Yokohama Electron (2)
As soon as Han Miru left, Yoo Jae-ho immediately called Vice Chairman Kwon Hyeok-jun over.
The elderly doctor who had been in the R&D Center came running at once.
"Do you have something you want to discuss?"
Yoo Jae-ho told him about his conversation with Han Miru.
As expected, Vice Chairman Kwon was stunned.
"You want to acquire Yokohama Electron?"
"Yes."
Yokohama Electron was one of Yuseong Electronics' main trading partners, which meant they knew the company inside and out.
After a long silence, Vice Chairman Kwon spoke again. "Even if it's the same kind of equipment company, YokoElec is in a very different situation from Dongwoo Precision."
"I know."
An acquisition was never the end of the story. What came after mattered even more.
Dongwoo Precision had been nothing more than a small Korean equipment company. Even if it had gone under and vanished, no one would have cared.
That was why the acquisition itself, and the investment that followed, had been relatively easy.
But Yokohama Electron was the world's second-largest semiconductor equipment company, a giant whose acquisition would be entangled in every kind of complicated issue imaginable.
"Even if we do acquire it, we won't be able to exercise control over the company or gain access to its core technology."
People often assumed that securing a majority stake meant they could do whatever they wanted with a company, but reality was far messier than that.
If it had been that simple, Kionos would have been merged into France's SPME long ago.
A national strategic industry like semiconductors was bound up in all kinds of legal restrictions. In the end, even if the acquisition succeeded, they would still have to abide by the Japanese government's controls and preserve the company's current degree of independent management.
"U.S. regulations are another variable."
The biggest risk for any semiconductor company was American regulation.
If exports of EUV equipment to China had been approved, ESML's stock would already be 30 percent higher than it was now. But under U.S. restrictions, ESML had been unable to ship even a single machine to China.
"Yokohama Electron's explosive growth was supported by massive Chinese government subsidies. China has been pressuring them to build more factories in exchange for more funding, and the United States doesn't like that one bit."
If the U.S. moved to impose yet another round of restrictions, Yokohama Electron would take a tremendous hit.
"What about the synergy if we acquire it?"
"It would actually backfire."
"…"
Yokohama Electron's equipment was delivered to every fab in the industry.
That meant every semiconductor company was one of its customers. So if Yuseong Electronics acquired it, would the competition be happy about that?
PSMC, Antel, Microk, and the rest would all push back hard.
It would be difficult to switch suppliers overnight, but they would start looking for alternatives wherever they could.
The semiconductor market was holding onto a tense balance right now. Not just companies, but entire nations were tangled up in it. Touch the wrong nerve, and...
"It'd be like kicking over a hornet's nest."
Korea and Japan. The United States and China. Cross-strait relations, and everything else besides.
If this were an acquisition by a third party, that would be one thing. But if Yuseong Electronics was the buyer?
Would the other players really just sit there and watch?
On top of that, Yuseong Electronics had already entered the data center business and invested in Cosmic Store, turning even otherwise friendly companies like AMZ, NS, and Guble into enemies. They were already being hemmed in from every direction.
It was becoming a headache.
Why the hell did he want to acquire this company?
No matter how I thought about it, I couldn't understand the reason behind wanting Yokohama Electron.
"To be honest, Yuseong Electronics has no reason at all to go after this acquisition. But one thing is certain."
"What's that?"
"There is no downside to listening to Chairman Han."
At that, Yoo Jae-ho let out a faint laugh.
He was right.
Thanks to Han Miru's advice, the Yuseong Group as a whole had earned enormous profits.
What would have happened if they hadn't acquired Dongwoo Precision?
When Yuseong Electronics first bought Dongwoo Precision, everyone had reacted with disbelief. Why would a giant like Yuseong Electronics buy what looked like a tiny mom-and-pop outfit?
But everything changed once the company unveiled its contactless NIL technology.
If it succeeded, NIL could be used below the 7-nanometer node, and costs could be cut dramatically.
At that point, there would be no need to depend on ESML's EUV tools, each of which cost two to three hundred million dollars apiece. That was why the acquisition was now being hailed as the Yuseong Group's best M&A move yet.
Even if this next deal ended up losing money, it would be nothing compared to what they had already gained.
"There must be something we don't know. Please investigate Yokohama Electron thoroughly."
"Understood."
After hearing about me from someone else, David asked me a question.
"Are you serious?"
"It was too unfunny to be a joke. More importantly, you already knew about it? So the rumor's already spreading through the industry?"
"It was the only way Softbox Group could cover its losses."
I asked for his opinion.
"Then what do you think about the acquisition?"
"If I were you, I wouldn't touch it."
"Why not?"
He answered without hesitation.
"It's too expensive."
There were many ways to value an unlisted company. Depending on which method you used, the price could vary wildly.
By contrast, public companies had one much firmer benchmark.
The stock price.
What matters is the price. A bad company bought cheaply is a good deal, and a good company bought dearly is a bad one.
He was right.
Yokohama Electron was unquestionably a good company. The problem was that everyone knew it was a good company.
And that was already reflected in the stock price.
If they piled a premium on top of that, they might end up buying the company right at its peak.
Do you absolutely have to acquire that company?
"Yes."
Then you should do it.
"You aren't even going to ask why?"
Won't you tell me when the time comes?
It was convenient, working with him for so long.
"You know me too well. Analyze it and send me the materials."
Understood.
I ended the call.
Now I only needed one more person to agree.
Dongho and I were receiving a visitor at the office.
Dongho, my senior, bowed deeply and greeted her with due respect.
"It's been a long time."
"It really has. Have you been well?"
"Yes. And you too, Princess... no, Executive Director?"
"Of course."
She looked around the office.
"It's a lot bigger than it used to be. And there are a lot more people."
