Tech Giants: Starting from Bankrupt Companies

110: Chapter 110 A Breakthrough Journey in EuropeTime returns to October 30th, Munich, Germany, at the Infineon headquarters building.

Lin Wan stood in the corridor outside the conference room, looking at the cityscape of this Bavarian capital through the floor-to-ceiling windows.

Munich in late autumn was beautiful; ancient churches and modern glass-curtain-wall buildings complemented each other, trams chimed as they passed by on the streets, and the air was cold and clean.

But she was in no mood to enjoy the scenery.

In the past seventy-two hours, she had slept for less than ten hours.

The negotiations had entered the most critical stage, and every word could influence the direction of the entire cooperation.

”President Lin, they have arrived,” the assistant whispered a reminder.

Lin Wan smoothed out her dark gray suit skirt, took a deep breath, and turned to walk into the conference room.

Opposite the long conference table, Infineon’s CEO, Dr. Karl-Heinz, was already seated.

This sixty-year-old German had graying hair and wore gold-rimmed glasses; he was a typical executive with an engineering background—rigorous and pragmatic.

”Good morning, Dr. Heinz,” Lin Wan greeted in fluent German—this was something she had specifically learned for this negotiation.

”Ms. Lin, your German is very standard.” Heinz smiled, but there was an imperceptible worry in his smile. ”Please, sit.”

After the pleasantries, they went straight to the point.

”We appreciate Spark’s breakthroughs in the field of materials.” Heinz got straight to the point. ”The data on the ’Heavenly Bow’ carbon fiber is impressive. But Ms. Lin, you know our dilemma—the America Department of Commerce’s ban restricts us from exporting any equipment with more than 10% America technology content to China.”

Lin Wan nodded: ”That is why we have proposed a ’de-Americanization’ production line plan. According to our understanding, Infineon has a complete 16-nanometer automotive chip production line in Malaysia, with America technology accounting for less than 5%.”

Heinz exchanged a glance with the technical director beside him.

That production line was Infineon’s secret asset, laid out in advance to avoid geopolitical risks; very few outsiders knew about it.

”That production line... does indeed exist,” Heinz admitted, ”but it is our strategic reserve, not for sale.”

”What if it’s a joint venture?” Lin Wan threw out the bargaining chip. ”Spark and Infineon establish a joint venture company and build a factory in China. Infineon holds 49% of the shares, and Spark holds 51%. The equipment from that production line will be Infineon’s capital contribution. The chips produced by the joint venture will be supplied to Spark’s automotive business first, but Infineon can use them for other customers.”

This plan was very clever.

By using a joint venture format, it bypassed the ”exporting equipment” restriction—the equipment was brought into the joint venture company as Infineon’s investment.

And the 49% shareholding ratio allowed Infineon to maintain influence while letting Spark hold the controlling stake, which complied with China’s foreign investment policies.

Heinz pondered.

The technical director whispered in German: ”This plan... is technically feasible. But America...”

”The America ban restricts technology exports, not investment.” Lin Wan replied in German, which surprised the two Germans. ”The joint venture company is located in China, and the chips produced are sold in China, not involving exports to America or countries using America technology. This is not within the scope of the ban.”

She brought up the legal analysis she had prepared: ”We have consulted with the top international trade lawyers in Europe and America. The conclusion is—as long as the joint venture’s products do not enter the America market and are not used by entities on the America sanctions list, this model is legal.”

The conference room was quiet for a few minutes.

Heinz was quickly calculating the pros and cons.

He was very clear about Infineon’s dilemma: the automotive chip market was exploding, but the America ban restricted their expansion in China.

And China was the world’s largest automotive market; losing it might mean Infineon losing the future.

”What is the investment scale of the joint venture?” he asked.

”A total investment of 3 billion euros.” Lin Wan provided a detailed plan. ”Infineon contributes the ’de-Americanized’ production line equipment valued at 1.4 billion euros, accounting for 49%. Spark contributes 1.6 billion euros in cash, accounting for 51%. The factory will be located in Daya Bay, Huizhou, where there is a nuclear power plant that can provide stable and low-cost electricity—which is crucial for chip manufacturing.”

”What about the technology?” the technical director asked.

”Jointly develop 14-nanometer automotive chips.” Lin Wan said, ”Infineon provides FD-SOI process experience, and Spark provides material process support—especially the application of ’Heavenly Bow’ carbon fiber in chip packaging heat dissipation. Intellectual property is shared, but the China market is led by Spark, and the European market is led by Infineon.”

This condition was very tempting.

Infineon had been developing 14-nanometer automotive chips, but was being choked on EDA software—America’s Synopsys and Cadence no longer provided the latest tools to Infineon’s China branch.

”We have our own autonomous EDA.” Lin Wan saw the other party’s concerns. ”Developed by Academician Li Weimin’s team, although it is not as mature as America’s, the basic functions are complete. And—there are no backdoors, no monitoring, it is completely autonomous and controllable.”

This sentence moved the technical director.

He whispered to Heinz: ”Karl, if we can share EDA technology with Spark, our R&D in Europe will also benefit. America’s EDA software is not only expensive, but also has security risks.”

