Yokohama Electron 8

Chairman Song Gazuki held a press conference and voiced his regret over his failed investments. The losses hidden inside the Insight Fund, exposed by the collapse of Workspace and the bankruptcy of Lex, were far more severe than anyone had expected.

For years, the Insight Fund had been buying up unlisted unicorns at lofty multiples, convinced that profits would naturally follow once those companies dominated their markets. But of the firms it had backed that way, only about 15 percent were still capable of surviving on their own; the rest would struggle to stay alive without fresh capital.

Song was reportedly considering selling off some holdings or taking them public, but it did not look as though cashing out would be easy anytime soon. Investors had begun to scrutinize profitability with a cold eye, and with market conditions worsening, the IPO market had frozen solid.

Softbox Group had also borrowed massive sums from banks against its own assets in order to invest in the Insight Fund. Now, with asset values collapsing, even its financial health was being threatened.

"I am ashamed that I grew complacent after making such huge profits. Right now, I am painfully reflecting on the losses we have suffered," Song said, adding that he would restructure the entire fund and devote himself to restoring profitability. He also announced that planned investments would be cut to 20 percent of their original scale, and that the first asset to be sold in order to raise funds would be Yokohama Electron.

Yokohama Electron was Japan's largest semiconductor equipment company and the world's third largest; the Insight Fund held a 36 percent stake in the company. Song's plan was to sell that stake and secure roughly 4 trillion yen in cash.

Whether the Insight Fund could ever regain its former glory remained to be seen.

Chairman Song Gazuki's press conference shook Japan to its core.

Yokohama Electron was a giant company that ranked among the top ten by market capitalization on the Nikkei. Continue Capital officially announced its intention to acquire it, and joined forces with Yuseong Electronics and the Saudi sovereign wealth fund to form the CYP Consortium.

Yokohama Electron had long been the pride of Japanese manufacturing. Even as one electronics company after another went under, it kept growing steadily and rose to become a truly global business. So when word spread that its ownership might soon change hands, Japanese investors and citizens alike could only lament.

Yokohama.

It was the largest city in Kanagawa Prefecture, just outside Tokyo, and the second most populous city in Japan after the capital. By train, it was ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠about an hour from Tokyo.

Yokohama Electron HQ stood on the outskirts of the city, far from the downtown core, alongside its factory complex.

I met a man in his fifties there.

I greeted him politely. "Pleased to meet you. I'm Han Miru."

"It's a pleasure. I'm Nakazato Yoshiharu."

Because he didn't speak English very well and I didn't speak Japanese very well, we had an interpreter with us.

The interpreter was a man about my age.

"I'm Nakazato Hajime. It's an honor to meet you."

As his name made clear, he was Nakazato Yoshiharu's son. I had heard he studied abroad in England, and maybe that was why his English lacked the usual Japanese accent.

We exchanged greetings and took our seats. Seeing him in person, I thought I understood why Chairman Samara had called him a "samurai-like man."

He had a hard, inflexible air, the kind of face that seemed as though no joke would ever land with him. Deep lines and tightly pressed lips hinted at a stubbornness that had been worn into him over the years. He looked less like a corporate executive than a craftsman who had spent his whole life mastering one discipline.

Yokohama Electron had been founded by his father, and he had inherited the chairmanship as the second generation. He had truly devoted his entire life to one field and one field alone.

He almost never appeared in public and was famous for refusing interviews with the press. The only reason I was able to meet him like this was because Chairman Song Gazuki had introduced us.

"Chairman Song told me a little about you, but you're much younger than I expected. What brings you here today?"

"I'm here to look into the company."

I had been a rather successful analyst once upon a time, after all. I used to visit companies all the time. I could probably pay for a small truck with all the instant coffee I had been served on those visits.

"Would it be all right if I took a look around the factory?"

He cut me off at once. "I'm sorry, but we do not allow factory tours for outsiders."

So even Continue Capital wasn't enough to get a free pass. He really wasn't giving an inch.

For the record, that rule applied to everyone. Analyst, major shareholder, it didn't matter; if you weren't an employee or directly connected to the company, you weren't getting in.

"I've heard Yokohama Electron is extremely strict about security. I suppose that's true."

"Business is war. Exposing your weapons and strategy to the other side would be foolish. Our company speaks only through its products."

"Lately, though, the Chinese equipment makers have been closing the gap fast."

China was putting a great deal of effort into localizing not only semiconductor finished goods, but also materials, components, and equipment.

Chairman Nakazato let out a snort. "Anyone can imitate the surface appearance. But core technology and decades of accumulated know-how cannot be copied. By the time they catch up to us, we'll already be several years ahead again."

Every word carried the pride he felt in his company's technology.

And with good reason. Even during difficult times, Yokohama Electron had never skimped on R&D, and it had selected and trained the finest talent Japan had to offer. Thirty percent of its employees worked in research and development, and even now it poured 35 percent of its net profit into technical development.

