Chapter 178: Bubbles
“CEO, we’ve got a problem.”
Executive Director Oh Seong-hak came to me with a serious look on his face.
“What is it?”
“Ahsung has placed large advance orders for key semiconductor equipment, particularly exposure and CMP equipment.”
“Are you saying it’s a problem that Ahsung placed advance orders for the equipment?”
Seong-hwan questioned on my behalf.
“Normally, it wouldn’t be a problem, but it seems Ahsung has put a lot of pressure on the equipment suppliers.”
“Are they asking to adjust our delivery schedule so their orders are fulfilled first?”
Executive Director Oh nodded.
“Given Ahsung’s immense influence in the semiconductor industry, it seems the equipment suppliers can’t ignore them.”
“So, our equipment won’t be supplied on the original schedule?”
“Not necessarily, but we’ll likely have to pay a premium to receive it as scheduled.”
There was a brief silence.
“……That’s not all. There’s also an issue with Zeiss in Germany.”
I widened my eyes at the mention of Zeiss.
“You mean the company that’s been co-developing the extreme ultraviolet mirror with us?”
“Yes, they suddenly sent us an official notice stating they’re discontinuing their collaboration with us.”
The high-precision extreme ultraviolet mirror was an essential component for the LUNA-EVX.
It was a project we’d been co-developing with Zeiss since the early stages.
“What…… is the reason?”
“The main reason was that the extreme ultraviolet mirror had low technical feasibility.”
It was likely that Ahsung had lured them away to start a new project together.
A piece of equipment capable of drawing a 0.3nm circuit by overcoming the physical limitation of ‘the wavelength of light.’
Anyone could see the chances of success weren’t that high.
“This time…… Ahsung has targeted our weak spot.”
“This isn’t something we can just let slide.”
“I know.”
If we couldn’t secure the extreme ultraviolet mirror, we couldn’t produce the LUNA-EVX.
And that would render the development of the neuromorphic chip meaningless.
“Is it impossible for us to develop the extreme ultraviolet mirror ourselves?”
Executive Director Oh reflexively shook his head at Seong-hwan’s question.
“We could develop it ourselves, but we partnered with Zeiss from the beginning because of their infrastructure.”
“How much funding was needed to secure the infrastructure?”
I remembered telling Executive Director Oh to calculate the cost before.
“Aside from the component development costs, about 12 trillion won was needed just to secure the infrastructure.”
“Wow……”
Seong-hwan gasped at the unexpectedly huge amount.
“So…… adding the premium to expedite the equipment delivery and the infrastructure costs, we’d need at least an additional 13 trillion won, right?”
“That’s not all.”
Executive Director Oh’s face was still clouded.
“Are there more problems?”
“Samwoo Chemical has also informed us they’ll be discontinuing material supplies.”
“Samwoo Chemical…… You don’t mean…… hafnium oxide, do you?”
Executive Director Oh nodded.
It was ridiculous, but also frustrating.
Hafnium oxide was an essential gate insulator material in the latest semiconductor processes.
It was the leading high-k material that drastically reduced leakage current while maintaining transistor speed and density compared to conventional silicon oxide.
“Without hafnium…… there’ll be disruptions even in the production of the computation module……”
“Team Leader Lee Hye-ryeong is extremely worried.”
It was only natural for the production lead to be concerned.
“How long can we hold out with our current inventory?”
“It seems we can only hold out for about a month.”
“Is this Ahsung’s doing as well?”
“It seems…… that’s the case.”
I couldn’t help but let out a bitter laugh.
‘They’re really determined to sabotage us.’
I had no intention of just sitting there and taking it.
After a moment of silent contemplation, I slowly opened my mouth.
“So, there are currently three issues: the equipment delivery delay, the termination of collaboration with Zeiss, and the hafnium oxide supply cutoff?”
“Yes.”
“First, let’s pay the premium to ensure the equipment is delivered on schedule.”
“Doing that would mean paying about 15% more than the original price. Is that okay?”
It was an unexpected expense.
But it wasn’t enough to cause immediate liquidity issues.
“For now, that’s the best option. It’s not very efficient to develop all that equipment ourselves one by one.”
“Understood. I’ll handle the equipment purchase that way.”
“And for the extreme ultraviolet mirror we were developing with Zeiss……”
Executive Director Oh watched me tensely as I paused.
It was the biggest issue among the ones that had arisen.
“Let’s change the collaborating company to Busan Optic.”
“……Huh?”
Executive Director Oh’s eyes widened at the unexpected suggestion.
“You’re saying we should change the collaborating company to Busan Optic…… What exactly do you mean?”
“While preparing for semiconductor production, I realized we’d need to collaborate with countless materials, components, and equipment companies.
“So…… you’re saying we should foster Busan Optic as one of those companies?”
“Yes.”
“But Busan Optic is…… a company that mass-produces lenses and camera modules in collaboration with us. A company like that……”
He was asking if they’d be of any help in developing semiconductor equipment.
On the surface, cameras and semiconductors were completely different fields.
But……
“The extreme ultraviolet mirror has quite a bit of overlap with optics.”
The key technologies required for the extreme ultraviolet mirror were ultra-precision flattening technology to accurately reflect light at the nanometer level and multi-layered thin-film coating technology to maintain a reflectivity of over 70%.
“So…… you’re saying the lens and camera lens manufacturing technology Busan Optic has been producing for a long time will also help with developing the extreme ultraviolet mirror?”
“That’s right.”
