Tech Giants: Starting from Bankrupt Companies

103: Chapter 103 The Wave of Cooperation Among the Six Major Defense GroupsSeptember 20th, Shenzhen, Xingchen Military Industry Headquarters.

This newly built industrial park, located on the Dapeng Peninsula, has become the focus of China’s military-industrial system over the past week. Six gray R&D buildings are arranged in a circular formation, with an administrative center in the middle, surrounded by towering walls and a rigorous security system.

At nine o’clock in the morning, the first delegation arrived.

Three black Coaster minibuses drove into the park. There were no markings on the vehicles, but the windows were made of dark bulletproof glass. After the vehicles came to a stop, the first person to step out was a man in his fifties, slightly stout, wearing black-rimmed glasses and a dark blue work jacket—the uniform of the Chengdu Aircraft Industry Group.

He was Deputy Chief Engineer Liu Zhenhua, the head of the materials team for the J-20 project. The team behind him consisted of twelve people, all with serious expressions, carrying thick document cases.

Wu Yi greeted them personally at the entrance. As they shook hands, Liu Zhenhua shook his hand vigorously: ”General Manager Wu, I’ve heard much about you. Those two materials of yours have put us in a very passive position.”

”How so, Chief Engineer Liu?” Wu Yi led them into the conference room.

”Our J-20B was supposed to be finalized by the end of the year,” Liu Zhenhua said as he sat down and opened his document case. ”The skin material used an improved stealth coating, with performance 5% better than the F-35’s, and we were quite satisfied. But then you released your product, and suddenly, our superiors said, ’Wait, take a look at the materials from Xinghuo.’ This waiting period has already lasted three months.”

There was no complaint in his tone, but rather an irrepressible excitement: ”But if our J-20B can use ’Shadow,’ the radar cross-section could be reduced by another 50%. Do you know what this means? It means that in aerial combat, our aircraft can detect the enemy before they detect us. Detecting the enemy first and attacking first—this is a decisive advantage.”

Wu Yi pulled up the technical data: ”We have already done a preliminary adaptation of the ’Shadow’ material for aircraft skin versions. But Chief Engineer Liu, the J-20 performs supersonic cruises, which causes surface aerodynamic heating...”

”200 degrees Celsius, sustained for one hour,” Liu Zhenhua recited the figures. ”Existing stealth materials deform slightly at this temperature, affecting stealth performance. Can you manage this?”

Wu Yi did not answer immediately. He operated the computer and pulled up a set of experimental data: ”We conducted high-temperature aging tests. At 220 degrees Celsius for 100 consecutive hours, the material’s performance retention rate was 98.7%. At 250 degrees Celsius, the retention rate was 94.2%. However, beyond 280 degrees Celsius, performance begins to drop sharply.”

Liu Zhenhua’s eyes lit up: ”The surface temperature of the J-20 during supersonic cruise will not exceed 220 degrees. That’s enough, perfectly enough.”

The young engineers behind him began to whisper, and some were already quickly calculating in their notebooks.

”Any other requirements?” Wu Yi asked.

”Consistency in mass production,” Liu Zhenhua said bluntly. ”In a laboratory, you can carefully craft a single piece. But the J-20B needs mass production, at least thirty aircraft per year. Each aircraft’s skin requires over three hundred material segments, and the performance deviation of each segment must be controlled within 3%. Can you do that?”

Wu Yi pulled up the production data: ”This is the Statistical Process Control (SPC) data from our first production line. For one thousand consecutive batches, the performance standard deviation is 1.8%. If we introduce stricter online inspection, it can be compressed to 1.2%.”

The conference room was quiet for a few seconds. Then Liu Zhenhua slapped the table and stood up: ”Sign it! Let’s sign it now!”

The contract had actually been prepared long ago. It was a procurement framework agreement worth 5 billion rmb, with a 30% advance payment. But Liu Zhenhua added a supplementary clause: ”If the material achieves the promised performance in actual installation tests, for the next five years, all of Chengdu Aircraft Industry Group’s stealth material procurement will be prioritized from Xinghuo. We want to sign a long-term strategic cooperation.”

Wu Yi’s hand trembled slightly as he signed. This was not just a simple business deal; it was a heavy trust—the trust in the most advanced fighter jet in China.

At 1:00 PM, just after the Chengdu Aircraft Industry Group delegation left, the second convoy arrived.

The Shenyang Aircraft Industry Group delegation of twelve people was led by Chen Jianguo, Director of the New Materials Research Institute. Unlike Liu Zhenhua from Chengdu Aircraft Industry Group, Chen Jianguo was tall and thin, and he spoke very quickly, like a machine gun.

