330: Chapter 330 Huayu Special Gas Pioneer Wafer

"CEO Chu, after extensive contact by the company, there are two companies that meet our requirements and are willing to accept our conditions."

Wang Shijie pointed to the highlighted key information on the document and continued: "One is 'Huayu Special Gas', headquartered in Jin City, which has been deeply involved in the field of special gases for many years. Its main products include photoresist-supporting gases, ion implantation gases, and so on."

"Among them, the high-purity fluoride gas used for the 130nm process has reached a purity of 99.999%, which can meet industry demands. In China, this is already considered to be in the advanced ranks."

"However, a few years ago, they refused to let a foreign company take a stake, offending Bain Capital. As a result, domestic Chip manufacturers with ties to foreign capital will not purchase special gases from them."

"Because of poor sales, the company is in financial difficulty. Now the founder is willing to introduce strategic investors, but does not want to give up management rights. By investing in this company, we can not only develop production processes for 65nm special gases but also resolve the need for special gases for our 180nm production line."

Chu Qianlan's gaze lingered on the words "99.999% purity" and "refused foreign investment." He looked up and asked: "What is the size of their current R&D team? Do they have any technical reserves for 65nm process special gases?"

Wang Shijie was well-prepared and turned to the supplementary attachment: "The R&D team has 28 people, with core members mostly coming from top domestic chemical engineering universities. Over the past three years, they have applied for 11 patents in the field of special gas purification."

"Although they currently focus on 130nm process products, they started pre-research on 90nm high-purity gases last year. Some of this technology can be used for 65nm special gas production, but due to limited funds, the experimental progress is slow."

"What are the specific figures regarding their financial difficulties?" Chu Qianlan pressed, needing to confirm whether Huayu Special Gas's predicament was within a controllable range.

"Last year's revenue was 120 million, with a net profit of only 8 million, mainly because their customer base is restricted and capacity utilization is less than 40%." Wang Shijie paused for a moment before adding: "Their product quality is good. After we invest, Deep Blue Semiconductor's 180nm production line can prioritize purchasing their gases, which would help them revitalize their production capacity."

Chu Qianlan nodded slightly and pointed to another document: "And what about the other company that meets the requirements? What is its situation?"

Wang Shijie introduced: "Xianfeng Wafer is headquartered in Shenzhen and focuses on blank wafer manufacturing. It has two mature 6-inch production lines with a monthly capacity of 80,000 wafers and a yield rate stable at around 93%."

"Their blank wafers have a process level that can only be used to manufacture Chips with processes greater than 90nm. Their clients are concentrated in the consumer electronics and industrial control sectors. However, due to the industry price war in recent years, their gross profit margin has dropped from 18% to 12%."

Wang Shijie traced his finger over the financial data in the document and continued: "Last year, through connections, the founder imported an 8-inch production line from the Eagle Nation. Although the equipment has arrived, it seems there is some problem, and no products have been launched."

"If we invest in this company, as long as we can break through to the next process level, the blank wafers they produce can be used for 45nm process Chips."

Chu Qianlan raised an eyebrow: "What exactly is the problem with the equipment? Is it a technical debugging failure, or are key parts missing?"

A second-hand 8-inch production line costs at least 1 billion. If it was bought back and cannot be used for production, it is definitely a major problem. If Xianfeng Wafer cannot resolve it, even if the company doesn't collapse, it will definitely be severely damaged.

In this situation, whoever wants to invest in Xianfeng Wafer must choose carefully.

Wang Shijie looked grave: "I asked someone to inquire with employees at Xianfeng Wafer, and it is indeed a problem with the equipment. They spent 2.5 billion this time to purchase a fully automated silicon wafer production line from the Eagle Nation. Only during debugging did they discover that the most important 'single crystal growth furnace' had no control program."

"Furthermore, the equipment manufacturer did not fulfill the promise to provide the accompanying production technology. Lacking these two core elements, the new equipment naturally cannot be operated."

"There is also a piece of news, the veracity of which is unknown, that the purchase of equipment by Xianfeng Wafer this time was done through Intel's connections, and the equipment manufacturer is also associated with Intel. A few months ago, Intel tried to buy a stake in Xianfeng Wafer, with the condition being that they would solve the equipment problem, but the two sides failed to reach an agreement."

Chu Qianlan sneered upon hearing this. Undoubtedly, Xianfeng Wafer's purchase of this equipment was a setup by Intel. The 8-inch silicon wafer production line is currently still a high-end restricted product; without strong corporate backing, it could not have entered the Dragon Kingdom at all.

"Intel let Xianfeng Wafer purchase the equipment first, exhausting the company's working capital, and then threatened Xianfeng Wafer with this to achieve the goal of acquiring a stake at a low cost."

Regardless of the outcome, Xianfeng Wafer is bound to suffer a huge loss. If they agree to the investment, their own interests will definitely be damaged, and they might even lose control of the company. If they do not agree, the 2.5 billion worth of equipment cannot operate, and even if the company can maintain its expenses, it will likely take many years to recover its vitality.

Chu Qianlan tapped his fingers lightly on the desktop. His gaze fell on the information regarding "Intel's setup," and his tone carried a hint of coldness: "Intel's move is quite ruthless. Giving a sweet treat first and then setting a trap—they calculated that Xianfeng Wafer desperately needed an 8-inch production line breakthrough, which is why they dared to manipulate them so unscrupulously."

He understood clearly that given Xianfeng Wafer's current predicament, they either had to compromise with Intel and give up control, or resell the idle equipment at a low price. Both outcomes would ultimately allow Intel to gain significant benefits.

Chu Qianlan's fingertips tapped lightly on the document, his gaze cold: "Intel has mastered these sugar-coated tactics! Giving a sweet treat first and then creating a dead end—they clearly intend to swallow up Xianfeng Wafer at a low price."

However, this was not necessarily a bad thing for Deep Blue Semiconductor. Chu Qianlan was currently preparing to research silicon wafer production processes, and he had a clear direction.

As for the control program of the single crystal growth furnace, he didn't care about that at all. Hengchuan Machinery should have the capability to re-program it, and if that failed, he could always let Nuwa System handle it.

Wang Shijie nodded in agreement: "Xianfeng Wafer was indeed careless. However, judging from the current situation, their founder has not compromised, preferring to carry the debt rather than let Intel hold a controlling stake."

"If we invest in Xianfeng Wafer now, it would be like providing help in a time of need, and I assume the founder will not refuse. Moreover, this is also beneficial for us."

"They lack the production process and cannot start the production line, but we can completely use their equipment to directly research our own technology."

Chu Qianlan nodded upon hearing this; their thoughts were basically the same. However, there was one more thing to consider before the financing.

"What are the asset valuations of these two companies? Is there any foreign capital involved?"