"Back then, we didn't even have employees. It was just the two of us."
At my words, she said it with a trace of nostalgia.
"Still, those were fun times."
Dongho nodded as if he agreed completely.
"That's true. I think that was the most fun I've ever had too."
People always tended to romanticize the hard times once they'd succeeded.
We sat down in the meeting room, and an employee brought in coffee.
I looked at the woman sitting across from me.
Brown hair, dark skin.
Her name was Sarah Avery, and she carried an unmistakably international air about her. She was the head of Saudi Arabia's PIF overseas investment division, as well as the chief investment officer of Rush Fund.
We kept in touch from time to time for work, but it had been a long while since I'd seen her in person.
"This is the first time since the year-end party."
I remembered her in a dress at that party. She had been so beautiful it was hard to look away.
Well, she was just as pretty now.
"Have you been well?"
She took a sip of coffee and said, "I've been busy working."
Flying around the world on the Saudi royal family's private jet and executing investments, of course.
For the record, pension fund officials were welcomed almost everywhere they went. There was no country in the world that liked foreign capital less than its own money.
And that was especially true for Saudi Arabia's sovereign wealth fund.
Thanks to that, her name was well known in financial circles. Among Saudi women, she was probably the most famous abroad.
"You look like you've been busy too, Miru."
There had certainly been plenty going on since the beginning of the year.
I had crushed Pether and fought lawsuits against Enple and Guble.
"Did you look over the materials?"
"Yes. I read them on the way here."
I had sent her the materials David had put together first, because it would make the conversation easier.
"If you're selling off Yokohama Electron, then the losses in the Insight Fund must be enormous. I've even heard some investors are planning to walk away."
The Insight Fund was worth roughly one hundred billion dollars.
Half of it had come from the Softbox Group, and the other half from pension funds, big tech companies, and global financial institutions around the world.
Originally, the Saudi sovereign wealth fund, PIF, had been planning to join as well and increase the total size of the fund even further, but they had pulled out when they teamed up with Continue Capital to create Rush Fund.
"I'm glad I listened to you and didn't invest in the Insight Fund."
"Well..."
The truth was, though, that I bore a great deal of responsibility for the state the Insight Fund had fallen into.
Like someone picking only the sugar candies out of a bag of military crackers, Rush Fund had gotten to the best companies first. On top of that, Snow Crash had swallowed the cloud market whole, and Lex had gone under because of it.
And Lex's bankruptcy was only the beginning. The entire portfolio held by the Insight Fund was now shaking apart.
If it hadn't been for me, Softbox Group wouldn't have suffered losses this severe, and Yokohama Electron probably wouldn't be on the market right now.
Thinking about that made me feel a little guilty.
"So you're saying you want to form a consortium and acquire Yokohama Electron together?"
"Exactly."
"As you know, this is completely different from investing in a startup."
Acquiring a manufacturer meant buying the people and the factories along with it. You couldn't simply fire everyone and shut the plant down just because the goods weren't selling.
If you made one wrong move, it could turn into a money-eating monster.
But...
"Yokohama Electron is an indispensable company in China's semiconductor leap forward."
"What if we don't do it?"
"Then Continue Capital and Yuseong Electronics will have to handle it alone."
"Looks like you've already made up your mind."
"Yes."
"The competitors won't just sit still, will they?"
"Exactly why we're doing it. It's the perfect chance to land a blow on them."
Sarah thought for a moment, then said, "All right. In that case, we'll join you."
"Good call."
"What's the plan?"
"First, I'm thinking of taking a trip to Japan."
"Japan?"
"Yes. I want to meet Chairman Song Gazuki and take a look around Yokohama Electron too."
"I see."
Sarah nodded, then seemed to remember something and asked, "But is it okay for you to go to Japan?"
"What? Is there some reason I can't?"
"Didn't the Japanese prosecutors already have you on their radar because of the Chairman Samara escape incident?"
"Ah..."
Right.
That had happened, hadn't it?
Before my business trip to Japan, I contacted Chairman Samara.
He answered cheerfully.
"You must be busy. What brings you to me?"
"I just called to check on you. I hear you've been busy too, Chairman."
It wasn't official, but he was currently serving as an adviser to Nextrogen's Saudi branch.
The U.S. plant couldn't even keep up with domestic demand, so they were building a new factory in Jeddah, Saudi Arabia, with annual capacity for 100,000 units.
All the money needed for that project had been provided by PIF.
Nextrogen was a hydrogen car platform company.
Since it only made the platform itself, it absolutely needed to work with existing automakers if it wanted to build complete vehicles.
You might wonder what automakers the Middle East had that would justify building a plant in Saudi Arabia, but the plan was to export most of the output to Europe.
Jeddah was a city on the Red Sea. Once a ship passed through the Suez Canal, it could reach Europe directly.
"It's all thanks to you."
"Shouldn't you be taking it a little easier?"
He had been stripped of the chairmanship and had 2 billion yen in bail forfeited, but he had still made enough money to last several lifetimes.
With that kind of wealth, he could have spent the rest of his life playing and doing nothing, but apparently he still wanted to work.
"Money isn't the issue. This is my own kind of revenge."
"Revenge?"
"Kionos is sinking, and if I keep thriving, won't those bastards be sick to their stomachs? Making them regret, for the rest of their lives, that they threw me out of the chairmanship—that's a man's revenge. Ha ha!"
"…"
People usually call that sort of thing a grudge.
I had thought he was the broad-minded type. Turns out he was a man overflowing with petty resentment.
"I've been hearing about you. Where are you planning to invest this time?"
"I actually called because of that."
He had been chairman of Japan's largest semiconductor company, Kionos, for more than ten years. If anyone knew Yokohama Electron better than anyone else, it would be him.