Heinz’s fingers tapped the table gently.

This was a habitual action when Germans were thinking.

”Ms. Lin, I need board approval,” he finally said, ”but in principle, I support this plan. However, there are a few conditions.”

”Please go ahead.”

”First, the joint venture must establish a dual structure—one entity within China, responsible for production and sales in the China market; one entity abroad (for example, in Singapore), responsible for technical R&D and the international market. This is to avoid potential legal risks.”

”That is acceptable.”

”Second, the sharing of material technology must be specific. We need the full technical parameters of ’Heavenly Bow’ carbon fiber, as well as its specific application plan in chip packaging.”

Lin Wan hesitated.

This was Spark’s core secret.

”We can share the application plan, but the basic material formula cannot be shared.” She said candidly, ”However, we can promise—the carbon fiber materials needed by the joint venture will be supplied by Spark at cost price, ensuring priority supply.”

Heinz nodded after thinking: ”Acceptable.”

”Third, and most importantly—” Heinz leaned forward, ”We need an ’insurance policy.’ If the America government exerts pressure, causing the cooperation to be interrupted, Spark must compensate Infineon for its losses.”

This requirement was very harsh.

But Lin Wan knew this was the caution of the Germans.

”We can set up a risk fund.” She proposed a plan. ”Both sides contribute 200 million euros, deposited into a Swiss bank escrow account. If the cooperation is interrupted due to force majeure, this fund will be distributed according to the responsible party. If the cooperation goes smoothly, the principal and interest will be returned after five years.”

”Reasonable.” Heinz finally showed a genuine smile. ”Ms. Lin, you are one of the most professional negotiators I have ever met. So... do we have an agreement?”

”We have an agreement.” Lin Wan stood up and reached out her hand.

The two hands shook together.

The first deep cooperation between China and Europe in the semiconductor field was quietly reached on this autumn day in Munich.

That night, Lin Wan’s team celebrated in the hotel room until late at night.

But what they didn’t know was that outside the hotel, two black Mercedes-Benz cars had been parked for a whole day.

On October 31st, Lin Wan’s team went to Grenoble, France, to visit STMicroelectronics.

Unlike Infineon’s pragmatism, STMicroelectronics’ attitude was more ambiguous.

Grenoble is located at the foot of the Alps and is known as the ”Silicon Valley of France.”

STMicroelectronics’ R&D center is a modern glass building, and historical photos of the company hang in the lobby—from early transistors to the latest automotive chips.

Receiving Lin Wan was the Chief Technology Officer of STMicroelectronics, André Dupont, a Frenchman in his fifties, suave, but with a uniquely French sense of aloofness in his eyes.

”Ms. Lin, welcome.” Dupont’s English had a heavy French accent. ”We greatly admire Spark’s achievements in the field of materials. ’Shadow’ stealth material—if the data is true, it will be revolutionary.”

The talks began in a relaxed atmosphere.

The two sides first exchanged views on technical trends and discussed the future of the FD-SOI process.

STMicroelectronics has deep accumulation in this area, and Spark chose the FD-SOI route, so they had a lot in common.

But when it came to specific cooperation, Dupont’s attitude became cautious.

”In principle, we are very willing to cooperate with Spark.” He said, ”But you know, the French government... is under pressure from Washington. Any cooperation with China involving advanced technology must undergo strict review.”

Lin Wan was prepared: ”We understand. So our plan is—tripartite cooperation. Spark, STMicroelectronics, plus a European sovereign fund, such as the French National Investment Bank. Through this structure, we can ’Europeanize’ the cooperation and reduce political risks.”

Dupont’s eyes lit up.

This plan was very clever—by introducing French national capital, the cooperation becomes an ”internal European affair,” which is difficult for America to interfere with directly.

”In addition,” Lin Wan continued, ”we can promise—the technology produced by the cooperation will be prioritized for licensing to STMicroelectronics in the European market. Spark will only focus on the China market.”

This condition was very tempting.

STMicroelectronics’ biggest worry was technology outflow, cultivating a competitor.

But if Spark promised not to enter the European market, then the cooperation would become complementary rather than competitive.

”Specific cooperation content?” Dupont asked.

”STMicroelectronics provides FD-SOI process authorization, non-America version.” Lin Wan said, ”Spark provides application technology for new materials in chip heat dissipation and packaging. We will jointly develop the 14-nanometer FD-SOI process, aiming for mass production in 2019.”

The technical team began to discuss in depth.

STMicroelectronics’ experts showed great interest in the application of ”Shadow” material in chip electromagnetic shielding, while Spark’s engineers were eager to learn about the details of ST’s FD-SOI process.

The talks lasted for six hours.

At the end, both sides signed a ”Letter of Intent for Cooperation,” agreeing to negotiate again in the first quarter of 2018.

When seeing Lin Wan out, Dupont whispered: ”Ms. Lin, let me tell you an inside tip—the America midterm elections are in November next year. After the elections, the political pressure might be a little less. At that time, perhaps we can push forward faster.”

Lin Wan nodded: ”We can afford to wait. Technology cooperation requires patience.”