”General Manager Wu, our requirements are more complex.” Chen Jianguo didn’t engage in small talk and spread out the blueprints directly. ”The J-15T, a carrier-based aircraft, needs to be resistant to salt spray corrosion. You know the environment of an aircraft carrier deck—high temperature, high humidity, and high salt. The existing coating needs to be repaired every three months, which affects the sortie rate.”

Wu Yi nodded: ”We have conducted salt spray tests. A standard one-thousand-hour salt spray test, equivalent to three years of service at sea, shows a performance retention rate of 97%.”

”Good!” Chen Jianguo continued, ”The J-16 is a heavy multi-role fighter. We need stealth, but we also need payload capacity—its maximum takeoff weight is 38 tons, twice that of the J-20. The stealth performance must not drop when the material is under huge loads.”

This was an even harder challenge. The microstructure of stealth materials deforms slightly under stress, affecting electromagnetic wave absorption characteristics.

Wu Yi pulled up the finite element analysis model: ”We have adopted an integrated structure-function design. There are tiny stress-buffering structures inside the material. When bearing loads, the material deforms preferentially at these buffering structures, protecting the stealth functional layer. Simulation results show that under maximum design load, the stealth performance degradation does not exceed 5%.”

Chen Jianguo stared at the data curve on the screen for a full three minutes.

”Joint R&D,” he said suddenly. ”We provide the application scenarios and testing platforms, and you provide the materials and processes. We will specifically develop ’stealth coatings for carrier-based aircraft’ and ’integrated structural stealth materials for heavy aircraft.’ We will provide the funding, and we will share the intellectual property.”

This proposal was very bold. Traditionally, military industrial groups rarely share technology deeply with private enterprises.

Wu Yi thought for a moment: ”That’s possible. But the scope of sharing must be clearly defined—the basic material formula is our core secret and cannot be shared. However, modification processes, test data, and usage specifications for specific applications can be shared.”

”Deal!” Chen Jianguo reached out his hand.

A small incident occurred during the signing. Liu Zhenhua returned—he had forgotten a document and happened to meet Chen Jianguo in the hallway.

The two pillars of China’s aviation industry looked at each other.

”Old Chen, your J-16 uses stealth materials too?” Liu Zhenhua spoke first.

”If your J-20 can use them, why can’t our J-16?” Chen Jianguo laughed. ”We are both part of the Chinese Air Force, what’s there to distinguish between high and low?”

Liu Zhenhua laughed too: ”That’s true. But Old Chen, do you need our help testing that carrier-based aircraft coating? We have a high-temperature and high-humidity test site in Hainan.”

”I couldn’t ask for better.” Chen Jianguo shook his old rival’s hand. ”Come to Shenyang another day, and I’ll treat you to Laobian dumplings.”

When the two shook hands, there was competition in their eyes, but even more of a tacit understanding like comrades-in-arms.

Over the next three days, the Xingchen Military Industry headquarters was as lively as a festival.

September 21st, the China Aerospace Science and Technology Corporation delegation. Their requirement was direct and grand: The ”Long March 9” heavy-lift launch vehicle’s airframe needed a 15% weight reduction. This would mean being able to send more payload into space or reach the same orbit with less fuel.

”Ultra-low temperature is the difficulty,” said the materials expert from China Aerospace Science and Technology Corporation. ”Liquid hydrogen temperature is minus 253 degrees Celsius. At this temperature, most materials become brittle.”

Wu Yi displayed a set of shocking data: Heavenly Bow carbon fiber, at liquid helium temperature (minus 269 degrees Celsius), not only did not see a decrease in tensile strength, but it actually increased by 3%.

”The microstructure of carbon fiber is more ordered at extremely low temperatures,” he explained. ”Just like frozen water, the molecules are arranged more neatly.”

Signing: An 8 billion rmb long-term supply contract. Additional clause—Xingchen Military Industry needs to set up a branch factory near the Jiuquan Satellite Launch Center to supply locally.

September 22nd, the China State Shipbuilding Corporation (the behemoth formed after the merger of the North and South Shipbuilding groups) delegation. The requirements were the most complex, covering almost all the main equipment of the Navy.

Submarine anechoic tiles—the material needs to maintain performance underwater for a long time and must be able to absorb the sound waves of active sonar.

Aircraft carrier arresting gear—requires extremely high strength and toughness, capable of slowing a 30-ton carrier-based aircraft from 240 kilometers per hour to zero within three seconds.

Destroyer superstructure stealth modification—requires materials that can withstand harsh marine environments and be easy to install.

Wu Yi prepared a complete solution. He showed a video: A steel plate coated with the underwater improved version of ”Shadow” had a performance retention rate of 98% after being soaked in a simulated seawater environment for thirty days; in sonar tests, the reflected sound wave intensity was reduced by 25 decibels.

