Tech Giants: Starting from Bankrupt Companies

179: Chapter 179 The ”Domestic Production” of 16-Nanometer Technology”Xiaowei has made a great contribution,” he said to the executives beside him, ”But she only solved the emotional problem. The substantive problem—production capacity—still depends on us.”

He pulled up the new strategic chart.

Red Flag Phase II Strategy: Establishing a Foothold

The large screen displayed the changes in market share:

In the 150,000-300,000 price range, Red Flag’s market share soared from 3% (last February) to 18% (this January).

It mainly snatched market share from joint-venture brands like Volkswagen, Toyota, Honda, and Nissan.

”In the past, when we talked about ’domestic high-end,’ others laughed,” Chen Haitao pointed to the data, ”Now, it’s our turn to laugh. But after laughing, what should we do?”

He switched the PPT.

Next Phase Product Matrix:

High-end sedan H7 (in pre-research): Benchmarking against Mercedes-Benz S-Class, priced at 450,000-800,000, equipped with Spark fourth-generation smart cockpit and pre-embedded hardware for L4 autonomous driving.

Performance SUV X2: Equipped with Spark third-generation electric drive system, 0-100 km/h acceleration in 3.5 seconds, 800 km range, priced at 300,000-500,000.

E-MINI Pro: Performance upgrade version, satisfying the personalized needs of young users.

”What we need to do is not create a fleeting hit,” Chen Haitao said, ”but to build a full price-range product line from 100,000 to 800,000, with competitiveness in every market segment.”

He paused: ”Mr. Su of Xinghuo once said to me: The automotive industry is the backbone of a country. If Red Flag wants to be the backbone of Huaxia, it must be able to support all the weight.”

After the meeting, Chen Haitao returned to his office.

The stomach medicine was still on the table, but he didn’t take it.

Outside the window, snow was still falling in Changchun. But the lights on the production line never went out, 24 hours a day.

February 5th, 9:50 AM, main venue of the National Convention Center in the Imperial Capital.

The hall, which could accommodate two thousand people, was packed. In the front row were domestic and foreign media with their cameras and microphones, in the middle were industry chain partners, and in the back row were investors and analysts.

The large screen displayed a countdown: 10:00.

Luo Qinghe stood backstage, adjusting his suit. This former university professor was now an iconic figure in Huaxia’s semiconductor industry.

”Nervous?” Su Chen walked over.

”A little,” Luo Qinghe admitted, ”The data announced today will keep the whole world awake at night.”

Su Chen smiled: ”Then let them suffer from insomnia.”

9:59 AM.

Luo Qinghe walked onto the stage.

There was no opening remark, no pleasantries; he directly pressed the remote control in his hand.

The large screen lit up, divided into four frames:

Top left: Imperial Capital Yizhuang chip base

Top right: Magic City Zhangjiang chip base

Bottom left: Shenzhen Pingshan chip base

Bottom right: Xian High-tech chip base

The four screens were transmitting in real-time.

”Good morning, everyone,” Luo Qinghe’s voice was calm, ”Today is February 5, 2018. On this day one year ago, Xinghuo Chip launched the R&D of the ’flint no. 2’ 16nm process. The industry consensus at the time was: Huaxia’s chip manufacturing was at least five years behind the world’s advanced level.”

He paused, scanning the audience.

”Today, I want to tell you all: This consensus was wrong.”

He pressed a button.

The images of the four bases zoomed in simultaneously.

Imperial Capital Base: Lithography workshop

The ASML lithography machine was in operation—this was the last batch purchased before the ban. But the auxiliary equipment next to it was all domestic: Huachuang Precision’s coater-developer, the Chinese Academy of Sciences’ laser annealing equipment, and Naura’s etching machine.

Engineers in cleanroom suits were monitoring at the control consoles. The screens displayed a fully Chinese interface.

