Chairman Yoo Jae-ho (2)
CMIC, or Chongxin International Integrated Circuit Manufacturing, was China’s largest foundry company. It was listed on the Hong Kong Stock Exchange, but in practice it was a state enterprise backed by the Chinese government.
Semiconductors were the backbone of a cutting-edge industry tied directly to national security, yet China still depended on imports for most semiconductor components.
That was why, five years ago, China had declared a semiconductor push in the name of domestic self-sufficiency. For a latecomer, the fastest way to secure technology was through mergers and acquisitions.
One of the companies they had swallowed whole was Dongwoo Precision.
After CMIC acquired Dongwoo Precision, it invested aggressively in developing NIL equipment technology.
When EUV already held the technical advantage, there was no reason to pour huge sums into a technology that might never even work.
But China’s situation was a little different.
The United States, wary of China’s advance in advanced industries, had begun imposing all kinds of sanctions. The U.S. Department of Commerce banned American companies from dealing with Chinese semiconductor firms and tightened controls on semiconductor equipment exports.
American semiconductor technology was the best in the world.
Especially in manufacturing-related core technologies, where the United States held so many of the key patents, Chinese semiconductor companies took a severe hit.
Ironically, those measures only fueled China’s hunger for semiconductor independence.
Even Lin Yuxiang, the Chinese president, had gone so far as to say, “China’s future depends on semiconductors. We must climb to the summit of global semiconductor technology as quickly as possible.”
Under the government’s full support, Chinese semiconductor firms felt the need to develop alternative technologies that would avoid American and European patents. That was why they invested in Dongwoo Precision.
At first, the plan had been to use it for non-memory semiconductors, but during development they discovered the possibility of applying it to system semiconductors as well.
Once Dongwoo Precision solved NIL’s technical hurdles first, other semiconductor manufacturers rushed into development too.
Yuseong Electronics was one of them. And that was how NIL eventually became the standard technology for processes below 5nm.
But then…
Watching all of this unfold in silence, CMIC claimed Yuseong Electronics had infringed on its core technology and filed a patent lawsuit.
The amount in dispute was a staggering $100 billion.
It became known worldwide as the semiconductor lawsuit of the century.
The result?
CMIC’s complete victory, and Yuseong Electronics’ total defeat.
In a lawsuit that dragged on for three years, Yuseong Electronics ended up agreeing to pay CMIC $20 billion in damages and another $30 billion in royalties over ten years.
In Korean won, that came to an astronomical 55 trillion won.
Having won the patent suit and become the monopoly in lithography equipment, CMIC went on to bully Korean semiconductor companies with more patent suits and hardball tactics, pressuring Yuseong Electronics and LK Unix.
It stood as one of the symbolic events that defined China’s semiconductor rise.
From that point on, Chinese semiconductor companies surged ahead, and China overtook South Korea and Taiwan to become the world’s second-strongest semiconductor power after the United States.
The interesting thing was this: the company that had first filed the patent for the NIL fine-process core technology at the center of that lawsuit was none other than Dongwoo Precision.
There might have been ways to work around the other patents, but this one supposedly had no way around it at all.
In the end, XRT Semicon’s acquisition of Dongwoo Precision had been the trigger for China’s semiconductor ascent and Korea’s semiconductor collapse.
If Chairman Yoo Jae-ho knew that, he would do whatever it took to acquire Dongwoo Precision. The problem was that, at this point in time, I was the only person who knew it.
“I know Dongwoo Precision has excellent NIL technology. NIL is simpler than EUV and cheaper to mass-produce. But what fine processes need is EUV.”
While EUV drew circuits with light, NIL was more like printing them, almost like silk-screening.
Because it was a method that made direct contact with the wafer, it carried a high risk of wear and error during the process, which was why it wasn’t used for fine processes.
Chairman Yoo Jae-ho continued.
“There are plenty of companies with good technology. How useful that technology actually is—that’s a different matter.”
Anyone could come up with a good idea. But of all those ideas, how many ever made it to commercialization?
Even technologies that were praised today had often been dismissed as hopeless when they first appeared. Turning an idea into a technology required time and money—enough of both.
For Dongwoo Precision’s NIL technology to be used in fine processes meant it had solved that technical hurdle.
Which meant the question was: how, exactly, had they solved it?
...
How was I supposed to know that?
Even if I knew the future, it wasn’t like I’d know that level of detail.
All I knew was that NIL would beat EUV and eventually become the technological standard. And that Yuseong Electronics would get hammered by CMIC with a patent lawsuit because of it.
I couldn’t exactly confess to being a regressor in this meeting, so I had to convince him with words alone.
“A great many technologies in use today were once thought too difficult to commercialize. Take lithography equipment itself. The established players dismissed EUV as impossible to commercialize and gave up on R&D. What happened in the end?”
Back then, Canon and Nikon, once powerhouses in lithography equipment, had neglected immersion ArF development and fallen behind in the market.
CMIC began using NIL for system semiconductor production a year and a half after acquiring Dongwoo Precision.
In other words, the equipment would emerge three years from now, and two years after that the technical hurdles would be solved, allowing it to be used even in fine processes below 10nm.
Yuseong Electronics’ semiconductor technology was already several steps ahead of CMIC’s. If Yuseong Electronics acquired Dongwoo Precision and pushed development themselves, that timeline would be shortened considerably.
There was always the possibility that history would shift and the technology would fail to develop, but even then, there would be no loss.
