Wuxi mayor explained billions of dollars chip investment

"Some people work in an enterprise, an industry originally, feel the industry can make money, take 35 people to come back and engage in, this kind of company mainly in failure." October 10, 2006, Hynix (Hynix) project a semiconductor company 8 inch and 12 inch ultra large scale integrated circuit project was completed and put into production in Wuxi.

This is by far the largest domestic investment in electronic information industry projects. The Wuxi claimed to be the world's highest concentration, the largest and most technologically advanced semiconductor manufacturing base".

The Yangtze River Delta has become a major investment in the semiconductor industry, while overheating investment occurs frequently. Lenovo to Changzhou, Nantong, Kunshan green mountain NACO Dexin several semiconductor project or stranded or progress difficult, people can not help but to the "Chinese most" cast to doubt.

Currently, the mayor of Wuxi Mao Xiaoping accepted an exclusive interview with this reporter, explained in detail the investment ideas of this project.

"8+12" decision process

"Twenty-first Century": why Wuxi chose as a partner?

Mao Xiaoping: This is the result of careful screening of settled objects.

8 inch, 12 inch wafer production line, where do you get it? It's impossible from Japan, the United States and control, in Europe by the Batumi agreement, you can't even see the equipment. In the United States, I would like to go to the famous big companies to see, because I have two professionals, they did not agree to take you to the museum seven to eight rpm, and then a multimedia broadcast to broadcast.

South Korean companies, very important reason is that there is no political barriers between China and South korea. In fact, South Korea's two companies - Hynix and Samsung, we have contacted. There is a meaning behind the Hynix, is Europe's largest semiconductor company, the two companies together, the basic guarantee of the project in technology and brand can be successful.

Choose a partner is very important to choose very well. Some people in a certain industry, a business, the industry is able to make money, with 35 people back to engage in this kind of company based on the failure of the main. The second category is the foundry enterprise, it does not have a complete brand and technology development, design capabilities. And we lock is must have brand and independent technology company.

Twenty-first Century: Wuxi is now the only city in China with 8 inch and 12 inch wafer production lines. How did you and your partner make such a big decision?

Mao Xiaoping: when we first started negotiations with Hynix, they only made two of the 8 inch production lines, and we moved on. But before the Spring Festival the year before last, the project suddenly stopped, their board of directors to discuss to prepare "8 plus 12" (that is, a production line of a line of 8 inches plus a production line of 12 inches), rather than the "plus 8". But when I went to Korea to sign a memorandum of cooperation with them, it was 8 inches.

We will meet with an expert advisory panel. The formation of two views, a view that 12 inches is the direction, the use of high technology is certainly better than the use of 8 inches technology promising. But only two of the 10 experts held on to the idea, and the other 8 were against it. Opponents said that although 12 inches is high-tech, but now is not necessarily the most mature business plan, in the next 5 years, the business can not be dominated by 12 inches. The 8 inch is the mainstream of commercial technology, we now launched the project to ensure zero risk, so it should be on the 8 inch line.

But South Korea insisted on the "8 plus 12", I asked them why the board, your plan will have this change? They say is based on the judgment on the future: 12 inch technology has the potential to become the mainstream in 5 years, but this situation may also appear in the 1 to 2 years. If you block out the high-tech commercialization of this door, the competition will be a slow shot.

I personally agree on "8 plus 12"". First, the rapid development of high-tech, I believe it becomes faster. The decision to make such a decision is based on expert opinion, and their experts have a broader vision of the international market than our consultants and experts. Second, the decision has been made, the choice is to do not, if we do not agree on the 12 inch line, it means that we give up the entire project. Third, in China, the original technology is 8 inches, 12 inches and we can make Wuxi the "Taihu Silicon Valley" dream, a first in the country, have what not good? The three points in my mind, I have to front negotiators issued a directive: agree.

Double insurance plus insurance

"Twenty-first Century": IC industry is a high input, high efficiency, but also high-risk industries, the introduction of the Hynix Semiconductor project when you consider this risk?

Mao Xiaoping: expert evaluation of our project is the minimum cost, minimum risk. Why? Because the Wuxi municipal government on the development of high-tech industry is to promote, encourage, play a service role, not for others.

To talk about risk, nothing more than credit risk, but we are double insurance plus insurance. Hynix - STMicroelectronics company's registered capital is $750 million, of which $250 million is $500 million, is the capital of Hynix, then STMicroelectronics hit $250 million and $250 million in loans to shareholders registered capital. 1 billion 250 million dollars in capital, but so far it only