Finding Expectation and Excitement Amid Hell
While Kim Seong-ho was speaking with the staff of the Restructuring Headquarters, employees from Ilhyeon Electronics waited for him in his office.
"Group Leader Shin. Why do you think Headquarters Head Kim has summoned us?"
Vice President Jin Dae-hwang asked Managing Director Shin Yong-gyun, who headed the Development Group of the Wireless Business Division.
But Managing Director Shin Yong-gyun only shook his head, his expression making it clear he had no idea why Kim Seong-ho had called them in.
"I don't know either. But… I've heard a few things… and I can only guess it might be related to that."
"You've heard something? What is it?"
Jin Dae-hwang pressed him urgently.
Having spent so much time shuttling between the United States and Europe, Jin Dae-hwang had little sense of the company's current situation. That was why Shin Yong-gyun's mention of having heard something made him prick up his ears with keen interest.
Shin Yong-gyun glanced toward the door, then spoke in a low voice.
"Word is that the Restructuring Headquarters has received approval to restructure Ilhyeon Electronics. I heard they'll be carrying out the restructuring of Ilhyeon Electronics in the near future… so I'm carefully guessing that today's meeting might be about that."
"They're restructuring Ilhyeon Electronics?"
Jin Dae-hwang's face twisted with dismay.
"There's so much still left to do…"
Believing this was a critical juncture for Ilhyeon Electronics, Jin Dae-hwang could only taste bitterness. Shin Yong-gyun shared the same thought. The Wireless Business Division under his charge was watching headquarters carefully over a major decision. Yet now that they had been summoned to the Restructuring Headquarters, they had no choice but to set their hearts at ease.
"What can we do? Now that we're here, we have to find the most efficient way to keep the business running."
"All new investment will be cut off, won't it?"
"Not only new investment—plenty of projects already underway will probably be pulled as well."
Managing Director Shin nodded at Vice President Jin's words and filled him in on the state of the other affiliates.
"While you were overseas, Vice President Jin, the entire group has changed so completely it's as if heaven and earth were turned upside down. Affiliates have vanished, and there have been countless mergers among those that remain. Existing businesses have been withdrawn and staff reductions have followed… I don't think we'll escape the blade either."
"That makes sense. We carry the heaviest weight inside the group."
"Exactly. We have the largest number of employees among the affiliates, and the money we spend is… overwhelmingly greater. The Restructuring Headquarters will be determined to clean house."
When Managing Director Shin Yong-gyun finished speaking, silence settled over the office for a time. Now that they understood the group's current direction, they felt they already knew roughly what would be discussed here.
The silence stretched on—until the office door opened.
"Aigoo. I'm sorry to have kept you waiting so long."
The owner of the office, Kim Seong-ho, walked in. He approached Vice President Jin Dae-hwang and Managing Director Shin Yong-gyun, who had been waiting in their seats, with a welcoming air.
"A pleasure to meet you. I'm Kim Seong-ho."
When Kim Seong-ho extended his hand, Jin Dae-hwang took it first and offered his greeting.
"How do you do? I'm Jin Dae-hwang, serving as vice president."
Jin Dae-hwang clasped his hand and bowed politely; Shin Yong-gyun followed, taking Kim Seong-ho's hand in turn.
"I'm Shin Yong-gyun, in charge of the Wireless Business Division. I look forward to working with you."
"Hahaha. I'm the one who should be saying that. Please, have a seat."
Kim Seong-ho invited the two men to sit and took the chair opposite them. He instructed the Restructuring Headquarters staff who had followed him in to bring tea, then set a leather-bound diary on the table.
Jin Dae-hwang and Shin Yong-gyun simply stared at Kim Seong-ho without speaking. It felt as though they had been dragged to a slaughterhouse.
Kim Seong-ho looked at the two tense men, smiled, and spoke first.
"It seems my invitation for the two of you to come here came as something of a surprise."
Having opened the conversation, Kim Seong-ho flipped open the leather diary. Jin Dae-hwang and Shin Yong-gyun's eyes drifted automatically to the open pages as he spoke, but they quickly looked away. Nothing was written in the open diary.
To Kim Seong-ho, however, it was different.
The Wireless Business Division advancing into Europe… the Memory Business Division considering the acquisition of Rambus…
Kim Seong-ho reviewed the contents of the leather diary once more, then turned his gaze back to the two men. Still smiling at their apparent tension, he continued.
"I asked the two of you here for no other reason than this: before the Restructuring Headquarters proceeds with the restructuring of Ilhyeon Electronics, I wanted to inform you of the direction first."
"So it really is about restructuring."
