197: Chapter 197 CIA's Frustration

CIA Langley Headquarters Briefing Room

2:00 PM, April 2nd, Eastern Time, Langley, Virginia.

CIA Headquarters, Office of Robert Keller, Director of the Technology Countermeasures Division.

Keller, 55, a former MIT professor specializing in semiconductor physics, was recruited into the CIA three years ago to oversee technical intelligence and countermeasures. At this moment, he was staring at the relationship diagram on the big screen, his expression grim.

The screen displayed a complex flow of funds: Morning Star Trading (Cayman) → NPE Company (Netherlands) → 8 billion Euros.

But what about the source of funds for Morning Star Trading?

Agent John Li, of Chinese descent, 30 years old, was responsible for tracking financial leads.

"Sir, we've traced the accounts of Morning Star Trading." John pulled up the data. "Those 8 billion Euros came from the 'Xingzhou Trust Fund' in Singapore. It's a family trust, and the settlor's information is confidential."

"Can you crack it?"

"We tried, but Singapore's financial secrecy laws are very strict. We were only able to find out that this trust fund was established in September 2015—almost at the same time as Morning Star Trading."

Keller frowned. "So, Su Chen used an offshore trust to wire money to an offshore company he controls, and then bought equipment?"

"Theoretically, yes. But..." John hesitated. "All transfers went through legitimate banks, taxes were paid, and they were properly reported. From a legal standpoint, this is a legitimate cross-border trade."

"Legitimate?" Keller raised his voice. "He used 8 billion Euros to buy a production line that should have been under embargo! Is that legitimate?"

"But when the equipment was declared for customs, it was listed as 'second-hand refurbished equipment,' and the technical specifications met export standards," John said, steeling himself. "The Netherlands government approved the export license. If we want to hold someone accountable, we should go after the Netherlands government, not the buyer."

Keller slumped into his chair.

He knew John was right. America's export control laws only apply to American companies and American technology. If European allies approve the export, America has no right to interfere.

"Then after NPE Company went bankrupt, where did the money go?" Keller asked. "8 billion Euros can't just disappear."

John switched the screen. "After NPE Company's bankruptcy liquidation, the assets were distributed as follows: 1.2 billion Euros to repay bank loans, 8 million Euros for employee severance pay, 120 million Euros for taxes... The remaining 6.6 billion Euros were distributed to shareholders according to the company's articles of association."

"Who are the shareholders?"

"Hans Vanderlin holds 51%. The other 49%... is another offshore company in the Cayman Islands, 'North Sea Investment'."

"Who is the actual controller of North Sea Investment?"

"We can't find out. It's nested layer by layer, ultimately pointing to a trust in the British Virgin Islands. We applied for judicial assistance, but the BVI refused, citing 'insufficient evidence'."

Keller closed his eyes.

He recalled three years ago, when Spark Technology was still a company on the verge of bankruptcy, the CIA's assessment report stated: "Another enterprise in China attempting to replicate the Silicon Valley model, with a success probability of less than 5%."

Three years later, this company's valuation exceeded a trillion, and it had broken through America's strictest technology blockade.

"What about the production line?" Keller asked finally. "Where is it now?"

"It has already arrived at Huizhou Port and is waiting for installation." John pulled up satellite photos. "Xinghuo Chip's Daya Bay base, the factory buildings are still under construction, but the equipment warehouse is already in use. Look at these containers—they were offloaded from the Zhonghai Pacific."

The photo zoomed in: At the Huizhou Port terminal, 120 standard containers were neatly arranged. Cranes were operating nearby, and workers were busy.

"We can't intercept it now," Keller muttered. "Once it enters Chinese territory, we lose all jurisdiction."

He picked up his coffee cup, wanting to take a sip, but his hand was shaking so badly that the coffee spilled onto the table.

"Sir?" John asked worriedly.

"I'm fine." Keller set the cup down and wiped the table with a paper towel. "Write the report. Conclusion: No clear evidence found of violating America's export control laws. Recommendation... recommend increasing pressure on European allies to prevent similar incidents from happening again."

He knew this recommendation was weak.

Europe had already been hurt by America's sanctions and was now leaning towards Spark Technology. Expecting them to cooperate with America's export controls? Difficult.

After John left, Keller sat alone in his office.

