Let’s Join Hands (3)
“I’ve heard there were some concerns, too. People were saying you might have paid too much.”
“The internal mood is completely different. Vice Chairman Kwon Hyeok-jun keeps begging me to introduce him to you, Mr. Miru. He says he wants to have an in-depth discussion about memory semiconductors.”
“I’ll have to decline.”
Vice Chairman Kwon Hyeok-jun was one of the greatest authorities in South Korea’s semiconductor industry. What was I supposed to say in front of a man like that?
Yoo Jae-ho sipped his tea and continued, “Your name has been coming up not only in business circles, but in political ones as well.”
So I had become a celebrity without even noticing.
Was I supposed to be pleased by that, or worried?
“That doesn’t sound like a good thing.”
Yoo Jae-ho nodded.
“From a politician’s point of view, they prefer conglomerates to keep control of management. It gives them a direct lever over domestic investment and hiring, and it also means they can summon people for a dressing-down whenever they want. Besides, the Hanjung Group was closely tied to the current administration and the ruling party. By now, the Blue House must be grinding its teeth.”
“Really?”
“As you know, the Blue House was firmly on Hanjung Group’s side in this merger. They even mobilized the National Pension Service and the Korea Development Bank for it.”
“And now that the result turned out this way, I’m guessing they’re feeling deeply humiliated?”
Yoo Jae-ho nodded again.
“And you struck at the bribery issue, too. For President Oh Young-hwan, that’s practically his Achilles’ heel.”
The bribery allegations tied to the shell foundation had briefly surfaced in the media, then somehow vanished as if they had never existed, with no investigation ever following.
The whole thing had been brushed off as a rumor. But the fact that the suspicion had been raised at all was fatal.
Because it was true.
“The National Intelligence Service, the prosecutors, and the other investigative agencies are probably looking into you, Mr. Miru.”
“That makes sense. But they won’t find anything if they dig.”
Fortunately, my life had been so ordinary it was almost dull. I’d gone through elementary school, middle school, high school, and university like everyone else, and I’d even served in the military without complaint.
“If someone digs hard enough, they’ll always find something.”
“And if they don’t?”
“Then they make something up, or they go after your family. It doesn’t even have to be the investigative agencies. If the media decides to move, burying one person is easy.”
I stared at him, dumbfounded.
“You don’t go after someone’s family.”
Yoo Jae-ho gave a faint snort of amusement.
“There are plenty of people in this world who don’t know something as obvious as that.”
“Come to think of it…”
There had been so many articles in the press about the Hanjung Group management dispute, but my name had never once been mentioned.
And that had remained true even after the general meeting.
“Did Yuseong Group help suppress it?”
Yoo Jae-ho nodded.
“Our PR team seems to have dropped a few hints.”
“I see.”
Yuseong Group’s influence in South Korea was beyond imagination. Since it was also one of the country’s biggest advertisers, the media had no choice but to mind its step.
It was fortunate I’d built that relationship in advance.
“In any case, confronting the administration isn’t a very good idea. That said, there’s no need to get too close to it, either.”
I was busy enough as it was. I had no desire to worry about politics on top of everything else.
But the economy and politics were never truly separate to begin with.
Even building a single factory required a mountain of permits and approvals, and if you wanted to enter a new industry or make an investment, you needed regulations lifted and support provided in all kinds of ways.
If the government couldn’t do that properly, then no matter how hard an individual company worked, its limits would eventually show.
The reason South Korea would fall behind in advanced industries and struggle ten years from now was largely because of the political establishment’s failures.
To be honest, the current president wasn’t the real problem.
The real trouble would begin with the next one.
Fortunately, there was still time to prepare, so I’d need to discuss that issue later.
Yoo Jae-ho changed the subject.
“The Hwaan Group seems determined to go all-in on renewable energy. It looks like they’re acquiring HJW Energy and trying to combine solar and wind power with hydrogen.”
As expected, his information was fast.
He looked at me and asked, “Did you advise them on that, by any chance?”
I didn’t bother denying it.
“Yes. I told them hydrogen would be the next generation’s energy source before long.”
“So that’s why Hwaan Construction stepped in.”
There was a hint of regret in his expression.
That was because Yuseong Group didn’t have an energy company. During the succession process, they had sold off their general chemicals division to the Hwaan Group.
They’d done it to concentrate more heavily on their core businesses.
“If hydrogen cars become popular quickly, what do you think will happen to the battery industry?”
Yuseong ES was one of South Korea’s three major battery companies.
“You don’t need to worry. The eco-friendly vehicle market will keep growing, and for a while, electric cars and hydrogen cars will coexist.”
Fuel cells were still bulkier and more expensive than batteries.
That meant hydrogen made sense for commercial vehicles like trucks and buses, while private cars were better suited to electric power. And even hydrogen cars still used batteries.
Yoo Jae-ho said with something like a sigh, “About ten years ago, my late father said something like this: ‘This is the real crisis. A global first-rate company is going to collapse. Yuseong may not be safe either. Within ten years, the business and products that define Yuseong will disappear. We’ll have to start everything anew.’”
And in fact, after that, Yuseong Group had completely reformed its organization and thrown itself into new industries. Because they’d moved so quickly then, they’d been able to grow into a world-class enterprise.
