Rebirth of Northland Technology

June 1992

In the European Football Championship, Denmark participated as a substitute, passed all the way and won the championship, creating a myth that cannot be copied.

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"Mr. Cheng, Averygoodnews!"

As soon as the phone was connected, Big Nose came to announce the good news.

"XBM has listed us as their candidate supplier."

"This is great."

Cheng Yongxing has also been waiting for the news.

"There is better news!"

"Is there any good news?"

"Yes! xBM asked our production capacity. Ask us if we can provide a monthly output of 10,000 pieces!"

LCD sales and profits are larger than LEDs.The ex-factory prices of Optoelectronics to several suppliers are quite low.

At the current price, the profit margins of various suppliers are considerable. A piece of LCD can have a gross profit of US$500 only by consignment sales.The version without circuit boards has a gross profit of nearly $600.

"Mr. Cheng, this is a big business! Customers have said that if our production is no problem, their follow-up models will also use our products!"

In 1993, xBM introduced a variety of models of notebook computers. Only xBM itself, this market is large enough.

If this business can be achieved, the LCD business can contribute 5 million US dollars in profit to Kerui every month.In one year, it is 60 million US dollars!What is the market value of Kerui now?Just over one hundred million dollars!

How fast is this money!LED has worked so hard to make millions of dollars in profits a year. If it fails, it will have to lose a few months. Why bother?

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"Dear Smith, I'm afraid you will be disappointed. We don't have such a large production capacity. Currently, we can provide you with a maximum of 1,000 tablets a month."

"Why are there so few?"

From 10,000 pieces to 1,000 pieces, this is a direct loss of zero!

"Yield rate problem. We also have yield problem!"

The yield rate of TFT-LCD is already a major problem in the industry.

Although the reasons are different, Optoelectronics has indeed been fighting with yield.

If calculated from the construction of the factory, the construction period of this production line has exceeded 15 months.Even if it is a formal line, it should be built.

But a group of raw melon eggs jumped into a whole new field, and it would be strange if there were no problems.

The designed production capacity of Line 1 is 4,000 pieces per shift, but due to the congenital defects of many equipment designs, it seems that the monthly production of 3,000 pieces per month in a single shift is probably the best result.

"Well, let me raise the price here. The price of the panel will add $50 per piece. You can evenly distribute the production capacity of the other companies to me."

Smith thought clearly.The production capacity of optoelectronics is now divided into several companies, and each company can only get 1,000 pieces.What if there is only one monopoly?

Grabbing one piece is equivalent to grabbing a profit of $500.Even elementary school students can count this account.

What patent alliance?

As long as it has a firm foothold in the LCD industry, LED?What it is?

"Smith, it's not about money!"

"100 dollars!"

"Okay, I'll take you!"

"You promised?"

The people on the phone were bleeding.If it weren't for the fact that the xBM market is large enough, the opportunity is a once-in-a-lifetime opportunity, and this concession cannot be made anyway.

Who is xBM? All the people who have something to do with xBM are posted!

Haven't you heard of Microsoft, Intel?How did they get started?

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"Not to promise you, but to have another suggestion!"

"What advice?"

"We have a new line, which will be mass-produced before the end of the year, and now we have some funding problems. If you are willing to invest 20 million US dollars in it, the capacity of this production line will be given to you!"

Line 2 has reached the peak of equipment payment.Kerui's call came at the right time.

"What is the capacity of this line?"

"About 4,000 tablets a month."

"Huh? The capacity of the TFT production line is not all 30,000 pieces?"

"You're not kidding. Which TFT-LCD manufacturer do you see that can provide so many qualified products? You don't know that there is a term called the yield rate!"

"You mean, these four thousand pieces are the final qualified products?"

If it is a qualified product, it makes sense.Regardless of other factors, these four thousand panels can bring Kerui about US$2 million in gross profit every month.Calculating the rate of return on investment, 20 million US dollars, returned in a year.

Such a high return on investment is rare at any time.Not to mention the meaning behind it.LCD industry, notebook display market.

"Of course. When did I play virtual? Our figures refer to effective production capacity."

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"How many shares can we have if we invest 20 million dollars?"

In the LCD industry, the market is too big, and the profits are too big.In fact, at the last meeting, everyone was moved by this thought. Unfortunately, Optoelectronics did not play with them, but just let them be distributors.