It was precisely because of that effort that the company could keep thriving while Japanese manufacturing around it crumbled.

"Japanese technology is the best in the world. I believe the true value of our company lies in Made in Japan."

"But isn't the most profitable plant the one in China? I heard the Chinese government wants you to expand there."

"China has strong government support, and labor costs are lower. But Yokohama Electron is a Japanese company. If we are to build a factory, I believe it should be built in Japan."

Nowadays, companies moved factories from country to country in search of cheaper labor. In this global age, he still insisted on production in Japan. Whether to call that conservative or craftsmanship, I wasn't sure.

Chairman Nakazato looked at me and asked, "Why do you want to acquire our company?"

Of all people, I knew Yokohama Electron's future better than anyone else did.

So I answered honestly. "Because of the Chinese market. Right now, Yokohama Electron is competing with ATAM in China. I believe Yokohama Electron can completely dominate the Chinese semiconductor equipment market."

He looked slightly surprised.

"You think we'll beat ATAM in China?"

"Yes."

Having answered his question, it was my ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠turn to ask one. "Chairman, who would you prefer to see acquire Yokohama Electron?"

Chairman Nakazato answered in a short, firm voice. "Whoever acquires us, we will simply do what we must do."

After I finished my business in Japan, I returned to Korea with Seonwu.

Before heading into Continue Capital's Korean office, I stopped by the neighboring building first.

Chairman Yoo Jae-ho asked me, "How was Japan?"

"It was good. I took in some sightseeing while I was there, and ate my fill of delicious food."

Though to be honest, it had been Sena who truly enjoyed herself.

"Was there any particular reason you had to go all the way to Japan?"

"Ah, I had wanted to meet Chairman Song Gazuki for a long time. When else was I going to get the chance?"

Chairman Yoo Jae-ho smiled. While I was in Japan, he hadn't been sitting around twiddling his thumbs either. He had been busy in his own right, because he had gone to Yokohama Electron China in Shanghai.

"Did you meet with CEO Rupert Liu?"

"Yes. He was confident that sales in China would more than double over the next five years. He also says they are ‍‍‌‌⁠​​⁠‌​​‍​​‍​‌​⁠‍‌‍⁠⁠‌⁠‌‍‌‍‌‌‌‍⁠​‌​‌​‌‍‌‌‌⁠‍​​‌‍⁠‌‌⁠⁠planning to build additional factories with support from the Chinese government, though of course the head office would still have to approve it."

"Chairman Nakazato seems to be against the Chinese plant."

Chairman Yoo Jae-ho nodded. "So I heard. But it won't be easy for him to oppose it outright. The Japanese government isn't going to support them the way China does. More importantly, the other companies' movements look rather suspicious."

Normally, the sale of Yokohama Electron was expected to run into trouble. There simply wasn't an obvious buyer.

In fact, even in the first timeline, they had struggled because no suitable acquirer could be found.

But this time, once Continue Capital, Yuseong Electronics, and the PIF joined hands and announced their bid, several other companies took interest as well.

"Enple has teamed up with PSMC, Guble is in talks with Microk, and Antel has entered negotiations to form a consortium with a private equity fund."

"So everyone's jumping in."

"Maybe not because they want the company themselves, but because they don't want to hand it over to us."

It was all something I had already anticipated, so I wasn't especially surprised.

Chairman Yoo Jae-ho sighed as if the whole thing was giving him a headache. "There's another problem too."

"What's that?"

"Yokohama Electron is a symbol of Japanese manufacturing pride. Because of that, the political establishment in Japan is keeping a close eye on the sale. They say they'll scrutinize the acquisition review very carefully. That's why Enple seems to be thinking about bringing Kionos into the consortium."

"Oh?"

That was a clever move.

"How big a stake are they talking about?"

"It looks like about 15 percent."

If the acquisition was worth 4 trillion yen, then 15 percent alone came to 600 billion yen. In won, that would be about 600 billion won? No—more like 6 trillion won.

"Does Kionos even have that kind of money?"

"Wouldn't Enple and PSMC guarantee it for them?"

Even if it was only 15 percent, having a Japanese company involved would completely change the mood of the deal.

"Then how about we bring Kionos into our own consortium?"

Chairman Yoo Jae-ho looked at me as if I had just said something absurd. "Do you think that would actually happen?"

"I guess not."

I had just said it to see his reaction.

The reason it wouldn't happen was simple enough: on the other side, they still believed I was the man who had helped Chairman Samara escape. They would probably rather die than work with Continue Capital.

Enple, PSMC, Guble, Antel, Microk, and the rest.

Not a single one of them was an easy opponent.

Still, I said with confidence, "Don't worry. In the end, we'll be the ones who win."

I finished my conversation with Chairman Yoo Jae-ho and stepped out, then contacted David.

He was right. In the end, the sale price would be determined by the stock price, and if the stock rose, the asking price would rise with it. But that didn't matter.