RBCT Chapter 1424 What a Storm (1k)
Chapter 1424 What a Storm (1k)
Chapter 1424 What a Storm (4k)
After Yike confirmed the date for its autumn conference, Samsung chose to completely terminate negotiations with Yike and told the market that it would not outsource its business.
In fact, contrary to what the outside world imagines, the two companies did have talks, but the attitudes of both Samsung and Yike were somewhat lukewarm.
Samsung was rather surprised by Yike's attitude, which was different from what it had imagined, but it was happy to see it happen and was also happy to take action at the critical moment.
Yike's mobile phone chip orders are indeed a huge source of revenue. According to current and future conditions, they may be comparable to Apple's orders, enough to become an important part of the healthy operation of a wafer foundry company.
However, Samsung's business cannot be viewed in isolation.
Compared with wafer foundry, Samsung's mobile phone market in the world is of utmost importance. It would rather not have orders than reduce Yike's competitiveness. This is the main contradiction in the competition between the two companies.
As expected, the news really impacted Yike's stock price. However, it was not enough...
The Samsung camp closely followed the developments of its competitors and soon received new good news.
Entering the first week of August, Taiji, a leading company in the wafer foundry field, answered reporters' questions at a press conference and gave a definite answer to everyone's concern about the negotiations with Yike.
“We welcome Yike’s cooperation with us.”
"However, we cannot accept orders from Yike this year as the production capacity of 16nm process is already full. We have to wait until next year at the latest to see if there is a chance to cooperate with it."
"YiKe is a very good company and we regret this."
In Yike's list of potential partners, Taiji is a very promising wafer manufacturer. It is not only the third company in the world to mass-produce 16nm process, but also has sufficient experience to promote capacity expansion.
At the same time, unlike Intel and Samsung, it does not take into account other business attributes, but is just a pure wafer foundry.
Taiji's "OEM" attribute has always been praised.
This time, it was unfortunately unable to produce its production capacity. Regardless of whether it was a real regret or not, this result still impacted Yike's performance in the secondary market like a shock wave.
Even though Bingxin was restricted, it was not suppressed to 3500 billion US dollars. YiKe’s market value fell to this range for the first time. The doubts that have been lingering on YiKe since the first quarter suddenly became the focus of attention again.
As Yike's autumn press conference approaches, people are no longer concerned about its products, but the company's future.
Where will Yike go?
In mid-August, YiKe’s stock, which had been under continuous pressure, finally received some good news that gave people a sigh of relief: another Taiwan wafer foundry, UMC, had new developments in mutual cooperation.
At ten o'clock in the morning on the 14th, UMC's CEO Yan Bowen accepted an interview with the media at the airport and said that he would soon fly to Shanghai, China, to meet with Yike's head in person and discuss in-depth cooperation between the two companies with Mr. Fang.
UMC just announced last month that its 16nm process has entered the small-scale mass production stage and is expected to achieve large-scale mass production for formal commercial use in the fourth quarter.
Compared with ICE, Intel, TSMC and Samsung, it is the fourth manufacturer in the world to reach this process node.
However, like Samsung, UMC made the mistake of choosing the front-gate or last-gate solution at the 28nm stage. Its process was not stable while it was catching up, and it was relatively short of customers and orders.
Samsung has a more important mobile phone business, and Taiji's excellent technology has already divided up all the production capacity. Yike's supply demand is exactly what second-tier manufacturers like UMC want.
UMC had been in talks with Yike since the second quarter, but it had to contend with Intel and GlobalFoundries. When their negotiations broke down, and the company had just completed small-scale mass production, CEO Yan Bowen couldn't wait to talk to Mr. Fang in person about cooperation.
There was one key point in his answer at the airport that showed his sincerity.
"As for the specific extent of our cooperation, UMC does not mind cooperating with an excellent company like Yike in the form of a private placement. I believe that we have extremely bright prospects for cooperation with Yike."
Yan Bowen referred to the previous cooperation between Yike and GlobalFoundries and proposed in-depth cooperation through a targeted share issuance.
Such news cheered up Yi Ke and related investors before his flight landed in Shanghai, and also stimulated the stock price to rebound.
This kind of goodwill from the CEO can be said to be the most sincere this year, and Yike does not have much time left. The two companies have both the foundation for technical cooperation and the subjective will to get what they need, which makes them a perfect match.