Jin Dae-hwang hung his head, his face drained of spirit. He had expected it, yet hearing it from Kim Seong-ho's own mouth left him feeling hollowed out.
Kim Seong-ho looked at him and spoke of what was written in the leather diary.
"Vice President Jin, you're currently pursuing the acquisition of Rambus, which holds memory-related patents, correct?"
Jin Dae-hwang nodded and answered.
"Yes. We're handling it under the surface for now."
"I'd like you to cancel that."
"So… the acquisition really is impossible."
Jin Dae-hwang closed his eyes for a moment, picturing the painful future that awaited the Memory Business Division. For several years they had been locked in fierce battles with Rambus over patents. A company with no factories of its own, Rambus had joined hands with an American firm and tormented Ilhyeon Electronics. That was why Vice President Jin had proposed simply buying Rambus outright and had gone to the United States to conduct under-the-table negotiations. Now that the acquisition had become impossible, he could not help worrying how much more Rambus would harass them going forward.
Kim Seong-ho knew exactly what Jin Dae-hwang feared. The leather diary recorded it in full. He glanced down at the diary and spoke toward Jin Dae-hwang.
"I understand Rambus holds the patents for DDR, DDR2, and DDR3, as well as GDDR 1, 2, 3, 4, and 5. Is that correct?"
"That's right. Because of that, they file lawsuits against the semiconductors we produce at every turn, claiming patent infringement. The patent fees are considerable as well."
"So you'd rather just acquire Rambus."
Kim Seong-ho nodded as if he understood, then addressed Jin Dae-hwang.
"But from now on we're changing direction. Scrap the plan to acquire Rambus and pour everything into accelerating DDR RAM development. We concentrate all our capabilities on DDR RAM and NAND flash memory."
"If we focus on DDR and NAND, what happens to Rambus?"
"We abandon it. And we scrap everything we've developed so far. We concentrate on DDR RAM and NAND."
Vice President Jin Dae-hwang, looking flustered, tried to persuade Kim Seong-ho.
"Right now in the United States, Rambus and Intel are working together to steer the memory market toward Rambus. If we abandon Rambus development at a time like this, we could end up completely left behind in the memory ecosystem."
"No. That won't happen. Rambus will fail to achieve commercialization."
"How can you be so certain of that?"
Jin Dae-hwang stared at Kim Seong-ho with an expression of pure incomprehension. When it came to memory, Jin Dae-hwang was the greater expert. To hear someone speak with such certainty about the future of the memory field right in front of him left him looking at Kim Seong-ho in bewilderment.
Yet Kim Seong-ho's confidence was not baseless. He had the experience of his previous life, and he had the leather diary. Those two things gave him his assurance, and on that foundation he was laying out, in a powerful tone, the path the Memory Business Division of Ilhyeon Electronics must take for the memory expert Jin Dae-hwang.
"Trust me. We abandon Rambus and throw everything into DDR."
"When you say 'everything,' what exactly…"
"The current situation is flowing very much in our favor."
At Kim Seong-ho's words, Jin Dae-hwang still wore a look of incomprehension. He simply could not see what situation was supposed to be favorable, or how. Companies were collapsing in droves and the exchange rate was soaring. Prices were throttling the common people, and the streets were packed with those cast out of their jobs. Kim Seong-ho was calling a situation utterly unsuited to the word "good" favorable.
Kim Seong-ho frowned slightly at Jin Dae-hwang's stare, then smiled faintly and spoke.
"It means a situation has been prepared for us in which we can lower the price of the DDR we produce and still hold out."
He continued explaining to the flustered Jin Dae-hwang.
"Pour everything into DDR production and flood the market with DDR RAM. And even if the price drops because of that flood of DDR RAM, don't react. After all, even if prices fall, the higher exchange rate means we won't actually be taking a loss."
"Headquarters Head… is there a reason for doing that?"
"Of course there is a reason. Two of them, in fact."
"Two reasons?"
At the news that there were two reasons rather than one, Jin Dae-hwang looked startled. Kim Seong-ho smiled at the corners of his mouth and continued.
"First, through a chicken game we can force our competitors out."
Kim Seong-ho raised one finger as he spoke.
"Because memory has become profitable, companies have sprung up like mushrooms after rain. Japanese, Taiwanese, American, and even European firms—there are more than you can count on both hands. We need to clear them out so that when the industry revives later, there will be more for us to eat."
"You're saying we should be the ones to start a chicken game?"
"That's right."
Kim Seong-ho nodded and spoke to the astonished Jin Dae-hwang.
"Even if we start a chicken game, we're in a situation where we won't take a serious hit."
