Chapter 137 - The Temperament of Yuanchip
United Microelectronics Corporation (UMC) gave Su Yuanshan an exceptionally high level of reception. Outside the R&D center, Cao Chengxing personally led Lin Yonggu and others to greet him, which somewhat surprised Su Yuanshan. But after a moment's thought, he understood. After all, hadn't his own father personally welcomed UMC's vice president last year? And his father was a well-known professor, an expert in the microcontroller field. It was only fair for UMC to return the courtesy.
After exchanging greetings, Cao Chengxing took Su Yuanshan on a tour of the R&D center and then invited him to the reception room for tea and casual conversation. After all, this visit was officially a courtesy call, not a business negotiation, so there was no need to be overly formal.
"President Cao, when will you build a factory on the mainland?" Su Yuanshan asked casually after they had discussed the current state of the semiconductor industry and spent some time mutually denouncing Intel's arrogance.
Cao Chengxing, though only in his fifties, had already gone quite grey. Hearing the question, he smiled and said, "Young President Su, are you here today to lobby for the Special Economic Zone government?"
Su Yuanshan laughed, "Not at all. It's just that my father helped broker the initial connection, so I'm a little concerned. Besides, I haven't contacted the SEZ government during this trip. I really don't know the current status. It's just my intuition — it feels like things might fall through."
"It's not that bad," Cao Chengxing replied with a smile. "Mainly, we haven't reached a consensus on certain agreements."
Su Yuanshan immediately caught the implication. That was a tactful way of saying, "This involves business secrets. Don't ask."
But Su Yuanshan couldn't afford not to ask. He hadn't come all this way to return empty-handed. At the very least, he needed a definitive answer. So he leaned into his youthful persona, known more for technical genius than political savvy, and said cheerfully, "What kind of agreements are so tricky? Maybe Yuanchip could help."
Cao Chengxing pondered for a few seconds, then laughed, "It's nothing too complicated. The SEZ wants us to build a factory with the most advanced process nodes. That's a bit at odds with our plans."
Su Yuanshan immediately asked, "So, are you considering relocating an existing facility or building a new one?"
"Relocating would be easier," Cao replied.
Su Yuanshan nodded. Currently, UMC had five fabs. If they chose to move, it would likely mean consolidating into four factories, freeing up a line for the mainland.
Cao continued, "That way, it would be simpler on our end too. Easier to get approvals."
Su Yuanshan chuckled, "It seems the mainland is more open than the island now. Look at me — opening a branch in Silicon Valley, selling EDA software freely — no one from the government interferes."
Cao Chengxing laughed loudly. Regulatory restrictions were an awkward topic that wasn't easy to discuss openly.
"But if that's the only sticking point," Su Yuanshan said, "I might actually be able to help. Let me give you a little inside information — soon, there will be a massive demand for IC card chips on the mainland. And when I say massive, I mean demand in the billions."
Hearing that, Cao's eyes sharpened. "Really? What project is it?"
"I can't say much. Just know there will be a huge demand," Su Yuanshan said with a smile.
Cao Chengxing inhaled slowly, deep in thought.
"So if I were you," Su Yuanshan continued, "even if we can't build a leading-edge fab, we should at least move a few existing production lines over."
He paused, then added, "Put it this way: you're a veteran of the semiconductor industry. You know that a fab's ability to survive a downturn depends on how well it handles memory market fluctuations."
Cao Chengxing slowly nodded.
Of course he knew. In the semiconductor world, they said, "Whoever controls memory, controls the world." CPUs are one per machine; graphics cards, also one; but memory sticks? Systems need multiple chips.
Worldwide, almost half of all fab capacity was dedicated to memory production. Whenever the semiconductor industry faced a downturn, memory prices collapsed first, devastating fabs heavily reliant on memory.
For example, DRAM prices plummeted from $4 per chip in early 1984 to just 30 cents by 1985 — a crash that forced Intel to exit the memory business.
"And purely from a risk mitigation perspective," Su Yuanshan said, "building fabs on the mainland has advantages. Costs are lower."
Cao Chengxing exhaled lightly, smiling, "That's true."
Watching Su Yuanshan drive away afterward, Cao Chengxing stood in place, frowning slightly in thought.
After a long pause, he turned to Lin Yonggu, "Yonggu, what kind of person is this young President Su, really?"
"Very smart," Lin Yonggu replied without hesitation. After thinking a bit, he added, "In integrated circuit design, he's a true genius — the real deal. He even switched his major to physics because he felt he had mastered IC design already. And they say he's self-taught in physics too."
"I heard about that," Cao Chengxing nodded. "But precisely because he's so smart, I can't help but wonder if he's trying to push some hidden agenda by rushing us into the mainland."
Lin Yonggu thought for a moment, then said, "I think his goal is simply to bring a wafer fab into China. And he's not wrong — the domestic demand for chips is massive."
Sitting in the car, Su Yuanshan frowned deeply.
He guessed that the SEZ government wasn't necessarily demanding leading-edge technology. They probably opened negotiations with a high ask, knowing they would have to compromise later. Their true goal was likely to attract at least 0.8-micron tech — enough to set a precedent.
When it came to the semiconductor industry, the SEZ government had ambition. But they hadn't realized that China's problem wasn't at the cutting edge — it was in domestic production capability. For a long time, and even over the next thirty years, China's biggest import category would be chips.
It wasn't until companies like Su Yuanshan's old employer got choked that everyone truly understood: without self-developed technology, everything must be imported.
"Was what you said earlier true?" Chen Jing asked quietly, glancing at him.
"You mean about the massive demand for chips?"
"Yes."
"It's true," Su Yuanshan smiled. "The mainland's thirst for chips and fabs is far greater than you can imagine. Build a fab, and it'll definitely make money."
"Then why don't you build one?"
"Because our pursuit is different," Su Yuanshan said, closing his eyes to rest. "Yuanchip's money goes into fundamental research or the world's most advanced processes — not into outdated tech."
"That wouldn't match Yuanchip's temperament."
Chen Jing pursed her lips and smiled. "A bit awkward, but I agree. Yuanchip should have an extraordinary temperament."
"Thanks for understanding," Su Yuanshan said, still resting with a smile at the corner of his lips.
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