Yan Bowen's visit attracted much media attention, but Yike 23 is not open to the public, and Fang Zhuo, who has been extremely low-key recently, did not accept any interviews. The outside world only knew that Yan Bowen talked at Yike for three days, then he flew to Luzhou, and finally ended his nearly one-week journey.
When UMC's CEO returned to Taiwan, he did not remain silent like Yi Ke did, but openly accepted interviews and revealed the progress of the negotiations.
"YiKe is extremely good in the field of chip design and is one of the top companies on the planet!"
“Mr. Fang and I both believe that the cooperation between Yike and UMC will be a win-win situation!”
“We still have some disagreements, but please believe that the strong combination of UMC and Yike is on the way!”
Yan Bowen was very ambitious during the interview and also revealed some details of his communication with Mr. Fang.
He praised Mr. Fang as one of the best presidents in the world.
The remarks from UMC's CEO made the performance of the secondary market warm up again. However, unlike outside analysis and predictions, his disagreement with Fang Zhuo was not about Yike, but about Bingxin.
On behalf of the board of directors, Yan Bowen was willing to accept Yi Ke's investment, but he hoped that Liang Mengsong's team could join UMC.
Bingxin International has joined Amei Yanxuan, and its future is worrying. However, its achievements in advanced technology in recent years are impeccable, and the greatest credit goes to Liang Mengsong and his team.
Liang Mengsong had a reputation when he left the station as a reporter, but it was not as brilliant as it is now.
Amei restricts the ice cores, not the employees inside them.
A considerable part of the sincerity that Yan Bowen showed to the outside world was his "envy" for the ice core technology, hoping to use it to solve UMC's weakness in R&D in the past few years.
Fang Zhuo naturally firmly disagreed with such a request, but he believed that there was room for maneuver on both sides. Dr. Liang could not go from Bingxin to UMC, but could take on an additional role as a consultant to UMC.
The two sides have yet to reach a consensus on this, but the prospects for cooperation are indeed becoming clearer.
Fang Zhuo's main focus is on Bingxin's preparations for the crisis. However, he does not rule out adding a new supplier to ease the current situation. He just thinks it is difficult to truly achieve such cooperation.
Intel had discussed this before, and GlobalFoundries already had plans for a private placement, but either there were internal objections or there was arbitrary interference, and the actual situation was consistent with the overall judgment.
This time, UMC came with sincerity and a desire for orders and technology. Yike still maintained a normal negotiating attitude in the docking, and indeed had a greater cooperation foundation with it than with several other companies.
The leaders met, the secondary market recovered, and relatively transparent progress disclosures were made. The dark clouds hanging over Yi Ke seemed to gradually fade away, and the thorny problems seemed to have received good answers.
However, on August 8, Fang Zhuo received a call from UMC CEO Yan Bowen, which was full of apologies and regrets.
"Mr. Fang, the cooperation between UMC and Yike may have to be temporarily suspended..." Yan Bowen was helpless.
"Where is the problem?" Fang Zhuo's tone was relatively calm.
"We have been under pressure from many parties." Yan Bowen said thoughtfully, "This year may not be a good time to cooperate with Yike, Mr. Fang, but I still warmly hope that we will have more appropriate opportunities for cooperation."
Fang Zhuo said regretfully: "If UMC can withstand the pressure, this will be a very good development opportunity."
Yan Bowen was silent for a while, and could only say helplessly: "I think so too, but there are voices from the authorities on the island, and there are also objections in the board of directors. I'm sorry, Mr. Fang, I have argued for it in the past two days and have tried my best..."
Fang Zhuo smiled and said, "The situation on the island is much more positive than that in the United States. I think such a decision is not in the interest of UMC itself."
"Some people think that there are risks even if we cooperate." Yan Bowen paused and said frankly, "Mr. Fang, I am not far from retirement. There are many voices within the company. After they get the support of the authorities... Alas, I am helpless too."
Fang Zhuo said "hmm" and thanked him again: "Thank you Mr. Yan for your efforts in the cooperation between our two companies. This is not your problem."
Yan Bowen smiled bitterly a few times, and finally said: "Mr. Fang, I have great respect for the development of Yike and Bingxin."
The end of the call between the two parties means that the window for cooperation between Yike and UMC has been closed.