Luo Qinghe’s voice came through: ”This is a localized lithography production line. The lithography machine is still imported, but all supporting equipment, materials, and software are already 100% domestic. And—our own lithography machine will be able to enter the facility by the end of the year.”

Magic City Base: Materials Laboratory

Researchers in white coats were testing domestic photoresist. Under the electron microscope, the lines were as clear as if carved by a knife.

”Photoresist, the ’blood’ of chip manufacturing. In the past, we relied entirely on Japan and the US, but now we have achieved autonomous supply of photoresist below 28nm. The 16nm chips mass-produced today use domestic photoresist.”

Shenzhen Base: Testing Center

chips were being tested under extreme environments:

High-temperature box: 125 degrees Celsius

Low-temperature box: minus 40 degrees Celsius

Vibration table: simulating car bumps

Humidity box: 85% relative humidity

Data displayed in real-time: All chips were operating normally.

”Automotive-grade chips require a lifespan of 15 years and a failure rate of one in a billion,” Luo Qinghe said, ”Our 16nm process has passed all automotive-grade certifications.”

Xian Base: Packaging Workshop

chips were being cut, packaged, and tested. Robotic arms moved rapidly, processing three hundred chips per minute.

”This is the ’Noah’s Ark’ deep in the Qinling Mountains,” Luo Qinghe emphasized, ”If coastal bases cannot produce for any reason, the Xian base can independently support 70% of the country’s chip demand.”

The four screens shrank, and a data panel appeared in the center:

’flint no. 2’ 16nm process key indicators

Transistor density: 48 (on par with TSMC 16nm)

Maximum frequency: 3.2 GHz

Power consumption: 35% lower than the previous generation

Yield: 85.3% (mass production standard)

Most importantly: Full chain localization rate—92%

The audience began to stir.

Reporters were frantically taking photos, and analysts were typing rapidly on their keyboards.

Luo Qinghe released the second set of data:

Capacity planning

Current monthly capacity: 200,000 wafers (12-inch wafers)

Quarterly increase: 200,000 wafers per quarter

Year-end target: 1 million wafers/month

This means: Xinghuo will occupy 15% of global 16nm capacity.

”What is the concept of 15%?” Luo Qinghe asked and answered himself, ”Enough to supply 60% of Huaxia’s annual mobile phone chip demand, 80% of automotive chip demand, and 100% of industrial control chip demand.”

He looked at the camera, his eyes burning like torches.

”Starting today, Huaxia’s chip industry is no longer just a ’chaser.’ At this key node of 16nm, we are already a ’participant,’ and we will soon become a ’leader.’”

Applause thundered.

But Luo Qinghe wasn’t finished yet.

”I know some people will ask: With such large capacity, who will you sell it to?” He switched the screen, showing the list of partners.

First batch of capacity allocation (already signed)

Hongqi Automobile: 30% (automotive chips)

Huaxing Mobile Phone: 25% (mobile SoC)

Xingchen Military Industry: 15% (military chips)

ZTE/Huawei: 10% (communication chips)

Other domestic enterprises: 20% (industrial, consumer electronics)

”All capacity has been pre-ordered until the first quarter of next year,” Luo Qinghe said, ”And we have received order demands more than three times our existing capacity.”

He paused and released the third chart: Global chip capacity distribution.

”Currently, for global 16nm and above mature process capacity, TSMC accounts for 55%, Samsung accounts for 25%, Intel accounts for 10%, and other companies account for 10%.” Luo Qinghe used a laser pointer to circle ”other,” ”By the end of this year, this ’other’ will become 25%, of which Xinghuo will account for 15%.”

”This means that in the mature process field, Xinghuo will become the world’s third-largest player, second only to TSMC and Samsung.”

The audience was completely boiling over.

A foreign reporter raised his hand: ”Dr. Luo, how do you guarantee the speed of capacity expansion? chip factory construction usually takes two to three years!”

”Good question,” Luo Qinghe smiled, ”The answer lies in the ’four-location layout’ strategy.”