Author 丨 Lion Knife
Title map 丨 Figure worm
Picture design 丨Li Bincai
On December 16, Hengxuan Technology (688608. SH) was listed on the Science and Technology Innovation Board, opening at 391.00 yuan / share, with a market value of 45 billion.
The company, known as the "first share of TWS on the Science and Technology Innovation Board", provides audio chips for TWS headphones, smart speakers, etc. The company has achieved a turnaround in only 3 years since its establishment, with a net profit of more than 60 million yuan in the 5 years of its establishment. From its establishment to its listing, it took only five years to set a record for the fastest listing of domestic integrated circuit design companies.
"Investing in Hengxuan is mainly because of the team."
As an early investor of Hengxuan Technology, Yuanhe Puhua has achieved a 15 times return on this project alone. Founding partner Liu Yue told Chuangyebang, "Zhang Liang of Hengxuan Technology is a bachelor's degree in microelectronics at Tsinghua University, and I knew him when I was at SMIC, when he was president of RDA (Ruidike Microelectronics), giving people the feeling that he can 'get things done'; in addition, from the perspective of the general trend, wearable devices are the trend of the times, so the development of Hengxuan can be described as 'time, place and people'. ”
"China's chip companies have now solved the problem of survival and entered the stage of defining products." Liu Yue said.
Starting from the third factory of Beijing Semiconductor Devices, successively serving as vice president of Peking University Blue Bird Group, executive director and vice president of Peking University Blue Bird Huanyu Technology, from the earliest founding investor of SMIC, to the vice president of Huadeng International, and then to the founding partner of Yuanhe Puhua, Liu Yue has witnessed the development process of the domestic integrated circuit industry for more than 40 years.
Journey (2000~2010)
On July 27, 2020, the State Council issued the "Several Policies for Promoting the High-quality Development of the Integrated Circuit Industry and the Software Industry in the New Era" (hereinafter referred to as the "Several Policies"), in which advanced production lines are exempted from income tax for ten years, R&D capitalization, the first mention of integrated circuit design tools (EDA), the scope of application of the "two exemptions and three halves" policy is expanded from the past chip design to the whole industrial chain of packaging, equipment and materials, and the tax incentives for key design and software enterprises are increased...
"This shows that the importance of integrated circuits will be further enhanced, and the development of the industrial chain will be more mature." The introduction of policies is very important for the development of an industry. It can enhance the confidence of industrial people and accelerate the landing and growth of the industry. Liu Yue said, "In the future, every link of the industrial chain will run out of a leading enterprise." ”。
Looking back, from the "No. 18 document" in 2000, the "No. 4 document" in 2011, and the current "No. 8 document" in 2020, the same policy has made the development of the integrated circuit industry a journey.
The establishment and growth of SMIC is inseparable from the "Circular 18" 20 years ago.
Before 2000, after the development of the 908 and 909 projects, there were IDM manufacturers such as Huahong NEC, Shougang NEC, Motorala Tianjin Factory, etc., but at the OEM level, it was still inseparable from foreign OEM.
At that time, Peking University Blue Bird, which had just integrated the IC business of Peking University Huanyu, decided to initiate the creation of a real integrated circuit manufacturing company to lay the foundation for China's integrated circuit industry.
Everything is difficult at the beginning, first of all, to find the right leader and team.
"At that time, the main integrated circuit manufacturers in China were Huahong, Shougang, etc., and after many exchanges with them, I already had preliminary ideas. So as soon as I met Zhang Rujing, I knew that he was the person we were looking for. The first time they met, he didn't even have a BP, but the team had already thought clearly about how the plant was planned and implemented, how the equipment was introduced, and how much output could be produced each year. Liu Yue said that subsequently, Peking University Blue Bird Group advanced 50 million yuan in advance, and SMIC landed in Zhangjiang, Shanghai, and began the construction of the 8-inch (wafer) factory.
From August 2000, when piling began to build the plant, to September 2001, when the first 8-inch wafer below 0.25 microns entered the trial production phase, SMIC only took 13 months.
But Zhang Rujing's ambitions go far beyond that.
"At that time, there was no mass production, the company was not yet profitable, and Zhang Rujing already wanted to build a 12-inch factory." Liu Yue recalled, "The board of directors is naturally opposed, believing that SMIC should sell some products first and recover some funds." But Zhang Rujing felt that it was more important to seize the market opportunity than anything else. ”
As a result, Liu Yue, who is in Beijing, took over the "baton" of the 12-inch factory.
