Tech Giants: Starting from Bankrupt Companies

180: Chapter 180 Four Major Chip BasesA foreign reporter raised his hand: ”Dr. Luo, how can 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-Region Layout’ strategy.”

The big screen switched to a strategic map:

Xinghuo Chip Distributed Manufacturing System

Imperial Capital Base: Political center, ensuring priority for national key projects. Features: Most advanced equipment, strongest R&D capability.

Magic City Base: Financial and talent hub, aligning with international standards. Features: Best customer service, fastest product iteration.

Shenzhen Base: Innovation and speed, quickly verifying new processes. Features: Shortest trial production cycle, highest flexibility.

Xian Base: Strategic backup, safety bottom line. Features: Strongest anti-risk capability, highest confidentiality level.

”The four bases adopt unified production standards, unified material supply, and unified quality systems,” Luo Qinghe explained, ”A process breakthrough in one base can be replicated to the other three bases within three days. If one base has insufficient capacity, other bases can immediately make up for it.”

He displayed the real-time data stream:

Imperial Capital -> Magic City: Process file transmission in progress, progress 100%

Magic City -> Shenzhen: Equipment parameter synchronization in progress, progress 98%

Shenzhen -> Xian: Quality control data sharing, progress 100%

”This is called ’distributed survival’,” Luo Qinghe said, ”In a strategic industry like semiconductors, we cannot put all our eggs in one basket. The four-region layout means that any single external shock—whether it’s natural disasters, geopolitics, or technical blockades—cannot collapse our chip supply.”

The press conference entered the Q&A session.

The first to ask a question was a reporter from The Wall Street Journal: ”Dr. Luo, does the rapid expansion of Xinghuo mean that Huaxia will use chip capacity as a geopolitical weapon?”

The question was very sharp.

Luo Qinghe responded calmly: ”chips are commodities, not weapons. All of Xinghuo’s capacity is open to global customers—as long as it complies with international trade rules. In fact, we have already received inquiries from three European automobile companies and are currently discussing cooperation.”

”But America might impose sanctions on this.”

”Then let them impose sanctions,” Luo Qinghe’s tone remained calm, ”We have a 92% localization rate, four production bases, and a complete supply chain. Sanctions will only make us achieve 100% autonomy faster.”

The second question came from domestic media: ”How does Xinghuo balance commercial interests and national strategic needs?”

”For this question, please let President Su answer,” Luo Qinghe looked towards the stage.

Su Chen walked onto the stage.

This was his first public appearance today. Black suit, no tie, calm eyes.

”Xinghuo is a commercial company; we need to make a profit and be responsible to our shareholders,” Su Chen began, ”But the chip industry is special—it is both commerce and national destiny. Therefore, Xinghuo’s capacity allocation follows three principles.”

The big screen displayed:

Xinghuo Capacity Allocation Principles

National Security First: chips required for military and critical infrastructure are guaranteed unconditionally.

Strategic Partners First: Partners deeply bound with Xinghuo (such as Huawei, Geely) are guaranteed by long-term agreements.

Market Fair Allocation: Remaining capacity is allocated based on commercial factors such as price, payment terms, and cooperative relationships.

”There are domestic car company representatives waiting at the door, saying they are willing to prepay the full year’s payment as long as they get 5,000 units of capacity per month,” Su Chen said, ”I understand their urgency, but I cannot agree. Because if we give capacity to latecomers for a high price today, it is a betrayal of our early partners.”

He looked towards the direction of the Geely Automobile representative: ”Trust is built over the long term. When Xinghuo was at its most difficult, Geely gave us all their automotive-grade chip orders, betting their own brand on us. Now that Xinghuo’s capacity has come up, we cannot forget old friends.”

In the audience, the Geely representative’s eyes turned red.

”Finally, one last thing,” Su Chen faced the camera, ”Xinghuo’s 16nm mass production is not the end, but the beginning. 14nm process is already in R&D, and trial production is expected this year. Pre-research for 7nm, 5nm, and 3nm has already started.”

He paused, and said word by word:

”Competition in the chip industry is a marathon. We have just finished the first five kilometers and caught up with the first tier. The real battle is yet to come.”

