Chapter 140: Data Center

“Executive Vice President Hong Chung-ki, how is Dojin Tech’s recent performance?”

As Han Yu-ju’s report concluded,

the next set of data was displayed, this time for Dojin Tech.

“Let’s start with sales performance.”

“Go ahead.”

Having not paid much attention lately, I needed to hear about the production status of lenses, camera modules, and the Quantum, among others.

Last year… no, even until the year before last, I had a complete grasp of the company’s overall situation.

Now, with so many responsibilities, it’s physically impossible to keep up with everything.

[Unit Sales and Revenue by Product (Previous Year)]

• Lenses: 120 million units / 324 billion won

• Actuators: 97 million units / 1.164 trillion won

• Camera Modules: 198 million units / 9.504 trillion won

• Batteries: 32 million units / 224 billion won

• LCDs: 67 million units / 1.809 trillion won

• Feature Phones: 15 million units / 1.005 trillion won

• Smartphones: 53 million units / 39.75 trillion won

As Executive Vice President Hong Chung-ki explained the sales performance, murmurs of surprise rippled through the room.

“Wow, Dojin Tech’s revenue exceeded 60 trillion won?”

“Just in terms of revenue, Dojin Tech is now the fifth-largest company in the country.”

“Among single companies, it’s right behind Ahsung Electronics, Mirae Motors, SKK Energy, and Cheongwoon Electronics?”

It hadn’t been long since we broke into the top 100 in the business world.

Thanks to the Quantum’s sales impact, our ranking skyrocketed.

In my view, it was a decent achievement.

“So, the exact revenue is 62.825 trillion won?”

“Yes.”

“Lens and actuator sales have also increased significantly.”

“We’re receiving orders from so many places. As soon as capacity increases, everything sells out.”

Lens sales: 120 million units.

Actuator sales: 97 million units.

Both figures exclude the quantities used internally for camera module production.

These are just the numbers for lenses and actuators sold externally as standalone products.

For lenses, the actual production figure is 120 million units plus the 198 million units (+α) used in camera modules.

While we haven’t yet reached my target of 1.2 billion units annually,

it seems achievable within two to three years.

“Hmm……”

Everyone was excited about the impressive performance,

but Executive Vice President Hong Chung-ki, Executive Director Oh Seong-hak,

and I didn’t show much enthusiasm.

We knew all too well that the visible revenue was a hollow victory.

“So… what about profits?”

The room fell silent.

With revenue surpassing 62 trillion won, everyone was curious about the profit.

“Last year’s operating profit was 5.5731 trillion won.”

“……”

Amid the silence,

muted whispers began to spread.

“What? Why is the operating profit so low?”

“The profit margin is less than 10%?”

“It’s lower than expected.”

Seeming to notice the whispers,

Executive Vice President Hong Chung-ki continued with additional explanations.

“There are three main reasons for the low operating profit margin.”

The slide he flipped to prominently displayed the phrase “Poor Feature Phone Sales and Losses.”

“First, the feature phones developed and sold by Pintech & Curetech before our acquisition performed very poorly.”

Executive Vice President Hong pointed to the graph.

“Sales of feature phones, already weak at the time of acquisition, plummeted further after the smartphone launch.”

Seong-hwan tilted his head in confusion.

“Even so, feature phones don’t account for a significant portion, right?”

“The issue is that even as sales dropped, the production lines kept running.”

In other words, raw materials, labor, and management costs continued, but sales didn’t follow.

“What’s the second reason?”

I had a rough idea,

but instructed him to explain further for the other team leaders.

“The second reason for the low operating profit margin is that we priced the entry-level smartphone, the Quantum1-A, at a near-cost price of 590,000 won.”

Listening, Executive Director Oh Seong-hak unconsciously sighed.

As the one overseeing Dojin Group’s finances, he wasn’t pleased with the low-price strategy for the Quantum1-A.

“It’s unfortunate, but to increase market share for Lunar and others, it was a necessary step.”

Thanks to simultaneously pursuing a premium strategy for the Quantum1-S and a low-price strategy for the Quantum1-A,

we achieved a remarkable 32% market share in just over a year since launching the smartphone.

The profit issue would resolve itself over time.

“And the third reason is the massive investment in marketing, development, and production capacity expansion.”

The next slide displayed the phrase “Investment Costs,”

with detailed expense breakdowns for each category.

“First, launching the Quantum1 series involved significant promotional expenses in Europe, Asia, and North America.”

Executive Vice President Hong continued flipping through slides, explaining the advertising and marketing costs for the Quantum1 series.

“As you know, the Quantum1-S followed a premium strategy, while the Quantum1-A targeted the entry-level market. We ran tailored ad campaigns for each market, totaling around 1.5 trillion won.”

Wow.

The unexpectedly large amount drew gasps from the room.

“The cost-effectiveness was sufficient, I believe.”