"What could be worse than an investor working in a company that has been invested in?" Liu Yue made a joke and said, "At that time, shareholders were not willing to invest, just like doing 'underground work', a person provoked a beam, while building a factory building and looking for money everywhere." ”
Historical data shows that in 2002, SMIC had total revenue of $50.3 million and a net loss of $102.6 million. The early development of the semiconductor industry requires a lot of money to invest in the lack of income, and even let Liu Yue once feel that he was "a failed investor".
The facts proved Zhang Rujing's vision. After a difficult 2003 soaked in the smell of disinfectant water, Liu Yue's first 12-inch production line in China was finally completed and gradually put into production in 2004, which marked that China's integrated circuit manufacturing technology has entered the 300mm era and entered the international high-end ranks.
In March 2004, SMIC went public in New York and Hong Kong, raising nearly US$1.8 billion. In the first half of 2004, SMIC's sales were $479 million, up 259.0 percent from $113.6 million in the first half of 2003, and net profit increased from a net loss of $68.6 million in the first half of 2003 to a profit of $61.6 million in the first half of 2004.
"The integrated circuit industry is not the same as other industries, the industry pays the most attention to the speed, because of the fast iteration of the update, once it can not keep up with it is easy to be eliminated, so not only in the research and development investment is huge, but also needs the founder to have a long-term vision." Liu Yue said, "For investment institutions, investing in integrated circuit companies is to invest in 'people', to see if this team can still have enough confidence in the future in the case of huge losses, and still have a firm belief in their careers in the trough period." ”。
Time comes. In 2014, the State Council issued the "Outline for the Advancement of the Development of the National Integrated Circuit Industry", which planned the development route of China's chip industry for 15 years, and China's IC industry has since been truly included in the strategic industry of long-term development of the country. In October of the same year, the National Integrated Circuit Industry Investment Fund was established, announcing that it would focus on investing in the IC chip manufacturing industry in various forms such as equity investment, with the first batch of scale reaching 120 billion yuan.
The establishment of the National Fund not only played a very important role in the development of SMIC, but also prompted Liu Yue to officially become an investor.
Review (2010~2018)
In the four years from leaving SMIC in 2010 to establishing the Puhua team in 2014, Liu Yue has conducted a long period of review and reflection on the integrated circuit industry.
"I used to be in charge of purchasing, sitting among a group of young people in their twenties and listening to them talk about how to sell 1 million mobile phones a year; I was also responsible for running through the market and eating a lot of closed doors." 」 Liu Yue has the trait that most investors have: curiosity. During her ten years at SMIC, she spent almost every department, giving her a more comprehensive understanding of the integrated circuit industry.
"The analogy in the garment processing industry may be easier to understand. In the early days, we had no materials, no design, and could only rely on the advantages of labor to help others to carry out processing, and then there were designers who began to imitate, in this process, the processing capacity of the industry gradually refined, and then extended to the surrounding supporting industries, and finally opened a new stage of original design and independent definition of products. ”
Liu Yue said that the same is true for integrated circuits. Although SMIC is an important foundation of the industry, it is still isolated when the entire industry has not yet developed.
"Our design industry has achieved micro-innovation from domestic substitution, and the next step is to lead the development of the industry through continuous independent innovation." More demand and direction will follow, and the rise of the entire industry will become a matter of course. ”
In December 2013, the National Development and Reform Commission, the Ministry of Industry and Information Technology and the Beijing Municipal Government jointly established the Beijing Integrated Circuit Industry Development Equity Investment Fund with a total scale of 30 billion yuan, and Liu Yuehe and his team won the bid for the Beijing Integrated Circuit Design and Packaging and Testing Equity Investment Center Management Company, responsible for the design and packaging of 2 billion yuan of investment management of the sub-fund.
At the same time, with the establishment of the national large fund, the establishment of the semiconductor industry fund of various local governments has made the semiconductor industry investment the main line; the launch of the science and technology innovation board and the gradual implementation of the registration system have also made the semiconductor industry enter the public's vision. For a time, state-owned funds, private capital, and US dollar funds flocked to it, quickly becoming one of the main investment directions of various types of institutions, and the development of the integrated circuit industry was also more vertical and subdivided.
