Behind SMIC’s “Palace Fight” is also a history of semiconductor growth

SMIC’s “infighting” is once again on the table.

On December 15th, SMIC appointed TSMC CEO Jiang Shangyi as the vice chairman of the board of directors on the interim board of directors, which is a rare good for SMIC, which has been plagued by regulation recently. As the former second-in-command of TSMC, Jiang Shangyi helped TSMC. It has conquered all process technologies of 0.25μm-6nm, and SMIC is still struggling to attack advanced processes.

In a dramatic scene, on the evening of December 15, after the news was announced, CEO Liang Mengsong immediately proposed to the board of directors to resign, but this request was not approved on the spot by Zhou Zixue, chairman of SMIC. Affected by this, SMIC’s Hong Kong stocks stopped trading this morning, and after the resumption of trading in the afternoon, Hong Kong stocks fell by more than 8%.

In fact, Liang Mengsong’s resignation may not be a temporary initiative. According to a document provided by SMIC, Liang Mengsong abstained from voting on the board of directors on the appointment of Jiang Shangyi’s motion, which did not affect the overall situation.

In his resignation letter, Liang Mengsong sincerely expressed his grievances in writing – the airborne news was not told until December 9, “I feel very astonished and puzzled”, “The company should give me a comprehensive and fair evaluation of my contributions over the past three years, and I should have the right to accept and appeal”.

For any company, the more cutting-edge talent, the better, especially in a technology-intensive industry like chips. The trouble that arises from this is that the factional forces are fighting endlessly for the right to speak.

Before that, rumors of a feud between Liang Mengsong himself and another co-CEO Zhao Haijun had been reported in the industry.

One mountain cannot tolerate two tigers, and the delicate relationship is reconciled by Chairman Zhou Zixue. Now that Jiang Shangyi’s heavy hammer has fallen, the balance beam of SMIC’s executives needs to be re-adjusted.

01 Semiconductors grow while fighting

Zooming out a bit, the decades of development history of SMIC and TSMC is actually a history of ups and downs.

In the eyes of every employee, TSMC is a disciplined army. The founder Zhang Zhongmou, known as “Zhang Dashuai”, has a supreme position in the TSMC empire. Jiang Shangyi and Liang Mengsong, both of whom were from TSMC, chose to leave one after another, more or less related to their friction with Zhang Zhongmou.

No one dared to challenge Zhang Zhongmou’s authority, so they all turned to their opponents – Liang Mengsong turned to Samsung, and Samsung was able to defeat TSMC for a short time; Zhang Rujing did not want to be subordinate to Zhang Zhongmou, and went to Shanghai to found SMIC, which became the mainland wafer manufacturing industry. the founding figure.

This is SMIC’s luck and misfortune.

There is no such “combat power” powerful figure as Zhang Zhongmou to sit firmly in the Quartet. The three major internal and external factional struggles in SMIC’s history were fierce and even traumatic-because of the patent friction with TSMC, founder Zhang Rujing stumbled out of class; CEO Wang Ningguo , COO Yang Shining “Shuangning” tore each other and finally both were out; and then Jiang Shangyi’s airborne led to the resignation of co-CEO Liang Mengsong.

The first two palace fights do not need to be repeated now, the important thing is the third time.

Liang Mengsong’s fierce reaction this time was related to the two’s previous grievances at TSMC. A person familiar with the matter told 36氪 that when Liang Mengsong was at TSMC, he was demoted by his then boss Jiang Shangyi for various reasons. Liang Mengsong, a super workaholic with a strong personality, originally expected to be promoted, but had no choice but to move from the big office to a small room on another floor. Even “the whole team was transferred and no one paid him any attention”.

After a few months in TSMC, Liang Mengsong finally decided to leave Samsung. At that time, Liang Mengsong ushered in his first career peak.

Samsung founder Li Jianxi once said, “Three Bill Gates can elevate South Korea to a new level, and my task is to find these three people.”

With the support of Liang Mengsong, Samsung mastered Fin FET technology before TSMC in 2011, and after making the decision to abandon 20nm research and development, Samsung, which specializes in 14nm process, also cut off TSMC and won some orders for Apple A9 processors. In Li Jianxi’s mind, Liang Mengsong may be one of the Bill Gates.

The literati are light, and the senior semiconductor masters are just as rebellious.

The good times did not last long. In 2015, Zhang Zhongmou of TSMC once again showed his power and joined the business, political and legal circles of Taiwan. A protracted legal battle eventually led Liang Mengsong to stumble away from Samsung. After the contract expired, he switched to SMIC in 2017.

Jiang Liang and the two met briefly before this. From 2016 to 2019, Jiang Shangyi, who left TSMC with anger, joined SMIC as the third type of independent non-executive director.

At that time, Jiang Shangyi had an oral gentleman’s agreement with Zhang Zhongmou – “no advanced technology, no competition and conflict with TSMC”. During the three-year period of SMIC, Jiang Shangyi did not have the right to speak, while SMIC was in its The contract expired and did not choose to renew it. Therefore, Jiang Shangyi’s brief experience in the unfinished Wuhan Hongxin came later.

But this time is different. Jiang Shangyi, who returned to SMIC as the vice chairman of the board of directors, is second only to Zhou Zixue, the chairman of the board of directors, which means that Liang Mengsong, the co-CEO, needs to report to him in the future.

Jiang and Liang met again on narrow roads. Liang Mengsong, a former subordinate, had to take an oath of sovereignty, so he could only choose to retreat bravely once again.

02 Jiang Shangyi’s ideal meets SMIC’s plan

“Why SMIC’s board of directors did not inspect this period of history, I feel a little negligent,” commented a person familiar with SMIC and TSMC.

The introduction of Jiang Shangyi is a dangerous move for SMIC.

SMIC is another career peak for Liang Mengsong. