Ren Zhengfei's Heartbroken China's 300 Billion Chip Giant Instantly Bankrupts, Threatening to Buy TSMC

Since the 1980s, foreign investment has gradually entered the Chinese market, and we have gradually adapted to the power of capital. We have always used money as a tool to introduce leading technology, world-class talents, and production lines

Since the 1980s, foreign investment has gradually entered the Chinese market, and we have gradually adapted to the power of capital. We have always used money as a tool to introduce leading technology, world-class talents, and production lines. Then, relying on the huge Chinese market, we profit time and time again, and this cycle continues.

However, this development path of "trade, industry, and technology" has made most Chinese enterprises accustomed to achieving quick success and wealth, while neglecting deep investment in technology. In the end, we find ourselves controlled by the United States, and all of this will be explored in the following chapters.

As Ren Zhengfei once said, "Making chips is not just about throwing money, it also requires the wisdom of scientists!" Even during Huawei's biggest challenge, Huawei still pays high salaries to support over 7000 employees and scientists in the Hisense department. Because they are the key to Huawei overcoming the US blockade!

In 2022, Zhao Weiguo suddenly disappeared from public view, and it is rumored that he has been taken away for investigation. Then, eight months later, the findings came to light, shocking. Zhao Weiguo is accused of corruption, bribery, misappropriation of state-owned assets, and illegal profit for family and friends, resulting in a serious loss of state-owned assets. Zhao Weiguo once pushed the chip giant Purple Light Group, which had assets of 300 billion yuan, to the brink of bankruptcy, with numerous crimes that are difficult to count.

Next, we will look back at the past and present lives of Purple Light Group to understand this remarkable turning point.

In the 1980s, many universities began to establish school run enterprises. In 1988, Tsinghua University established Tsinghua University Science and Technology Development Corporation, and in 1993, it was renamed Tsinghua Ziguang Group. Purple is the color of Tsinghua University, so "purple light" represents the "light of Tsinghua University".

In 2004, Zhao Weiguo independently founded Beijing Jiankun Investment Group after earning his first bucket of gold. In just 5 years, he earned 45 billion from his 1 million yuan in cash! At the peak of Zhao Weiguo's career, Ziguang Group was deeply mired in diversified operations and even unable to pay wages on time.

The turning point of Ziguang Group occurred in 2009, when Tsinghua University launched a mixed ownership reform. Zhao Weiguo took over 35.29% of the shares of Ziguang Group for only 1.53 billion yuan, becoming the second largest shareholder and naturally becoming the CEO of Ziguang Group.

Then, facing the dilemma, Zhao Weiguo began to find a way out. He understands that the threshold for integrated circuits and chips is extremely high and the technical difficulty is enormous, so capital operations must be carried out in order to survive. So he turned his gaze to Spreadtrum.

Next, Zhao Weiguo's ambition grew stronger and he began a crazy merger and acquisition model. He acquired a 51% stake in Xinhua San for $25 billion, participated in the capital increase of TCL Group for RMB 1 billion, and invested in Acadine for $100 million During the five years from 2013 to 2018, Zhao Weiguo initiated more than 60 mergers and acquisitions, using over 100 billion RMB in funds!

From financial data, Zhao Weiguo has achieved great success. When taking over Purple Light Group, the company

The value was only 1.3 billion, but by 2019, the market value had skyrocketed to 297.8 billion, with an annual revenue of 70 billion. Zhao Weiguo's personal wealth also reached 25 billion yuan, and he built a semiconductor empire with his own efforts.

However, capital operations ultimately cannot support a chip empire. By 2020, the debt scale of Purple Light Group had exceeded 200 billion yuan. Eventually, it was sued for a debt default of 6.8 billion yuan, triggering a series of chain reactions and ultimately bankruptcy liquidation. This balloon was finally blown open! The state-owned chip giant, once worth 300 billion yuan in assets, completely collapsed in an instant!

The government also realized that state-owned assets should not fall into the hands of individuals, so it took over the Purple Light Group and carried out a restructuring. However, during the restructuring process, Zhao Weiguo repeatedly spread false information in an attempt to hinder and interfere with the restructuring process, and his boldness and recklessness can be described as astonishing.

Summary:

Nowadays, Huawei has returned with Kirin 9000S and 5G King, marking the establishment of a de Americanized semiconductor industry chain in China. At this critical moment, we must protect our scientific research achievements, prevent research rats, and prevent the loss of state-owned assets. We should learn from the past and not let the efforts of scientists go to waste.

This story reflects the tortuous development process of China's semiconductor industry, as well as the limitations of personal ambition and capital operation. Ultimately, technology and innovation remain the key to the long-term stable development of the semiconductor industry.

Inspiration:

Since the 1980s, Chinese enterprises have accumulated valuable experience in introducing foreign investment and developing the economy, but at the same time, some problems have also been exposed. Firstly, relying on foreign investment to introduce technology and funds has its limitations, and more emphasis should be placed on independent innovation and scientific research. Secondly, although capital operation and speculative behavior can rapidly expand enterprises, excessive reliance on this model may lead to financial risks. Finally, state-owned assets should be properly managed to prevent loss.

Summary:

There are many successful cases in China's economic development process, but there are also some failed experiences. The stories of Zhao Weiguo and Ziguang Group reflect the need for Chinese enterprises to act cautiously in their development process, emphasizing independent innovation and scientific research, while adhering to laws and business ethics. The management and supervision of state-owned assets are also crucial to prevent illegal behavior and loss. In the current era of fierce competition in the global semiconductor industry, China needs more scientific research achievements and technological innovation to maintain competitiveness, while being vigilant against speculative and improper behavior to ensure that national interests are not harmed.

In the current context of fierce competition in the international semiconductor industry, China must pay more attention to independent innovation and scientific research, rather than relying on speculation and capital operation. Firstly, China should increase its support for scientific research, encourage scientists to conduct innovative research, and cultivate more local technology leaders. This will help reduce reliance on external technology and enhance China's competitiveness in core technology areas.

The state also has a key responsibility in managing state-owned assets. Protecting state-owned assets is not only about safeguarding national interests, but also helps to maintain fair competition in the market. The Chinese government should strengthen the supervision of state-owned assets to ensure that they are not abused or misappropriated by individuals or enterprises, in order to avoid triggering financial crises and corporate bankruptcies.

Finally, China needs to develop healthier and more sustainable economic policies based on learning from past experiences and lessons. Developing the economy is not only about growth figures, but also about long-term stability and sustainability. Policy makers should encourage enterprises to make more efforts in technological innovation, talent cultivation, and rule of law construction to achieve long-term prosperity and stability goals.

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