"The influx of money is a good thing, although it will create some bubbles in the short term, but in the long run it will make the market more reasonable; the development of the integrated circuit industry is crucial for China, so the semiconductor industry will become the mainstream investment direction in the future." For new investors, the way to make the use of funds more efficient is to 'tie' the people in the semiconductor circle. In addition, the leading effect of listed companies and the ability to gather resources will accelerate the staking of domestic substitution, and the opportunities for mergers and acquisitions between enterprises are also very large. Liu Yue said.
The first fund managed by Liu Yue was mainly based on investing in projects after the B round, such as Weier Shares, Shengmei Semiconductor, SUL Micro Technology, etc., and led the merger and acquisition of Omnivision Technology and Chip Semiconductor ISSI.
In 2018, when Weier shares planned to acquire Haowei Technology, the total assets of Howey Technology were almost 5 times that of Weier shares, and this acquisition was also described by many media as "snake swallowing elephants". After the completion of the merger, Weier co., Ltd. became the strongest CMOS chip manufacturer in China, and its performance ushered in an explosive period.
In addition to Weier's acquisition of Howey, the overseas mergers and acquisitions carried out by Tsinghua Tsinghua Group before, and the acquisition of NXP RF chip company by Jianguang Assets have made China start late in the semiconductor industry, and the technical level of enterprises has lagged behind that of foreign countries, and it has been possible to obtain high-quality assets and core technologies of world-class companies through mergers and acquisitions, and has also made China's semiconductor industry chain develop faster than in the previous decade.
Re-departure (2018~Present)
In the integrated circuit industry, the chip is the final product of the semiconductor industry, provided by the design company to the terminal enterprise; the investment of manufacturing enterprises is large, the threshold is high, and it is the industrial core of China's semiconductor industry; the field of equipment materials EDA is the key to avoiding the industry being subject to people, and it is a bottleneck that the industry urgently needs to solve.
In September 2018, the Puhua team cooperated with Suzhou Yuanhe Holdings and the National Integrated Circuit Industry Fund to establish a management company Yuanhe Puhua (formerly known as "Yuanhe Huachuang"), which became the management team of the Yuanhe Puhua Integrated Circuit Industry Investment Fund.
The first phase of The Yuanhe Puhua Fund is 3.28 billion yuan, focusing on industrial investment in integrated circuit design and related applications, and the investors include Yuanhe Holdings, the National Grand Fund, and the Jiangsu Provincial Government Investment Fund.
"When Puhua was first established in 2014, Chinese capital began to return to China from overseas, and at the same time there were opportunities for overseas acquisitions, and our team seized the opportunity to successfully complete two cross-border mergers and acquisitions. At the same time, after more than ten years of growth, domestic IC companies have begun to take shape, and we have selected some high-quality enterprises from them to increase their size and accompany their growth. Liu Yue said that in 2018, the Yuanhe Puhua Fund was established, and after only four years, the global IC industry has undergone tremendous changes, so the team timely adjusted the investment direction from the main investment design industry to the upstream and ecology of the industry, expanding the coverage of the industry.
According to public information, Yuanhe Puhua will focus on the whole industrial chain of integrated circuits, including integrated circuit design, equipment, materials and new process technologies, key IP research and development and technical services, tool chain development, distribution, etc.; the investment stage takes into account early and growth stage investment, and can also help domestic platform enterprises achieve leapfrog development through mature investment and mergers and acquisitions.
In Liu Yue's eyes, the future is not afraid of more new attempts. "When the little yellow car first came out, I would experience it every time I went to a city, but because of the restrictions on the direction of the fund industry, I had no chance to invest." We also invested in Bitmain early on and I love these young people's businesses, full of energy. "The fund's investment direction is broader, and the track will be wider." ”
Before the end of the interview, Liu Yue shared a small story with the reporter.
"The name Puhua came up with me." She said proudly, "Puyu Hunjin is not only the quality of the founders we value, but also the mentality of our own projects." For the name of this fund, we have offered a reward of 10,000 yuan. ”
At the age of forty, she has experienced the ups and downs of SMIC's ten years; at the age of fifty, she has led the business game with many leading enterprises; and now, liu Yue, who is sixty years old, is like the word "Pu", and has returned to the original innocent mentality.