It was already evening when she left STMicroelectronics.

The autumn day in Grenoble was beautiful, and the setting sun cast a golden coat over the Alps.

But Lin Wan was in no mood to enjoy it.

Security chief Leng Feng walked to her side and whispered: ”President Lin, there is a situation.”

”Speak.”

”When we left Munich, there were two cars taking turns following us. Just now in downtown Grenoble, they appeared again. It’s not the same group of people, but the methods are very similar—professional intelligence agency tracking.”

Lin Wan’s heart tightened: ”Can you determine which side it is?”

”Highly likely to be the CIA, or a European intelligence agency coordinated by them.” Leng Feng said, ”Our itinerary is confidential, but they still grasped it. It means our communications might be monitored, or... there is a mole in the team.”

”The possibility of a mole is low.” Lin Wan shook her head. ”Everyone who came out this time is core personnel, and their backgrounds have been vetted three times. It’s more likely to be communication monitoring—America’s global surveillance network lives up to its reputation.”

”What should we do?”

”Proceed as planned.” Lin Wan said calmly, ”But change the itinerary. The original plan to fly to the Netherlands tomorrow to visit ASML is canceled. Change to go directly to the airport and fly to Switzerland. Transfer in Switzerland to return to China.”

”Switzerland?”

”Yes. Switzerland is a permanently neutral country, and intelligence activities are relatively restricted. And—” A sharp glint flashed in Lin Wan’s eyes, ”We can deliberately leak a fake itinerary to see who takes the bait.”

That night, when the team was packing their luggage at the hotel, Lin Wan ”accidentally” printed an itinerary at the hotel business center and then ”forgot” to take it.

The itinerary showed: Tomorrow at 10:00 AM, fly to Eindhoven, Netherlands, to visit the ASML headquarters.

In fact, the real itinerary was: 5:00 AM, take a rental car, travel by land to Zurich, Switzerland, and then fly back to China from Zurich.

At 4:00 AM on November 1st, before dawn, Lin Wan’s team left the hotel quietly in three cars.

Leng Feng’s car led the way, Lin Wan was in the middle, and the technical team was behind.

After driving out of downtown Grenoble, Leng Feng said through the walkie-talkie: ”There is a tail behind, two cars, following very professionally.”

Lin Wan took a look in the rearview mirror.

Sure enough, two black Audi cars were keeping a safe distance but were always following behind.

”As planned, split up.” She ordered.

The three cars separated at a highway fork, heading in three directions.

The tracking vehicles hesitated for a few seconds, split into two groups, and followed Lin Wan’s and Leng Feng’s cars respectively.

Lin Wan’s driver was a former special forces soldier with first-class driving skills.

He first suddenly changed lanes on the highway, crossing four lanes from the leftmost lane to enter an exit ramp.

The tracking vehicle was caught off guard and almost missed the exit.

After getting off the highway and entering the mountain road, the road was winding, and fog began to fill the air.

The driver suddenly turned off the headlights, turned into a small path, and then parked the car.

The tracking vehicle drove past on the main road without finding them.

After waiting for ten minutes, confirming it was safe, the vehicle restarted and continued to Switzerland via the small path.

At 8:00 AM, Lin Wan received an encrypted message at Zurich Airport, sent by Leng Feng: ”The tracking vehicles were shaken off at the German-French border. But the other party is very professional and may have guessed our destination.”

Lin Wan replied: ”Fly back to China as planned. Stay safe.”

Just as she was preparing to board, her phone rang.

It was an unknown number.

After connecting, the other party said in English with a German accent: ”Ms. Lin, have a pleasant trip. But please remember—some things should not be touched. This time is a warning, next time... you might not be able to return to your country.”

The call hung up.

Lin Wan stood at the boarding gate of Zurich Airport, watching the planes taking off and landing outside the window, feeling a chill down her spine.

This was not business competition; this was a game between nations.

And Spark was already deeply involved in it.

She sent an encrypted email to Su Chen, reporting in detail the results of the European trip and the threats encountered.

Three hours later, the plane took off, leaving the European continent.

Lin Wan looked at the Alps, which were gradually getting smaller outside the window, with mixed feelings in her heart.

This trip had breakthroughs—the joint venture agreement with Infineon, the cooperation intention with STMicroelectronics.

And there were dangers—being tracked, being threatened.

But this is the price of technological rise.

When you try to change the rules of the game, the old vested interests will not sit idly by.

The plane passed through the clouds and entered the stratosphere.

Sunlight shone in through the porthole, warm and bright.

Lin Wan closed her eyes.

She thought, in Shenzhen at this moment, Su Chen should have already received the email.

What would he think?

Would he be worried, or would he be even more determined?

What she didn’t know was that in Shenzhen, after reading the email, Su Chen only replied with one sentence: ”You’ve worked hard. Go home and rest. The next hard battle is at home.”

Yes, the hard battle is at home.

The chip needs to be taped out for the second time, Red Flag needs to expand production capacity, and materials need to be protected from spies.

October is over, but the days of ice and fire are continuing.

And Spark must find its way forward between this ice and fire.