“The problem starts now. We have a lot to think about when it comes to future investments.”
I could say with confidence that the next ten years would be even more important than the last ten, if not more so. That was true for countries, companies, and individuals alike.
Yuseong Electronics was sitting on roughly 70 trillion won in cash.
On top of that, it generated 7 to 8 trillion won in operating profit every quarter. That meant it was earning at least 30 trillion won a year.
How many companies in the world could say that?
And yet its market cap had stalled at around 500 trillion won.
The reason was anxiety about the future.
Both semiconductors and smartphones were facing rapidly rising competitors. There were only two ways to respond.
One was to outrun the competition with overwhelming technological superiority. The other was to move into new industries.
“What do the experts say?”
“Vice Chairman Kwon Hyeok-jun told me this much: that it would be better to ask you than to listen to a hundred experts.”
I smiled inwardly.
The reason I’d become acquainted with Yoo Jae-ho was Dongwoo Precision.
On top of that, I’d also recommended a fabless company.
It was awkward to say it myself, but I had effectively provided a solution that not even a consulting firm worth a billion dollars would have given them for free.
Surely he didn’t think I’d done it out of charity or patriotism?
Investment wasn’t a zero-sum game where you divided up a fixed pie. In fact, if you invested together in related industries, you could make the pie bigger.
Continue Capital’s main focus was software companies centered around Snow Crash.
Yuseong Electronics was a hardware company built around semiconductors and smartphones.
Their businesses didn’t merely avoid overlapping; they were complementary. And Yuseong also wielded enormous influence in South Korea, with tens of trillions of won in cash as a bonus.
Having a company like that as a partner was reassuring.
After everything we’d gone through, including Dongwoo Precision and the chain of events around it, they had probably learned not to dismiss what I said.
There was no one who understood which industries would thrive in the future as well as I did.
“What do you think about entering the data center business?”
Apparently not expecting that, Yoo Jae-ho looked taken aback.
“Data centers?”
“Yes.”
Ever since smartphones appeared, PC sales had been declining year after year. In fact, households without a desktop computer were becoming more common.
Thanks to that, semiconductor companies tied to smartphone APs like AMR and CoolCom had been able to grow explosively.
So had Antel and ADM crashed and burned?
Not at all.
They were still doing great.
That was because server demand had exploded.
As smartphones spread, the amount of data traffic skyrocketed. So where was all that data coming from?
Servers.
And a data center was nothing more than a place that gathered those servers together.
Because data volume kept growing, new data centers were still being built endlessly all over the world.
Yuseong Electronics was one of the companies reaping those benefits.
That was why its stock price had climbed from 300 trillion to 500 trillion won.
To be fair, Yuseong Electronics didn’t have no data centers at all. But they were only used for internal purposes and as backup for Yuseong Electronics’ IT devices.
“You can’t just build a building and stuff semiconductors into it and call it a data center, can you?”
You needed software for operations: system management, information processing, security, and so on. If a data center went down or got hacked, the damage would be beyond imagination.
Big tech companies had spent decades building know-how in this field. It would be impossible for Yuseong Electronics to catch up now.
But…
“That’s not a problem. We have Snow Crash.”
“You mean the cloud company Continue Capital acquired. But Snow Crash doesn’t have direct experience operating data centers, either, does it?”
“That’ll be handled by Syd—no, by CEO Lucas. And Snow Crash is already breaking away from the Big Three and carving its own path. If Yuseong Group were to build its own data centers, I think we could make a good partner.”
After a moment of thought, Yoo Jae-ho spoke.
“I know data centers are a promising industry. The problem is the competition in the market, isn’t it?”
The strongest players in this field were NS and AMZ, as everyone knew. After them came Guble.
The cloud Big Three were still competing fiercely to build data centers.
Next were Jinibaba and WeChant.
Because they concentrated their business in China, they weren’t well known, but even on the strength of the domestic market alone, they held fourth and fifth place.
All five of those companies had higher market caps than Yuseong Electronics. They were, quite literally, the strongest in the world.
If Yuseong Electronics entered the data center business, it would have to compete with them.
“If Yuseong Electronics builds the data centers, Snow Crash can lease all of them, operate them, and share the profits. If you want to enter the market quickly, I’d recommend acquiring a related company.”
Yuseong Electronics could handle the hardware side—buildings, equipment, the works—while Snow Crash handled the software side.
“That’s not a decision to make lightly. If Yuseong Electronics enters the data center field directly, it’ll draw pushback from other companies.”
Yuseong Electronics produced DRAM and NAND flash, which meant it was one of the most important suppliers of components for data centers. If a company like that entered the data center business itself, the entire industry would be thrown into upheaval.
In other words, they would be competing with their own customers.
“Yuseong Electronics is already competing with its customers in several fields. And going forward, that competition will only intensify, not ease. If you keep worrying about other companies’ reactions, you’ll miss the right time to invest.”
Yoo Jae-ho wore a conflicted expression.
So I drove the nail in further.
“Communication speeds are only going to increase, and demand for data centers will grow without limit. The future is in the cloud. If Yuseong Electronics misses this market, it’ll end up as nothing more than one supplier among many.”