At the airport, the Wang Foundation and its delegation were received with high standards by Minister of Foreign Affairs and Trade Kim Doo-hwan and Chairman of the National Economic Advisory Council Lee Myung-an, and received flowers and VIP treatment.
Then, the motorcade drove directly to Cheong Wa Dae.
There, the commander-in-chief cordially received Wang Yaocheng, the world's richest man, who led a consortium to inspect, and gave a warm speech, warmly welcoming the inspection visit and investment in Korean enterprises, and cherishing the traditional friendship between the two countries.
"Crack."
Li Jianxi turned off the LCD TV with looming anger, and coldly spat out a few words on his angular and tough face: "Weasel is paying New Year greetings to chicken~ He has no good intentions."
Lee Jin-cheol, director of Samsung Economic Research Institute, glanced at Song Changxu sitting next to him and wisely closed his mouth.
Song Changwook is the president of Samsung Electronics. Today, he is holding a small-scale strategy meeting for the president of Samsung Electronics. Also present are vice presidents Ji Injun, Cui Zhehuan, Lee Wankyu and others.
"Chairman, according to our prior evaluation, Wang Yaocheng is probably here for Hynix. There may also be a semiconductor company on the target list. This is a high-tech electronics company that can arouse their interest. He is here with bad intentions!"
It is actually not difficult for Samsung Group to guess its intentions.
There are not many targets in Bangzi State that are large enough and attractive enough. In the semiconductor industry, there is only one company, Hynix, which is deeply in debt.
The plummeting price of DRAM in 1997 caused Hynix to suffer a huge loss of US$2.6 billion. It was unable to repay the huge loan (more than US$14 billion) owed when it acquired LG Semiconductor on schedule, and its asset-liability ratio was as high as an astonishing 236%.
When the financial crisis hit, everyone thought Hynix was doomed, including Samsung Group.
Creditors headed by Korea Exchange Bank (KEB) entered Hynix and took over management rights, and began to look for buyers. However, such a huge debt mess, and in the memory industry that is losing money and dying, both Samsung and LG refused to take over.
.
This is the case with the memory chip industry. It makes money faster than a money printing machine, but loses money like a bottomless pit. Moreover, the production line cannot be stopped. Once it stops, the market will be lost.
Previously, Hynix's creditors found Micron, the American manufacturer that was best at taking advantage of others' crises. The other party actually proposed an incredible jump price, which caused a huge dispute among the 130 creditors.
If you sell it, more than half of the creditors will go bankrupt immediately. If you don't sell it, everyone may die.
At this time, Hynix employees broke out, and the union issued a stern statement to Micron, claiming that once the acquisition was completed, all employees would resign collectively. Under such circumstances, Micron, which wanted to take advantage of the situation, had no choice but to retreat.
Right now, this is such an unfortunate situation.
Including Samsung, major modern DRAM manufacturers are eagerly looking forward to the collapse of Hynix, hoping that memory prices will rise after Hynix collapses.
A dead Taoist friend is not a poor Taoist, this is the mentality.
To everyone's surprise, Hynix's creditors, especially the Korean Exchange Bank KEB, did not give up. 130 creditors united and went to Hong Kong to seek a merger and acquisition by the Wang Group, which led to this trip to Seoul.
Depending on where you stand, your perspective on the problem will be different.
Samsung and Hyundai both want Hynix to go bankrupt. As the largest creditor, Korea Exchange Bank certainly cannot allow it. This represents a loss of billions of dollars, which is an unbearable burden.
"What do you think about this?" Li Jianxi glanced at everyone with majestic eyes, like a lion king entrenched in his own territory, not allowing the slightest provocation or disrespect.
Li Jinzhe said cautiously: "Chairman, at this difficult time, it may be difficult for us to stop the government and Keb Bank from taking action. After all, the fall of Hynix will have a huge impact on the Korean industry."
"I would rather he fall than be taken away by the enemy. The Wang Consortium is our biggest competitor and the most dangerous competitor. Its development speed is frightening. This is not the time to talk about patriotism."
Li Jianxi was furious and roared in a loud voice. Li Jinzhe, the director of the Institute of Economic Research, was too frightened to speak any more: "Please forgive me, Chairman, my view of the matter is too shallow."
"snort!"