At the very least, they wouldn’t end up owing CMIC $50 billion in a patent suit.
But that had not happened yet.
I thought back to something I had learned in school.
Companies didn’t fail because they lacked good plans. They failed because they had too many good plans.
Some companies went under because they didn’t invest at the right time. Others went under because they invested too much. Dongwoo Precision was exactly that kind of case.
Every company had limited capital, manpower, and time.
A manager’s job was to find the most efficient way to use those limited resources.
In my first life, Chairman Yoo had overlooked Dongwoo Precision, and because of that, Yuseong Electronics had fallen into crisis.
So what would happen this time?
After seeming to consider it for a moment, Chairman Yoo smiled.
“I enjoyed our conversation today. Unfortunately, I should get going now. I hope we can meet again sometime.”
There was no guarantee there would be another chance.
He was the one in a position to decide whether a meeting would happen at all. I wasn’t. So I had to move him right here, right now.
As Chairman Yoo rose first, Sung Yoon-ah stood as well and bowed her head.
“Thank you for making the time, Chairman.”
“Not at all. I enjoyed it as well.”
He held out his hand to me, and I took it and said, “Please give today’s conversation some serious thought.”
Chairman Yoo nodded.
“I understand. I’ll review it carefully.”
Whether he would really review it at all, and if he did, how closely, was impossible for me to know. I couldn’t see into his mind.
So I added one more line.
“It might turn out to be the nail in the horseshoe.”
I felt his hand go still.
* * *
We left in the car from the underground parking garage, just as we had come.
Once we were out of Yuseong Town, Sung Yoon-ah let out a long breath as if she had been holding it in the whole time.
“Haa!”
It must have been a fairly difficult meeting, because she looked half-drained.
After calming herself for a moment, Sung Yoon-ah asked me in a tone that sounded almost accusatory, “You didn’t come here just to bring up Dongwoo Precision’s acquisition, did you?”
“Yes.”
“So everything was planned from the beginning. You bought Dongwoo Precision’s corporate bonds at a bargain price from the start, intending to propose an acquisition to Yuseong Electronics, didn’t you? If Yuseong Electronics bought the company, it would be saved, and then the bonds would be worth face value again.”
“That’s right.”
“You bought Dongwoo Precision’s bonds too, Miru?”
“Yes. Along with my friend’s purchase.”
In truth, 10 billion won of the 13 billion was my own money.
By now, Sung Yoon-ah had her lips puckered.
“Mm. You’re not angry, right?”
“I’m not angry.”
“...”
She looked angry, though.
“Why didn’t you tell me ahead of time? You startled me.”
I gave a sheepish smile and apologized. “Sorry.”
If my actions led Chairman Yoo to take a dislike to her, it would put her in an awkward position. Unlike me, who could simply avoid seeing him again, she would still have to deal with him in the future.
To reassure her, I said, “Because of today, Chairman Yoo won’t think badly of you, Yoon-ah.”
“Why not?”
“Because Dongwoo Precision is a company worth that kind of attention.”
I had good reason for saying that with confidence.
China’s semiconductor push was being carried out under a carefully laid strategy. They had acquired Dongwoo Precision because they believed it was worth it, and that value had already been proven.
So if CMIC could see it, why wouldn’t Yuseong Electronics?
After thinking it over for a moment, Sung Yoon-ah nodded slowly.
“Then that’s a relief. But I had no idea you knew that much about semiconductors.”
I shrugged.
“I studied.”
In reality, I had sweated buckets pretending to know anything at all about a field I barely understood.
“Thank you. If it hadn’t been for you, I don’t think I would have been able to meet him.”
Sung Yoon-ah smiled.
“I’m glad I could help. I was so nervous that I’m suddenly starving.”
It was about time for dinner anyway.
“Come to think of it, I said I’d treat you to a meal. What do you want to eat? I’ll buy anything.”
“I don’t know Gangnam very well. Do you have any recommendations?”
I answered without much thought. “There’s a place nearby that makes great tteokbokki.”
At that, Sung Yoon-ah looked incredulous.
“Tteokbokki? I took half a day off work to come here, and now you want to make me fill up on tteokbokki?”
The moment she said it, I knew I had messed up.
I hurried to recover. “Then how about steak? There’s a place I sometimes go with friends, and it’s good.”
Sung Yoon-ah’s expression softened a little.
“Hmm, where is it?”
“Outback.”
“...”
She liked that, right?
A moment later, as if something had just occurred to her, she asked, “But what did you mean by that thing you said earlier?”
“What thing?”
“The nail in the horseshoe.”
“Ah! It’s just a Western proverb.”
“What does it mean?”
“If there’s no nail, you can’t fasten the horseshoe. If you can’t fasten the horseshoe, you lose the horse. If you lose the horse, you might lose the war, and if that happens, the country could fall.”
“Oh! So it means you should take care of the small things if you want to handle the big ones.”
“Exactly.”
Sung Yoon-ah tilted her head.
“But the moment you said it, Chairman Yoo’s expression changed completely.”
I played dumb.
“Did it?”
She nodded.
“Yes. He looked totally shocked.”
Well, of course he had.
The proverb had become famous because, after CMIC beat Yuseong Electronics in that century-defining patent lawsuit, Chairman Yoo had included it in an email to all employees.
Given that source, the phrase would carry a much deeper meaning for him.
Would those words really move his heart?