198: Chapter 198 Are you ready?

"CEO Chen, our land application has been approved."

Just after the CCTV interview crew left, Lu Weiqi brought some good news.

At the beginning of this year, Red Star submitted a land use application to build an automated factory. The Beijing municipal government approved it very readily, directly granting several hundred acres of industrial land.

However, another application submitted subsequently was delayed in receiving an official approval result.

Every time we asked, they would always fob us off with the excuse that it required industrial coordination.

Chen Chen didn't know if the government really needed to coordinate or if they were deliberately stalling, but it had dragged on for over half a year with no results.

Why was it suddenly approved?

"The municipal government notified me this afternoon that our land permit has been approved."

"It's just that we might need to wait a while before we can start construction."

"Wait a while?" Chen Chen asked, puzzled after hearing Lu Weiqi's words, "What's the reason? Since it's been zoned as industrial land, why do we still need to wait?"

"Exactly."

"The situation is a bit complicated right now. The land has been allocated to us, but the residents on it haven't relocated yet."

"The two nearby villages haven't started demolition yet."

Chen Chen was speechless. He asked the government to find him a plot of land, and this is what they came up with?

They hadn't even cleared the villages on it.

Could it be that they want Red Star to handle the demolition?

If that were the case, this land would be a huge loss.

"Does the government want us to handle the demolition and resettlement?"

"No, no, no, the government is responsible for the demolition."

"Red Star doesn't need to handle it; we just need to take the ready-to-use land," Lu Weiqi said.

"Old Lu, can you finish your sentences in one go?"

"You made it sound like Red Star had to step in for the demolition and resettlement," Chen Chen said to Lu Weiqi, sounding annoyed.

Lu Weiqi curled his lip. When it comes to dramatic pauses in speech, who can compare to you, CEO Chen?

At the Full-Screen Display launch event, you had the audience and other manufacturers running in circles.

One moment you said it was a concept phone, and the next, you pulled out a real device.

You said mass production was so difficult and impossible, but then you priced it directly at 6999.

If Lei Jun had a heart condition, he would have been scared to death by your dramatic pauses.

"Why is the municipal government suddenly so easy to talk to?" The more Chen Chen thought about it, the more suspicious it felt.

"Whatever. Since the government is responsible, we can prepare to start the first phase of the project and strive to complete it and begin production by 2018."

"No other requirements?" Chen Chen continued to ask.

"None, though there is one bizarre requirement." Lu Weiqi thought for a moment. Today's exchange with the municipal government leaders was just a brief discussion; the specific details would need to be finalized in follow-up meetings.

"The Beijing municipal government stated that the first phase of this project will be invested in by the SASAC, with a total investment of no less than 10 billion rmb, including the funds for land use."

"The Beijing SASAC requires a shareholding of no less than 25%."

Holy cow, is the SASAC bleeding money?

The shareholding requirement is a bit high, which Chen Chen can understand, as the entire project requires government effort to push forward.

But this is 10 billion in real cash!

Chen Chen did some quick calculations. The total investment for the first phase of the entire project would be about 2 billion-plus, mainly for building the factory.

Subsequent investments would mainly be in equipment. As for R&D costs?

With a cheater like Chen Chen, there really aren't any R&D costs this time.

He just needs to master the technology, follow the blueprints, and achieve the required technical level for the design.

"Could it be that the government has someone inside Red Star?"

Chen Chen couldn't help but be suspicious. At the beginning of the year, the strategic goal of developing semiconductor technology was set, followed by a series of investigations into Su-Silicon and Hu-Silicon.

The ideal was plump, but the reality was cruel. With Red Star entering the market rashly without government endorsement, others wouldn't play with them.

When they went to Hu-Silicon for an investigation, the person in charge asked how much Red Star could invest in the early stages, whether it was 20 billion rmb, which completely stumped Aunt Zhou.

With Red Star's offline expansion, R&D investment, and automated factory investment, where would they get 20 billion in the account?

In the end, the investment in Hu-Silicon just fizzled out.

After returning, Chen Chen decided to start with the most mature 8-inch process, accumulate some experience, and then gradually move towards 12 inches.

Unexpectedly, the release of the Full-Screen Display phone allowed the system to directly provide 18-inch technology. Chen Chen only changed his mind a few days ago; since there were no R&D costs, he decided to go all the way to the end in one step.

He would go with 18 inches. Even if the cycle was a bit longer, looking at Red Star's current revenue, they could afford it.

It was only September, and Red Star's overall revenue had already exceeded last year's total revenue by 50%. Optimistically, the total revenue for 2014 could reach around 200 billion. One had to know that Red Star still had two major annual flagship models that hadn't been released yet.

This was also why Chen Chen suspected that the authorities had someone inside Red Star.

Otherwise, the Beijing SASAC wouldn't have invested with the exact funds Red Star was most lacking, and the land approval wouldn't have been so swift, happening exactly the day after he decided to launch the 18-inch project.

Lu Weiqi thought that the government investing 10 billion for a 25% stake was Red Star taking advantage, but Chen Chen didn't see it that way.

Let alone 10 billion, even at 20 billion or 30 billion for a 25% stake, the government would be the one making a huge profit.

18-inch wafer technology + production process, the only one in the world.

"By the way, CEO Chen, the higher-ups asked me to pass a message to you."

Lu Weiqi suddenly remembered that when he was leaving, Secretary Wang Shuo pulled him aside and said with a complex expression, "CEO Lu, go back and pass a message to your CEO Chen, and tell him it's from the higher-ups."

"What message?" Chen Chen was even more curious. There had been a few too many unusual things happening lately.

Could it be that some child pointed at Red Star and said, "Grandpa, I want this"?

Chen Chen was shocked. He couldn't rule out this possibility, and his hair immediately stood on end.

In that instant, all sorts of thoughts flashed through Chen Chen's mind, and he even considered the possibility of retreating to Africa.

Lu Weiqi, on the other hand, took a sip of water and said unhurriedly: "The higher-ups said, 'Are you ready?'"

"Just that?"

"Just that!"

It was a confusing sentence. Chen Chen was completely baffled as to who said it to him and what it meant.

Ready for what?

Lu Weiqi felt that he was increasingly unable to see through his own boss; not a single direction was wrong, with a continuous stream of new technologies and new ideas.

Now, there was even someone official involved. Didn't he hear Secretary Wang say it was a message from the higher-ups?

Lu Weiqi didn't know how high up "the higher-ups" were, but he only knew that Red Star was likely about to enter a special period where challenges and opportunities coexisted.