Outside the window was the quiet suburban scenery of Langley; the trees were budding, and spring had arrived.

But Keller felt a bone-chilling cold.

He had a premonition that in this technology war, America might lose.

Not losing because of technology—America was still in the lead. It was losing on strategy, losing due to the defection of allies, and losing because... that young man named Su Chen was too cunning.

3:00 PM, April 3rd, China Time, Daya Bay, Huizhou.

This place had already turned into a massive construction site. Within a ten-kilometer radius, tower cranes stood like a forest, trucks shuttled back and forth, and machines roared.

The Xinghuo Chip 14nm base, phase one of the project, was proceeding at full speed.

Li Wanqing, wearing a hard hat, stood on the roof of the temporary command center, observing the construction site with binoculars.

"General Manager Li, the 16nm production line has all arrived," the assistant reported. "120 containers, unpacking and inspection completed, equipment integrity is 100%."

"Installation progress?"

"The factory building is still under construction, and the equipment is temporarily stored in Warehouse No. 3. Once the factory is topped out in June, we can begin installation."

Li Wanqing nodded and walked down the stairs.

Warehouse No. 3 was a temporarily erected steel structure shed, covering an area the size of five football fields. Inside, it was brightly lit, and the temperature and humidity were strictly controlled.

Walking inside, a stunning scene unfolded before her eyes:

Hundreds of precision devices, covered with dust covers, were arranged in neat phalanxes. Each device was labeled: lithography machine, etching machine, ion implanter, chemical vapor deposition, physical vapor deposition, chemical mechanical polishing...

These were all the "mother machines" of chip manufacturing.

Li Wanqing walked up to a lithography machine and lifted a corner of the dust cover.

The metal casing reflected a cold light, with the ASML logo printed on it, but the model number had been sanded off.

"These devices..." she said softly, "are they really 'second-hand refurbished'?"

The Technical Director walked over and lowered his voice. "General Manager Li, I've checked. Although the equipment has an ASML architecture, the inside... many components have been replaced. The lenses, light sources, and control systems are all versions we developed ourselves."

"What do you mean?"

"It means," the Technical Director said with a complex look in his eyes, "someone bought the ASML equipment, stripped out the core components, replaced them with our own, and then reassembled it. The exterior is still ASML, but the core... is already Spark Technology."

Li Wanqing was stunned.

This kind of operation was unheard of.

"To be able to perform modifications to this extent, how much technical strength is required?" she asked.

"At least... no less than the original ASML factory," the Technical Director said. "And it was modified very cleverly; all interfaces are compatible, and the software is adapted. If we hadn't taken it apart to check, we wouldn't have discovered it at all."

Li Wanqing recalled what Su Chen had said three months ago: "I'll take care of the equipment; you just focus on building the factory."

So this was how he solved it.

"Keep this matter confidential," she said. "To the outside world, just say that we bought second-hand equipment and performed the upgrades and modifications ourselves."

"Understood."

Leaving the warehouse, Li Wanqing walked to the construction site.

China State Construction had sent a construction team of 6,000 people, working in three shifts, 24 hours a day without stopping. Banners hung on the site: "Strive for 180 days to build a world-class chip base."

The project manager reported: "General Manager Li, according to the current progress, the factory will be topped out at the end of June, equipment installation in July, debugging in September, and official mass production in October."

"Quality first, safety first," Li Wanqing emphasized. "This is a strategic project; there cannot be any mishaps."

"Don't worry, we've brought in the best team. These workers participated in the construction of the Bird's Nest; they are very experienced."

Li Wanqing looked at the busy construction site, a surge of pride rising in her heart.

This area was planned to build:

2 lines of 16nm chip production, with an annual output of 2 million 16nm wafers.

1 line of 14nm chip production, with an annual output of 1 million 14nm wafers.

What kind of concept was this?

A single 16nm wafer could be cut into:

100 high-end GPU chips

or 600 flagship mobile phone chips

or 5,000 small control chips

If 200,000 16nm wafers were all cut into flagship mobile phone chips, that would be 120 million chips.

And China's annual mobile phone sales were about 400 million units.

This meant that Spark Technology alone could meet the nation's demand for high-end mobile phone chips.

If you add in the 14nm production capacity...

"We are going to change the world," Li Wanqing said softly.

It was not an exaggeration; it was a fact.