With a heavy snort, Li Jianxi glanced at everyone with stern eyes: "What reasonable countermeasures do you have for the current situation?"
Song Changxu is the president of Samsung Electronics. When he saw his deputies hanging their heads and looking down like elementary school students, as if there was something interesting to see, he could only answer bravely;
"Chairman, Samsung Semiconductor Division is expanding counter-cyclically, launching two new eight-inch wafer fab projects, and retaining the right of first refusal to purchase equipment at two eight-inch wafer fabs, expanding its production capacity by 60%.
Currently, due to the high yield rate of memory chips in the Semiconductor Division, stable prices for long-term customers, and the internal consumption of 35% of the group's production capacity, various factors are intertwined;
Although our production capacity is stronger than that of Hynix, our losses are smaller. In 1997, we lost US$1.15 billion, showing strong competitiveness, far exceeding that of major Japanese manufacturers. Our current market share in the world has reached 19%.
Once the counter-cyclical expansion is completed, we can expect the market share to reach 31% to 32% by the end of 1998."
After introducing these, Song Changxu said with some guilt; "Of course, if the current sluggish memory chip prices remain sluggish, the semiconductor division's losses may further intensify."
There was a moment of silence in the conference room
Li Jianxi asked without any emotion; "How is the situation of the Atlantic Wafer Technology Group of the Wang Consortium?"
Li Jinzhe, director of the Economic Research Institute, quickly opened the information he brought with him; "Because the other party is not a listed company, all business operation data are confidential. According to our analysis of the market, customers, production yield and production line operating capacity, factory equipment and personnel wages,
After careful calculation, we came to the following conclusions;
Due to the high affordability of Atlantic Wafer Technology Group's customers, including long-term major customers such as Yangtze River Technology Group, Yellow River Technology Group and Nokia Corporation, they have signed long-term stable supply contracts, accounting for 77% of the total production capacity.
Therefore, it is less affected by the plunge in memory chip prices.
The four major eight-inch wafer fabs produce memory chips. According to scientific evidence, the loss in 1997 was about 373 million U.S. dollars, not higher than 420 million U.S. dollars, which is relatively accurate."
"How come the loss is so small?"
Senior officials attending the meeting all had shocked faces. As far as they knew, major Japanese companies were losing billions of dollars, and each one of them planned to withdraw from the field of memory chip production. They really couldn't afford the loss.
Li Jinzhe gave a detailed answer; "The salary of high-level personnel in China is only 1/8 to 1/10 of South Korea, and the salary of ordinary workers is even lower.
Generally speaking, the monthly salary of high-quality production line employees is about 2,000 yuan, which translates to 240 US dollars, which is ten times the difference with domestic employees.
The monthly salary of an ordinary worker is about 700 to 800, which is about 90 US dollars when converted. The difference with that of domestic workers is as much as 15 times, and the difference with that of large Japanese-owned factories is as high as 40 to 50 times.
Coupled with other generally low costs, the production cost of an eight-inch wafer fab in China is 65% lower than that in China, and the difference is very large.
If the price of memory chips is high, this part of the cost will not be reflected at all, but when the price plummets, it will show unparalleled competitiveness.
In addition, Atlantic Wafer Technology Group's production patent pool originates from the Japanese giant Fujitsu. It has a full set of production secrets and experienced Japanese employees to teach them step by step, and its product yield can equal Samsung's semiconductor division.
Moreover, the foundry company Changjiang Technology Group consumes a large amount of memory chips and application chips, and has relatively borne part of the losses caused by the price collapse, so the losses are not large.
This is the linkage effect of group companies and is worth pondering."
Think about it!
The Samsung Group is completely different from the Wang Consortium, and other people's methods cannot be copied and used.
Samsung's companies are all independent legal persons, and most of them are listed companies. Samsung Group does not have absolute controlling rights. In some companies, it only holds about 10 to 20% of the equity. It controls the entire group through complex cross-shareholdings of its companies.
If an internal company transfers interests, it must first ask other shareholders whether they agree.
If you don't buy cheap memory chips on the market, but insist on buying expensive Samsung semiconductors, is the democratic system of Korea's country just a show-off?
Changjiang Technology Group, a subsidiary of the Wang Consortium, is a wholly-owned subsidiary. It can do whatever it wants. How can others learn from it?