Foreign Economic Relations and Trade Commission was an old acquaintance of Zhang Rujing.
During his inspection tour in Shanghai, all the leaders were present, and a group of officials, big and small, accompanied Zhang Rujing to Zhangjiang to select land.
He could choose any plot, and it would be confirmed on the spot.
In April 2004, SMIC was registered.
In May, Zhang Rujing led a team of hundreds of engineers and technicians to Shanghai.
By August, ground was broken, marking the fastest chip factory construction record in the world.
The initial list of investors included Shanghai Industrial, Peking University Founder, Goldman Sachs, and Singapore's Temasek.
Under Zhang Rujing's efforts, SMIC expanded rapidly.
SMIC built three 8-inch chip factories in Shanghai in one go, two 12-inch chip factories in Beijing, and then acquired Motorola's 8-inch chip factory.
You couldn't find a more aggressive investment.
A single 8-inch chip production line cost hundreds of millions of dollars, and a 12-inch line cost a billion dollars.
The results of such massive capital expansion naturally propelled SMIC quickly into the top three in terms of production capacity.
Faced with such an impact, TSMC also grew anxious.
They applied pressure to Zhang Rujing through other channels, first with fines, and then even with a warrant for his arrest!
Meanwhile, due to the division into several factions, internal disagreements within the company grew.
Foreign investors believed Zhang Rujing was expanding blindly; from its founding in 2000 to 2009, nearly ten years, SMIC was not profitable for a single year.
Faced with pressure, Zhang Rujing explained: shareholders only saw SMIC's poor performance but didn't understand that other competitors had a 20-year head start.
SMIC was using its consecutive annual losses to drive the rapid upgrading of China's entire semiconductor industry.
This is precisely why Chen Pingjiang was unwilling to introduce capital!
In subsequent financing, Zhang Rujing chose a state-owned enterprise, Datang Telecom.
In November 2008, state-owned Datang Telecom invested in SMIC, becoming its largest shareholder.
The good times didn't last long.
In 2009, TSMC sued SMIC for infringement.
SMIC lost the lawsuit and was ordered to pay TSMC $1 billion in compensation.
SMIC didn't have that much money and sought a settlement with TSMC.
TSMC's first condition for agreeing to a settlement was that Zhang Rujing must resign and leave SMIC.
If Zhang Rujing remained in charge of SMIC, a settlement would be impossible.
This is not difficult to understand.
In TSMC's eyes, Zhang Rujing might truly have been a thorn in their side.
He and his team spent ten years helping the mainland establish its own semiconductor foundry foundation.
Although there was still a considerable gap with TSMC, as long as the development momentum remained, they would one day be able to challenge TSMC.
Ultimately, Zhang Rujing voluntarily chose to resign, bidding farewell to a decade-long stage.
The reason Zhang Rujing could be persuaded to come out of retirement this time was also due to significant efforts by the Shanghai municipal government.
They learned from higher-ups that Chen Pingjiang wanted to build a wafer fab and eagerly hoped that Chen Pingjiang would locate the factory in Shanghai.
Chen Pingjiang needed people, and they brought Zhang Rujing out of retirement.
Chen Pingjiang needed land, and the Shanghai government said,
"Here's the map, circle any empty land you want."
That's how Chen Pingjiang was able to meet Elder Zhang at the Peace Hotel.
If Elder Zhang was the pioneer of SMIC, then Elder Liang was the future founder of SMIC.
Coincidentally, at this point in time, Elder Meng had already left TSMC but had not yet gone to Samsung.
Liang Mengsong was forced out of TSMC by its workplace environment.
His greatest dream in life was to defeat TSMC.
Elder Liang's brilliance lies in the fact that after joining SMIC, he was responsible for technical breakthroughs.
In just 300 days, he successfully overcame the 14nm technical challenges that had long plagued SMIC, pushing the company's technical level to new heights.
This outstanding technical expert, however, only had an annual salary of $1.5 million, and it is said that he donated all of this money to an education fund to cultivate China's chip talent.
Unfortunately, in 2020, conflicts escalated between Elder Liang and Jiang Shangyi, who was about to join the company as vice chairman.
Liang Mengsong wrote a letter of resignation to the board, stating that his relationship with Jiang Shangyi could only be "either him or me, not both."
Fortunately, he didn't end up leaving!
The conflict between the two had existed since their time at TSMC; both were key figures at TSMC.
Liang Mengsong excelled in technical R&D, while Jiang Shangyi excelled in management.
Because Jiang Shangyi did not support Liang Mengsong at a critical moment, leading him to lose a promotion opportunity, Liang Mengsong felt extreme humiliation and disappointment.
It was precisely because of Jiang Shangyi that Liang Mengsong resigned from TSMC, then went to Samsung, helping Samsung achieve leapfrog development.
After discovering that Liang Mengsong had gone to Samsung, Zhang Zhongmou sued Liang Mengsong for leaking company secrets and forced him to leave Samsung.
Subsequently, Elder Liang went to SMIC.
However, TSMC, due to the previous infringement lawsuit settlement, also obtained equity in SMIC and immediately sent Elder Liang's arch-rival to serve as vice chairman, aiming to disgust Elder Liang and force him out.
From Chen Pingjiang's perspective, it was ridiculous that SMIC's biggest problem was that its arch-rival competitor was actually a major shareholder of the company—an indescribable absurdity.
Oh, and also!
According to SMIC's prospectus in 2020, Liang Mengsong, as a director and CEO, actually held no equity!
Liang Mengsong had no equity, while other directors all had equity; he was purely an employee.
