I Am the Third-Generation Heir of a Conglomerate - Chapter 515



Only Noblemtl

## 515. Food Cartel (5)

Dutch semiconductor equipment manufacturer ASML.

ASML was the super power that had a monopoly on the semiconductor equipment industry.

However, if you look at just sales, it was by no means a large company with sales of only 14 trillion won.

Taewoo Semiconductor’s annual sales were approximately 350 trillion won.

That was a difference of 25 times compared to ASML.

The gap was larger before, but it is now 25 times larger, as sales of EUV exposure equipment, a high-performance equipment, have increased since last year.

Still, I flew all the way to the Netherlands myself.

ASML’s value in the semiconductor market will become increasingly important, so it was necessary to form a better relationship than we have now.

“It is an honor to meet Chairman Kim Min-jae of Taewoo Group.”

“I should have come to see you sooner, but it’s only now that I’ve seen you. Nice to meet you, President Peterson.”

Peterson, Chairman of ASML.

He came out to the main gate to greet me.

That was because ASML’s largest customer was Taewoo Semiconductor.

Every time Taewoo Semiconductor built a semiconductor city, complex, or expanded its factory, ASML’s sales and stock price increased.

So I can’t help but be happy.

It was Chairman Peterson who shook my hand with a sincere smile.

“I have visited Korea several times, but I have only met with President Lisa and President Wei and returned. I cannot express how much I regret each time.”

“I apologize for not being able to make time for you, even if it meant adjusting my schedule.”

“I never meant to apologize. Oh, you left your important guest outside for too long. Please come inside.”

We were guided to the reception room by Chairman Peterson.

It was a very neat and tidy building, as expected from a top company in the Netherlands.

Should I say that I felt the spirit of craftsmanship? In addition, I felt a strong sense of pride among all the employees.

“Compared to Taewoo Group, it is a very humble company.”

“It is absolutely not naive. And what does scale matter? Isn’t technology more important than scale? No one would think that ASML, which has the world’s best technology, is naive.”

He spouted out compliments as quickly as if he had a motor attached to his mouth.

If I could build a good relationship with just a few words, I would even consider putting a motor in my mouth.

“I don’t know how to react when you say that, Chairman. I have admired Taewoo Group’s technological prowess for a long time. Didn’t most of the new technologies used these days pass through Taewoo Group’s hands?”

“We were able to make that investment because we know well how ASML has grown through its technological prowess.”

He overdid the compliments.

Fortunately, the response was very good.

As Chairman Taewoo Group continued to praise him, the corners of Chairman Peterson’s mouth gradually turned upward.

“I am truly grateful that you have been so proactive in purchasing EUV exposure equipment this time. How is the application of EUV equipment going?”

“Production has already begun, and semiconductor production using EUV equipment is expected to begin in earnest starting next year.”

EUV exposure equipment was essential for processes below 7 nanometers.

EUV exposure equipment was purchased at a cost of hundreds of billions of won because it is absolutely necessary to create semiconductors with superior performance.

“I came to the Netherlands in person because I wanted to talk about exposure equipment anyway.”

“Is there a problem?”

“Isn’t quantity the problem? Last year, only 18 EUV exposure machines were produced.”

“Didn’t you take 9 out of 18 from Taewoo Semiconductor? There are 5 companies that want EUV equipment, but Taewoo Semiconductor took half of them, so the remaining 9 are being divided among 4 companies.”

EUV exposure equipment worth at least 200 billion won.

Semiconductor companies were reluctant to introduce large quantities due to the high price.

In addition, since semiconductor productivity through EUV exposure equipment had not yet been secured, many companies were planning to introduce the equipment after stabilization.

But Taewoo Semiconductor was different.

Because we knew in advance that the number of EUV exposure equipment owned would soon become competitiveness.

We aggressively pursued the introduction of EUV, and as a result, we were able to bring 50% of our production to Taewoo Semiconductor.

“I was just trying to secure equipment based on my stake.”

“It is true that Taewoo Semiconductor holds a large stake in EUV development. That is why other companies are unable to make any significant protests.”

Share in EUV equipment development.

Several companies have invested heavily in developing EUV equipment.

You can secure shares according to the ratio of the investment amount.

Taewoo Group purchased as many shares as possible.

Taewoo Group was able to secure the largest stake by gradually purchasing shares held by other companies, including the 3% stake held by Samjin Electronics.

“Let me get straight to the point. We need more equipment. The factory is already complete and ready to go once we get the EUV equipment.”

“Ahem, I would like to do that, but as you know, ASML has a limited production capacity. However, starting this year, they plan to increase EUV equipment production, so I think they will be able to supply more equipment.”

Just because there is demand doesn’t mean supply will necessarily follow.

Especially in the case of EUV exposure equipment, it was equipment with a more complex design and more parts than a satellite.

So, even if we wanted to increase production, it was difficult.

The answer to solving this problem was ultimately more investment.

“Taewoo Semiconductor is willing to make any additional investment to increase EUV exposure equipment production.”