The press conference ended.

Media headlines flooded the screen:

Huaxia Daily: Xinghuo 16nm mass production, a historic breakthrough in the semiconductor industry

Nikkei News: Huaxia chip capacity surges, global supply chain landscape changes

Bloomberg News: The rise of Xinghuo, TSMC faces its strongest challenger

The capital market reacted violently:

A-share chip sector rose across the board, with many stocks hitting the limit

TSMC’s pre-market US stock price fell 4%

Samsung Electronics fell 3%

And within Xinghuo, a more intense struggle had just begun.

Supply Chain Conference Room · Capacity Allocation Meeting

The conference room, which could seat fifty people, was squeezed with over eighty people. The people standing were lined up against the wall in two rows.

The atmosphere was tense enough to wring water out of.

Hongqi Automobile Purchasing Director, Old Zhao, spoke first: ”President Luo, President Su, we are not asking for special treatment. But our E-MINI orders are already scheduled eight months out. If chip supply can’t keep up, the entire production line will have to stop!”

The Vice President of Huaxing Mobile Phone continued: ”Our HX1 mobile phone also needs them; pre-orders have exceeded one million. If we are short of one chip, we sell one less phone!”

The representative from Xingchen Military Industry didn’t speak, but silently handed over a document—a red-headed document from the Military Commission’s Equipment Development Department, with the priority marked as ”Urgent”.

There were also representatives from a dozen small and medium-sized enterprises, looking on eagerly.

Luo Qinghe sat in the main seat, a thick stack of demand sheets in front of him.

”Everyone, calm down,” he raised his hand, ”Let me state a figure first: current monthly capacity is 200,000 units, next month it will be 250,000 units, and in three months it will be 350,000 units. Capacity is growing.”

”But demand is growing faster!” someone shouted.

”Yes,” Luo Qinghe admitted, ”So we must make trade-offs.”

He pulled up the allocation plan:

February Capacity Allocation (200,000 units)

Hongqi Automobile: 60,000 units (30%)

Huaxing Mobile Phone: 50,000 units (25%)

Xingchen Military Industry: 30,000 units (15%)

Geely / Huawei: 20,000 units (10%)

Other Enterprises: 40,000 units (20%)

”This ’Other Enterprises’ category includes the thirteen companies present,” Luo Qinghe said, ”Each company can get about 3,000 units.”

”3,000 units is not enough!” President Wang, who makes industrial robots, stood up, ”We need 5,000 units a month!”

”Then let’s bid for it,” Su Chen suddenly spoke.

Everyone looked at him.

”Market rules: when supply exceeds demand, prices regulate,” Su Chen said calmly, ”Xinghuo’s base price remains unchanged, but priority can be bid for. Those willing to pay a premium for priority delivery can get capacity earlier.”

The conference room was quiet for a few seconds.

”This is unfair!” someone objected, ”How can small businesses compete with large enterprises?”

”That’s why I set a cap,” Su Chen said, ”The premium will not exceed 20% of the base price, and small and medium-sized enterprises have preferential weighting. But more importantly—”

He stood up and walked to the whiteboard.

”Xinghuo is currently establishing a ’chip Capacity Sharing Platform’. Small and medium-sized enterprises can place joint orders. Once they gather enough demand for a batch (10,000 units), they can enjoy the same priority and price as large enterprises.”

He drew an architectural diagram:

The platform is operated by Xinghuo, but is open and transparent

Small and medium-sized enterprises post their needs online, and the system automatically matches and groups them

Xinghuo guarantees that at least 30% of capacity is reserved for small and medium-sized enterprise groups every quarter

”This can solve part of the problem,” Su Chen said, ”But the fundamental solution is to rely on capacity improvement. Therefore, 80% of Xinghuo’s profits this year will be reinvested in expansion. We will achieve a monthly capacity of 2 million units by the end of 2019.”

2 million units.

This number made everyone gasp—that was one-third of TSMC’s current total capacity.

”Can it be done?” Old Zhao asked in a low voice.

Luo Qinghe nodded: ”Equipment orders have been placed, factories are being built, and talent training plans have started. As long as there is no external interference, there is no problem.”