”As for constructability,” Wu Yi said, ”we have developed a spray version and a coil version. The spray version is suitable for complex curved surfaces, while the coil version is suitable for large flat areas. On-site construction personnel can master it after three days of training.”

The leader of the Shipbuilding Corporation watched for half an hour and only said one sentence: ”The country needs such enterprises.”

Signing: A 12 billion rmb comprehensive agreement, covering fourteen sub-projects in three major categories.

September 23rd, the China North Industries Group and the China South Industries Group visited together. This was a collective procurement for the Army’s equipment system.

The background was that the Chinese Army was pushing for a ”lightweight, informationized, and stealthy” reform. The People’s Liberation Army Army, traditionally known for its ”iron torrent,” was transforming towards being more agile, intelligent, and stealthy.

The requirement list from China North Industries Group (responsible for main battle equipment):

Tank composite armor interlayer material—needs to reduce weight by 20% while maintaining protective capabilities.

Self-propelled artillery turret stealth coating—needs to balance anti-radar detection and infrared stealth.

Armed helicopter rotor material—needs high fatigue strength and must be able to reduce radar and infrared signals.

The requirements from China South Industries Group (responsible for individual soldier and light equipment) were closer to actual combat:

Individual exoskeleton carbon fiber brackets—needs to be light, strong, and cheap.

Light assault vehicle stealth cover—needs to be quickly detachable and adaptable to field environments.

Drone airframe material—needs to be light and have certain electromagnetic shielding capabilities.

”The biggest challenge is cost,” the procurement head of China North Industries Group said frankly. ”We have equipped 5,000 tanks, 20,000 armored vehicles, and 10,000 artillery pieces. If the stealth modification for each vehicle costs one million, that would be tens of billions. The Army cannot afford it.”

Wu Yi had long prepared the answer: ”Volume is the key. If the annual procurement volume reaches one thousand tons, the cost of carbon fiber can be reduced to 60% of the current import price. If it reaches five thousand tons, it can be reduced to 50%.”

He calculated the figures: ”The stealth modification for one 99A tank would cost about 200,000 in materials. The full stealth transformation of an armored brigade would cost about 300 million in materials. And the combat power increase of an armored brigade could be worth 3 billion.”

In the conference room, the generals discussed in low voices. Finally, the two groups signed a total of 15 billion rmb, to be paid in installments, linked to production capacity and actual equipment progress.

Four days, six major military industrial groups, a total of 43 billion rmb in orders.

When the signing ceremony ended, General Zhao from the Department of National Defense Equipment flew in specifically from the capital. Looking at the agreement texts hanging on the conference room wall, he said with emotion: ”General Manager Wu, you have created a new model.”

Wu Yi said modestly: ”We just did what we should have done.”

”No, this is not simple,” General Zhao shook his head. ”Traditionally, military industry is the domain of state-owned enterprises. It is difficult for private enterprises to enter due to issues of trust, confidentiality, and technical accumulation. But you have knocked open this door with solid products.”

He pointed to the agreement structure: ”On the R&D side, the Xingchen Academy of Sciences provides basic technology; on the materials side, the Spark Materials company is responsible for production; on the product side, Xingchen Military Industry does deep customization; on the procurement side, the major military industrial groups purchase directly. This model is good—private enterprises are flexible and innovative, state-owned military enterprises have deep accumulation, and the military puts forward needs. This is the military-civilian integration of the new era.”

Wu Yi added: ”We don’t make the whole machine; we act as the ’TSMC of the military industry’—providing the most core materials and processes. This not only leverages our advantages but also does not impact the existing military industrial system.”

General Zhao patted him on the shoulder: ”Keep up the good work. You are now an indispensable part of the national military industrial system.”

That night, Wu Yi called Su Chen to report. On the other end of the line, Su Chen was silent for a long time.

”Wu Yi, do you know what this means?” Su Chen asked.

”I know,” Wu Yi said. ”It means we have officially embedded ourselves into the national core supply chain. It also means... we have become a target for many people.”

”Security upgrades are already underway,” Su Chen said. ”But you personally need to be careful too. Reduce public activities recently, and you must be accompanied by security personnel when going out.”

”Understood.”

Hanging up the phone, Wu Yi walked to the office window. Outside the window, the Xingchen Military Industry park was brightly lit, and people in the laboratory were still working overtime. This park had only been built for three months, but it already carried the high hopes of the entire national military industrial system.

He remembered three years ago, when Su Chen found him and said, ”We want to build the top materials company in China.” At that time, he thought this young man was too arrogant. But now it seems, the one who was arrogant was not Su Chen, but those who thought China couldn’t do it.