I spoke, and Executive Vice President Hong nodded.

“It certainly helped boost market share for both Quantum and Lunar.”

“How much was invested in development costs?”

I knew development costs were also substantial.

Executive Vice President Hong Chung-ki continued with the details.

“You’re already familiar with the development costs for the Quantum1-S and Quantum1-A, so I’ll skip those and focus on investments for the Quantum2, next-generation lenses, actuators, LCDs, batteries, and more.”

Executive Vice President Hong explained that 2.3 trillion won had been invested in developing these products,

and funding was still ongoing.

“For lenses, aside from the 20-megapixel models currently in mass production, we’re developing ultra-wide lenses for dual cameras.”

Typically, the human eye can see about 65 degrees,

and existing single cameras are mass-produced at a similar level, around 65 to 70 degrees.

However, starting with the next model, the Quantum2, we plan to use both a 65-degree wide-angle lens and a 110-degree ultra-wide-angle lens.

“With dual cameras, can you capture a wider view than the human eye can see?”

In response to Han Yu-ju’s question, Executive Vice President Hong smiled and nodded.

“In the future, we plan to develop cameras with triple lenses, allowing an even broader field of view.”

Han Yu-ju exclaimed, “Wow!”

“Anyway, aside from camera modules, significant funds are being invested in developing high-resolution OLEDs, high-capacity batteries, and various components for the Quantum2.”

An investment of 2.3 trillion won for developing a new smartphone model seemed reasonable enough.

“And aside from development costs, a lot went into factory expansion.”

The next slide read “Expansion of Dongtan Plant 1 and Construction of Plant 2.”

“Capacity expansion for Dongtan Plant 1 is now complete, and we’re operating at full capacity for lenses, actuators, camera modules, and Quantum production.”

Since everyone was already aware, he moved on without further explanation.

“So, we’re building a new factory on an additional 150,000 pyeong of land nearby. As you know, we’re designing it for semiconductor production, which has increased the investment significantly.”

“Semiconductors too?”

“Will Plant 2 produce semiconductors?”

Questions flew around the room at the mention of semiconductors.

I answered on behalf of Executive Vice President Hong.

“We’re planning for future semiconductor production, but not immediately.”

Even if we wanted to start now, we couldn’t.

We lacked the funds.

“So, how much has been invested in factory construction?”

I asked.

“700 billion won for expanding Dongtan Plant 1, and 1.3 trillion won for constructing Plant 2.”

That meant 2 trillion won had been spent on factory construction alone.

“To summarize, about 5.3 trillion won has been invested in promotions, development, and expansion.”

“Correct.”

Following Executive Vice President Hong’s explanation, Executive Director Oh Seong-hak spoke up.

“Factoring in all those investments, the operating profit is the 5.5731 trillion won mentioned earlier. After accounting for non-operating expenses and corporate taxes, the net profit is around 4.1861 trillion won.”

Even with substantial earnings, after deductions, not much remained.

“Corporate tax is 22%, plus various interest payments and foreign exchange losses from exporting Quantum and other products, right?”

“Yes.”

Executive Director Oh Seong-hak nodded and quickly added,

“And since it seems you’ll instruct investment in data centers, I’ll mention this now: about 1.8 trillion won of the 4.1861 trillion won profit has been allocated to Dojin Soft, and an additional 700 billion won has been set aside for establishing a home appliance division.”

The mention of a home appliance division stirred the room again.

“We’re making home appliances too?”

“The CEO mentioned it before, but I didn’t realize it was actually happening.”

“Team Leader Jang Hee-soo’s designs are truly exceptional.”

“Yeah, I’ve seen some of Team Leader Hee-soo’s designs, and they’re too good to ignore.”

As the team leaders spoke, I waited for the commotion to subside.

After a moment, the room quieted,

and I spoke again.

“So, about 1.7 trillion won is available for additional investment in data center construction?”

“No!”

The firm response drew everyone’s attention to Executive Director Oh Seong-hak.

“Why not?”

“The net profit of 4.1861 trillion won is just a number.”

“……What?”

“Some of it is tied up in inventory, accounts receivable, and investment assets, so the actual cash available is much less.”

Understanding, I nodded.

“And we need to set aside funds for operational costs and contingencies, so the additional investment available is… roughly 1 trillion won.”

It was far from enough to build a data center.

“Still, we can at least start construction.”

“CEO.”

Executive Director Oh Seong-hak seemed to want to say more,

but I raised my hand to signal him to stop, knowing what he was about to say.

Even if it’s tough now, we need to push forward.

We can’t halt progress just because funds are tight.

“How much funding is needed for data center construction?”

Building a 15,000 PB-capacity data center would clearly require massive investment, so I steeled myself

and waited for the answer.

“……I’ll need to look into it further, but based on previously constructed data centers, we’re looking at a minimum of 10 trillion won.”