I walked over to the whiteboard and drew a simple cross-sectional diagram of the extreme ultraviolet mirror.
Dozens of layers of molybdenum (Mo) and silicon (Si) thin films intersecting.
It was a structure requiring atomic-level precision with a surface roughness of under 0.1nm.
“It won’t be easy, but utilizing Busan Optic’s glass precision processing technology, multi-layered thin-film coating technology, and ion beam polishing technology should make development possible.”
“But…… Zeiss has spent decades developing optical systems specifically for semiconductors. Busan Optic has no such references.”
“That’s why I’m going to create that opportunity for them.”
Without my help, Zeiss wouldn’t have even dreamed of developing the extreme ultraviolet mirror.
They’d already concluded it was impossible to develop on their own, which is why they’d notified us of the collaboration termination.
After a moment’s hesitation, Executive Director Oh nodded.
“Apart from the technical aspects…… collaborating with Busan Optic isn’t all bad.”
“What percentage of Busan Optic do we own?”
“About 20%.”
Come to think of it, we did have a deep connection with Busan Optic.
Seong-hwan and I started our business by receiving glass lenses from Busan Optic and refurbishing them.
Later, when Busan Optic was in trouble, I proposed they outsource actuator and camera module production to us and invested 20 billion won in the process.
“It was a good call not selling our Busan Optic shares after they went public.”
“I also think it was a decent choice.”
Executive Director Oh nodded.
Actually, one reason I invested in Busan Optic was to quickly increase camera module production capacity.
But the bigger reason was to sell the shares when the stock price rose as smartphone-related stocks formed in the stock market after the smartphone launch.
But……
“Is Busan Optic’s stock price still trending upward?”
“Yes, while the increase isn’t huge, it’s consistently breaking new highs and maintaining an upward trend.”
This was an unexpected development for me too.
A company with an annual revenue of just(?) 350 billion won had a market capitalization exceeding 5 trillion won.
“You said Busan Optic’s stock price is high because we own shares in it, right?”
“Since our company hasn’t gone public, indirect investments have been pouring into Busan Optic, in which we hold shares.”
Thanks to that, Busan Optic’s PER (price-earnings ratio) exceeded a whopping 30.
In other words, it was in a heavily inflated state.
“The value of the shares we invested 20 billion won in has risen to 1 trillion won, so it’s been a successful investment in its own right.”
“If rumors spread that we’re additionally developing semiconductor equipment with Busan Optic, there’s room for further increases.”
I thought so too.
And that was also why I’d designated Busan Optic as the collaboration partner.
“If the stock price rises higher than it is now, it’ll also help secure funding for infrastructure investments, right?”
“Not quite 12 trillion won, but it’ll help to some extent.”
Actually, while we’re on the subject……
Investors wanting to invest in our company were lining up with numbers, waiting their turn.
I just wasn’t accepting investments because I was concerned about share dilution.
“What would be a good way for Busan Optic to raise 12 trillion won?”
Executive Director Oh cautiously answered my question.
“It’ll be difficult for Busan Optic alone. With a market cap of 5 trillion won, even if they successfully attract additional investments, more than 2-3 trillion won would be a stretch.”
“What if we help?”
Executive Director Oh quietly nodded at my words.
“If we officially designate Busan Optic as our strategic partner for semiconductor development and announce joint development, the market will start seeing Busan Optic not as a simple camera module manufacturer, but…… as a next-generation semiconductor equipment developer.”
I erased the diagrams I’d drawn on the whiteboard.
And wrote down some calculations.
“Including government contributions, policy loans, PEF participation, and our direct investment……”
I put down the marker and turned around.
“We should be able to secure around 12 trillion won.”
“I think there’s a decent chance. Especially recently, sovereign wealth funds from the Middle East and Silicon Valley pension fund investors have been reaching out to us regarding investments. If we redirect them to invest indirectly in Busan Optic through us, there’s a good possibility they’ll execute the investments.”
Seong-hwan, who’d been listening, joined the conversation.
“But hyung, how much are we planning to invest?”
“To establish a joint venture and secure sufficient shares, we’ll need to invest at least 3-4 trillion won.”
Seong-hwan looked concerned at my words.
“Even using funds from Dojin Tech, Dojin Soft, and Dojin Frontier, we don’t have that kind of liquidity right now, do we?”
“We do.”
“We do?”
Only because I don’t use it unless necessary.
In preparation for times like this, I’ve been carefully growing a goose without slaughtering it.
“DJ Capital.”
“Ah, right. We had that.”
Seong-hwan exclaimed.
Since it was money we usually left untouched, I sometimes forgot about it.
Even after the investments leveraging the end of US quantitative easing and Abenomics,
Grant and Lisa had been diligently growing the funds.
So 3-4 trillion won was easily procurable.
“Then I’ll discuss the terms with Representative Cho Cheol of Busan Optic.”
Even though a major issue had been resolved,
Executive Director Oh’s expression didn’t fully brighten.
“And…… what should we do about Samwoo Chemical discontinuing hafnium oxide supplies?”
“Oh, right, that issue remains.”
Hafnium oxide.
An essential material for high-k gate insulators.
In modern high-performance semiconductor chips, this insulator plays a critical role in determining the switching speed and energy efficiency of transistors.
Samwoo Chemical cutting off hafnium oxide supplies was like asking us to build a car without an engine.
“Without hafnium oxide, even producing the computation module will be difficult……”
I continued slowly.
“But I have an even better alternative.”