Intel replaced its CEO, GlobalFoundries was ordered by the SEC to stop issuing additional shares, Samsung voluntarily terminated negotiations, Taiwan Semiconductor had no spare production capacity, and UMC was under pressure from within the island.
This phone call also means that all the names on Yi Ke’s list of potential partners have been crossed out.
As per usual practice, Fang Zhuo immediately notified the General Office of the latest developments, and was met with total silence.
Over the past week or so, UMC's moves and CEO Richard Yen's positivity have been like a ray of sunshine, making everyone feel that there is room for maneuver in the original predicament.
But this hope came and went quickly.
After a while, Executive Vice President Yu Hong said quietly, "Boss Yan didn't buy the company's stocks, and he has been busy for more than a week just to get rid of the loss..."
There were faint laughter in the conference room.
"Every family has this reason or that reason." Fang Zhuo's mood was not affected. "But fortunately, we didn't gain anything, nor did we lose anything."
He looked around at the general office members attending the meeting today and continued: "In the past, we fought side by side with the ice core, now we are still fighting side by side with the ice core, and in the future, we will continue to fight side by side with it."
"I said in Luzhou that it is better to have something yourself than to have it from your parents."
"Now, whether it is subjective or objective, we must have it ourselves. Not having a choice is actually the best choice."
"When Yike was first established, Mr. Yu and I discussed the company's purpose and believed that we must keep improving. Over the past decade, Yike's development has put this into practice."
"The company will face challenges and experience turbulence in the future. It is precisely because of this that our 'keep improving' is even more like 'in the face of adversity, the true character of a hero is revealed'."
“Values are not shouted out, but achieved through practice and accumulation.”
"UMC's Mr. Yan said that he has great respect for the development of Yike and Bingxin."
“I hope that many years from now, whether you are still at Yike or not, you will look back on this period of time with respect for the time you spent there.”
After the general office meeting, all the participants felt heavy-hearted, with some excitement but also some doubts. After all, the situation they encountered this time was completely different from the previous ones.
The news of cooperation from UMC has a lag in dissemination.
A day later, a rumor emerged that the cooperation between UMC and Yike, which was close to being reached, was terminated again.
However, Yan Bowen had already flown to Shanghai and affirmed the cooperation with certainty. As the CEO of one of the parties involved, his actions were highly supportive.
It was not until the morning of the 26th that the media was able to get through to the UMC CEO and personally confirm the authenticity of the information from him, and it was indeed true that the cooperation between the two parties had come to nothing.
As for the reason... Yan Bowen didn't give a reason, and his reason is not important.
Yike's stock price, which had rebounded in the past week, was bound to suffer another setback. With UMC's confirmation, the once seemingly rich list of potential partners no longer had any manufacturer's name, and this matter was immediately publicized.
What are the expectations for Yike to solve the limitations of ice cores?
Will it have to restart negotiations with Intel, or just engage in normal cooperation with second-tier manufacturers like GlobalFoundries?
Is the reorganization of Yike Optoelectronics a preparation for the former? I heard that Intel wanted the business that Yike Optoelectronics now has.
Almost at the same time when UMC confirmed it and foreign media reported it, Penguin Finance also immediately analyzed the dilemma faced by Yike with its key suppliers.
“Several Wall Street institutions have recently issued warnings about Yike’s stock price, arguing that there is great uncertainty in its supply chain.”
"With UMC announcing the termination of cooperation today, Yike may suffer another heavy blow. If it loses its advantage in core chips, its domestic and overseas markets will face severe challenges."
"We have seen Nokia's demise in the mobile phone market before, will we now see the rise and fall of another well-known mobile phone brand?"
August 8 was the date for YiKe's autumn press conference. At 26:3 p.m., YiKe's stock on the Nasdaq had already suffered a setback in pre-market trading, falling by more than %. As the morning arrived in the United States, related negative news became even more prevalent.
There was still half an hour left before the press conference. As the host of this event, Yu Hong paid attention to the falling stock price and the pessimistic media views, and also saw the latest news from domestic competitor Duji.
Robin, the head of Du Ji, was interviewed by the media and mentioned Yi Ke’s monopoly, believing that it was eligible for antitrust investigation.
She couldn't help but call Mr. Fang and sighed helplessly: "The storm is really coming."
Fang Zhuo on the phone just laughed: "What a storm!"
(End of this chapter)