You can't miss this opportunity.

"Twenty percent. After all, we also have investment here, as well as technology investment."

Cheng Yongxing valued this production line, which has not yet been completed, at US$100 million, which is exactly the same as the cost of an ordinary mass production line.

"20% is too little, we want 40%."

No matter how much the price is, everyone instinctively needs to bargain.In Smith's view, this is a good time to take advantage of the fire.The project is almost completed, and the last sum of money is lacking, so what are you waiting for?

Soon the topic entered the bargaining session.The final result of the discussion is that Kerui has invested 25 million US dollars to occupy 30% of the project's revenue.

Kerui can not only benefit from the agency sales of this production line, but also share the profits of this line itself.

Of course, this investment is different from a shareholding. Kerui only appears as a financial investor, not a shareholder.

"But, twenty-five million dollars, isn't it a little bit less? How about we invest more?"

After talking about shares, Smith felt that the money spent was a bit less.

After all, production capacity is the number one priority, and the market is the number one priority.Kerui has just gone public, and there is money left in the stock market.Investment in the LED field is no longer possible, and it is not bad to invest in LCD.

Optoelectronics currently lacks financing channels, but Kerui is not lacking.There is a real shortage of money, the big deal is just to issue additional stocks.

"Our projects are almost in progress. Even the factory buildings have been built, so you are short of funds."

Cheng Yongxing's face did not change color, and his heart was not beating, pretending to be big money in front of foreigners.

Although your nose is a bit big and well-informed, it is estimated that you have never experienced the baptism of PPT.Powerpoint estimates that you have never seen what it looks like.

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Putting down the phone, Cheng Yongxing immediately called several core members to a meeting.

But when the money came in, this production line meant no money!Optoelectronics' own funds can be replaced.

The core of this meeting is to build a large factory.

In the north, the biggest and most difficult part of building a production line is civil construction.Because there is a half-year winter in the north.

In winter, I do some interior decoration and equipment installation is okay, but there is no way for the foundation or something.

Kerui's funds have come in, and funds from several other companies will soon come in.But without a factory, everything is of no avail.

The economic cycle of this wave in 1992 was very short.Wait until the beginning of 1993 to rebuild the plant, the completion of the plant was the end of 1993, plus the equipment installation and commissioning, it was put into operation in early 1994.This wave of markets has long passed.

Therefore, in order to meet this wave of LCD capacity expansion.The top priority is to build a factory.However, land is needed to build a factory, and the company has no land.

Within the company, there is still some potential to be tapped, such as several workshops under the equipment company.But there are two problems with the renovation here.

The first, the entire area, has been planned as the Southern District of the University of Technology, and will face the problem of secondary demolition in the future.

The second one is all dismantled, where does the equipment company go?

And the equipment company itself also needs to use factory buildings.They are also expanding.

In fact, they are already expanding.Part of the area of ​​the newly built second factory building was taken away by them.

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To build a new factory, there must be a new land.

For the land, Optoelectronics started a new round of corporate annexation.The purpose of this merger is to go to the land.

This is why all kinds of development zones have to implement three links and one leveling, and five links and one leveling.

There is no such prepared development zone now, so urban land is the only option.

Zhang Yan, the panacea, was immediately sent out again to start a new round of corporate merger negotiations.

Although the triangle debt situation has eased, the operation of the traditional industries such as machinery is not very optimistic.

The basic idea of ​​triangular debt relief is to remove some of the companies with poor operating quality from the financial sector.The companies that have been picked are actually abandoned.

Due to the outbreak of the LED industry, many companies have successfully transformed, but optoelectronics still have many choices.

Zhang Yan's task is to complete the foundation work of two more workshops before September this year.Only in this way, the subsequent winter construction can continue.

At this time, the real estate boom has not yet begun, and everyone has not realized the value of the land.

No one has ever seen a company like Optoelectronics who rushed to the ground to acquire companies.Optoelectronics' behavior of annexing enterprises for the sake of land has become a joke among all walks of life in Bingcheng.

However, after more than a year of fermentation, the name of the optoelectronic department has spread throughout the city.

The appearance of the employees of the merged company in Optoelectronics is very convincing.Before and after the merger, everyone's wages, benefits, and housing allocations were in sharp contrast.

As soon as this news appeared, it immediately caused a huge response among a group of employees of small and medium-sized enterprises with poor performance.