Of course, although SMIC later gave him stock options, three years had already passed since Elder Liang joined, and at this time, his arch-rival Jiang Shangyi also arrived.
Even more amusing, other executive directors' salaries + equity amounted to hundreds of millions, and even independent directors had stock options; Liang Mengsong not only had no equity but also received a pay cut in 2019 compared to 2018.
It was truly bullying him.
When Chen Pingjiang read the reports on this matter back then, he also felt injustice for the elder.
Elder Liang's annual salary in his first year after joining SMIC was only $200,000 after tax.
Can you imagine that?
An annual salary of $200,000 isn't even enough to hire a senior vice president, let alone such a technical powerhouse!
This indirectly reflects that Elder Liang truly didn't come to SMIC for money; he even donated that $200,000 in the end.
SMIC truly did not deserve such talent; even Samsung showed more respect.
According to Liang Mengsong's "Letter to the Board of Directors" circulating online, Liang Mengsong offered his conditional resignation because:
"On December 9th, last Wednesday morning, I received a call from the Chairman informing me that Mr. Jiang would be taking on the role of Vice Chairman. I was extremely shocked and confused by this, as I had no prior knowledge of the matter. I deeply feel that I am no longer respected or trusted. I believe you no longer need me here to continue striving for the company's future. I can rest for a while with peace of mind."
Fortunately, after a series of internal clashes within SMIC, Liang Mengsong remained, and Jiang Shangyi left.
Chen Pingjiang smiled with relief upon seeing the two elders.
Elder Zhang was born in '48, Elder Liang in '52.
This year, one is 63, the other 59, but both look very energetic.
At the same time, Elder Zhang and Elder Liang were also curiously observing Chen Pingjiang.
Although they were currently unemployed, both still felt a natural mission for chip manufacturing.
"Elder Zhang, Elder Liang, I'm very happy to see you,"
Chen Pingjiang said with a smile as he walked to the table and sat down.
Elder Zhang also smiled,
"I was just telling Elder Liang that I often see news about you. I truly didn't expect you also wanted to build a wafer fab. I was surprised when our old friend found me."
Elder Liang nodded,
"Mr. Chen looks so young! Indeed, the country always produces new talents. Seeing you makes me feel truly old; my son is nearly ten years older than you, you know."
"Haha, perhaps youth is my advantage. It's precisely because I'm young that I want to push forward and fulfill my dream of chip manufacturing."
Chen Pingjiang saw that there wasn't much tea left in their cups and stood up to pour water for them.
Elder Zhang and Elder Liang were also startled, quickly waving their hands.
After pouring the water, Chen Pingjiang asked Liang Mengsong,
"Elder Liang, I heard you originally planned to go to Samsung, but you were eventually persuaded to come and take a look?"
"Yes, I wanted to see you, and also your ambition."
At this point, Elder Zhang, who was beside them, began to get to the main topic:
"I heard from Lao Jiang and also learned about the state's ongoing support for the chip industry. Other wafer fabs require massive capital injections from multiple capital groups to bear the astronomical costs. Why do you want to do it alone? Have you truly considered the difficulties involved?"
It's no wonder the two elders were concerned; it was precisely because they were so familiar with the chip manufacturing industry that they knew how difficult it would be to do it relying solely on one's own strength.
Chen Pingjiang nodded and said,
"I've thought about it for years. I started the internet business just to make money quickly, and the ultimate goal of making money is to build a wafer fab and defeat TSMC. For this, I am willing to lose everything."
Hearing this, the two elders' eyes lit up.
The enemy of my enemy is my friend! Their interests were aligned, which was very important.
"I have looked into the difficulties of investing in and building a wafer fab. Funding is an issue, but not the biggest one. I can cash out my shares in Renren Network Group and sell shares in other companies. The reason for not involving capital is that capital is inherently profit-seeking and will create internal constraints. I presume you also know the reasons for not involving state-owned enterprises."
Upon hearing this, Zhang Rujing and Liang Mengsong exchanged knowing smiles.
They certainly knew.
Previously, Huahong, with its state-owned background, planned to build a 12-inch factory, but years passed, and the US blocked the technology and equipment from being shipped, preventing the factory from being built.
Only Chen Pingjiang's investment in a private capacity had the highest chance of success.
Moreover, it must be registered overseas.
Western countries are wary of China developing high technology on its own and impose N-2 technology blockades on China.
Therefore, it's only possible to register in the Cayman Islands and invest in the mainland under the name of foreign capital, which allows for more flexible joint ventures, equity participation, restructuring, mergers, and so on.
SMIC did exactly this back then.
Similarly, the upcoming Huaxin International will be a foreign-invested enterprise in China, rather than a Chinese state-owned enterprise that would be sensitive to Western countries.
This is more conducive to the flow of capital, technology, equipment, and personnel into Huaxin.
Elder Zhang sighed,
"Mr. Chen, please don't think I'm asking too many questions. We are not unaware of your capabilities, but we hope you can see sufficient difficulties and make adequate preparations. No one wants to give up halfway, and we are old. If we fail this time, we may not have another chance to defeat TSMC."
Chen Pingjiang smiled,
"I deeply understand the feelings of you two elders. In fact, the year before last, I recruited many former employees of Texas Instruments and VIA Technologies through various channels, and they are now all working at my Daqin Chip Design Company."
"I know that building a wafer fab requires not only funds but also talent, equipment, and a supply chain. I have considered all the potential issues, such as insufficient funds, project stagnation, low yield, inability to develop high-end chips, and inability to acquire lithography machines."
(End of Chapter)