Jin Dae-hwang stared at Kim Seong-ho with his mouth open. The idea that Kim Seong-ho would try to exploit the very danger of the soaring exchange rate felt absurd to him.
"The exchange rate will climb even higher than it is now. We use that to throw a chicken game into the market. And so that we can carry out the chicken game smoothly, we won't skimp on investment. We'll execute one trillion won in facility investment within this year, and over five years we'll invest ten trillion won to expand facilities and support technology development."
"Ten trillion?"
Jin Dae-hwang's eyes widened to the size of lanterns. He had expected them to tighten their belts, withdraw businesses, and block investment—yet here was talk not merely of increasing investment but of executing the enormous sum of ten trillion won over five years. He could not help but be thrown into confusion.
Kim Seong-ho addressed the still-reeling Jin Dae-hwang with the second reason.
"If DDR memory is supplied to the market this cheaply, Rambus DRAM will ultimately fail to take root. That's why I told you not to acquire Rambus—and that is precisely the second reason we must flood the market with DDR memory."
"Rambus won't take root in the market. That…"
Jin Dae-hwang stared at Kim Seong-ho in astonishment. If, as Kim Seong-ho said, DDR memory became cheap, the market was highly likely to ignore Rambus. He knew full well that no matter how superior the performance, performance lost its power in the face of overwhelming price.
Clear out the competitors and drag the standard in the direction they wanted. Flooding the market with DDR memory like a bombardment would yield two advantages at once.
"If that happens, the likelihood that things will go as you say, Headquarters Head, looks high. But didn't you say there would be a restructuring? How can you invest ten trillion while carrying out a restructuring…?"
When Jin Dae-hwang asked carefully, Kim Seong-ho offered him a light smile and answered.
"Restructuring doesn't only mean cutting people and shrinking investment. Leading a company in a more efficient and better direction—that can be considered true restructuring. In that sense, investing boldly when the time is right is also part of the Restructuring Headquarters' job."
"Heh heh."
Jin Dae-hwang could not stop the empty laugh that slipped out of him unbidden. He had come here with any number of thoughts, yet he had been confronted with a result he had never imagined, and the hollow laughter escaped before he knew it.
Kim Seong-ho watched Jin Dae-hwang's empty laugh, then turned his gaze to Shin Yong-gyun seated beside him.
"Managing Director Shin."
"Yes."
"I understand the Wireless Business Division is agonizing over entry into Europe. Is that correct?"
Shin Yong-gyun glanced briefly at Jin Dae-hwang, then nodded slowly.
"Yes. Europe uses a different communications standard from ours and from the United States. That means even if we produce the same model, we have to manufacture a separate line for Europe. Because of that, some people are even saying we should simply give up on the European market."
"Just as I thought."
Hearing that the Wireless Business Division was struggling exactly as written in the leather diary, Kim Seong-ho closed the diary and spoke.
"The first thing I want to tell you, Group Leader Shin, is this: do not give up on the European market."
"Don't give it up?"
"Yes. In the end, the European market will become an important customer for us. If we abandon it, we will be losing one of our two wings."
"Headquarters Head… the problem is manpower and funds."
"I'll take care of that."
Kim Seong-ho offered a solution to Managing Director Shin Yong-gyun, who now wore the same expression Jin Dae-hwang had worn moments earlier.
"The Restructuring Headquarters has drawn up plans to support not only the Semiconductor Business Division of Ilhyeon Electronics but the Wireless Business Division strategically as well. We intend to inject more than five hundred billion won into the Wireless Business Division. And every bit of that investment is to be used for producing European products."
"All five hundred billion for Europe?"
Shin Yong-gyun's eyes grew even wider than Jin Dae-hwang's had a moment before. Looking only at the raw figures, five hundred billion might seem laughable next to the semiconductor division's ten trillion. Yet considering how completely different the scale of equipment costs was, the five hundred billion earmarked for the Wireless Business Division was by no means small. And if every last won of that five hundred billion was to go solely into European product manufacturing, Kim Seong-ho's decision went beyond surprise and approached sheer astonishment.
Kim Seong-ho looked back and forth between Jin Dae-hwang and Shin Yong-gyun and spoke.
"The restructuring that cuts the group's excess fat and tightens the belt is finished. From now on we will change direction toward expansion. This is the second restructuring—and Ilhyeon Electronics will be the beginning of it."
"A second restructuring?"
Jin Dae-hwang and Shin Yong-gyun wore expressions that said they had no idea how to react to Kim Seong-ho speaking of expansion while countless companies were shutting their doors and workers were being driven from their jobs.
In a world that was turning into hell, the Restructuring Headquarters of the Ilhyeon Group alone was looking at that world wrapped in expectation and excitement.