“Do you want to increase production significantly? But it’s too risky. Since the equipment is so expensive, if demand decreases, you’ll suffer huge losses.”

“Taewoo Group will take full responsibility. We can write a contract to purchase all the exposure equipment produced by ASML. If the contract is not enough, we can give you a down payment right now.”

“When you say down payment, are you saying you are paying for the exposure equipment that has not been built yet?”

“Yes, I will pay you the price of 50 EUV exposure machines right now.”

The price of one EUV device is 200 billion won.

If it was a 50-year-old’s salary, it would be a whopping 10 trillion won.

It was an amount equivalent to ASML’s annual sales and was enough to resolve the risk in one go.

“I would like to accept it, but I cannot accept it right now because I have to negotiate with other clients.”

“So, wouldn’t it be okay if Taewoo Group uses the money it invests to expand the factory and receive priority supply of the equipment produced there? If it’s a contract like that, other clients won’t have any problems.”

I was willing to invest any amount to secure exposure equipment.

Especially now that the semiconductor crisis is imminent, we must secure the equipment.

“May I ask how much money you invested in expanding your factory?”

“We are planning to invest 5 trillion won. With that amount of money, wouldn’t we be able to significantly increase the production of exposure equipment?”

“It is an amount that can increase production by up to 40 units.”

“Then, please allow Taewoo Semiconductor to secure 50% of the existing production and 70% of the equipment produced at the new plant.”

It was a contract for Taewoo Semiconductor to secure approximately 25 units of equipment annually.

As EUV equipment production increases every year, up to 30 units could be possible.

“Can we sign the contract after discussing it with the client?”

“Do you need to negotiate? If there are no objections after notification, I think we can sign the contract.”

“However, it is difficult to proceed with a large-scale contract with Taewoo Semiconductor alone.”

Since when did Super Eul start caring about what other people think?

Especially in these times when the semiconductor market is booming, ASML’s word is law.

Moreover, the moment the semiconductor crisis hits, ASML will surpass Super B.

“Is there any other problem?”

“Actually, there is still the issue of contracting with a new client. So, we need more time.”

New client?

Having EUV equipment does not mean that anyone can produce nano-scale semiconductors.

Only companies with accumulated technological capabilities were able to do so, and there were only five such companies.

So, introducing EUV equipment without any reason could result in wasting money.

But there were semiconductor companies that didn’t mind blowing money.

If a Chinese semiconductor company receives support from China’s semiconductor boom, it is certain that it will try to introduce new equipment regardless of the cost.

“Is it because of the contract with the Chinese company?”

“Ahem, you already know.”

“That contract cannot be concluded. So, don’t worry and just sign the contract with Taewoo Group.”

“The contract is still in effect, despite opposition from the U.S. government.”

Securing customers was an important part, even for Super B.

It was especially important to maintain good relationships with clients that had huge markets like China.

“I understand that the US and Dutch governments have already held discussions. They say that starting this year, a ban on exporting EUV exposure equipment to China will be imposed.”

“I have heard about that, but no action has been taken yet.”

“Then let’s do this. We sign the contract with the precondition that the Dutch government will impose a ban on exports to China. Then there won’t be any problems, right?”

ASML was not just a Dutch company.

We have acquired our current technological capabilities through a merger with an American company.

That’s why it was impossible to sell the equipment without permission from the U.S. government.

If even the Dutch government agreed to that, it would be even more difficult to have Chinese companies as clients.

“You seem confident. The US government’s actions are certainly not trivial, but would you go as far as restricting equipment exports?”

“The Trump administration is more than capable of doing so.”

“Hmm, I guess they won’t even apply the brakes to the DUV equipment?”

DUV, an older device.

I don’t think it’s a big deal now, though.

If the trade war prolongs, the U.S. government is likely to take measures to restrict exports of DUV equipment.

This is why I came to ASML.

One of the reasons for the semiconductor crisis was that China was unable to import ASML equipment.

“That is very likely. Following EUV, it is only a matter of time before export restrictions on DUV equipment are imposed.”

“This is a serious problem.”

“It’s not a serious problem at all. Wouldn’t it be solved if Taewoo Semiconductor bought all the DUV equipment to be exported to China?”

The acquisition of equipment wasn’t limited to just new equipment.

I personally flew all the way to the Netherlands to secure a large quantity of old equipment.

“The quantity currently under contract must be handed over to a Chinese semiconductor company.”

“I’m not looking to secure the equipment right now. I’m looking to secure it in advance for the quantity that will be produced starting next year.”

The biggest seller of older equipment was China.

But now that Taewoo Group has entered the fray, China will not be able to sweep up old equipment.

“What are you going to do with your old equipment?”

“We are planning to build a large semiconductor complex in India and Vietnam. We need more old equipment than Chinese semiconductor companies can buy. And we will pay for it up front.”

Chairman Peterson couldn’t hide the corners of his mouth.

ASML could not help but welcome the situation as it increased the number of vendors that relied on the Chinese market for older equipment.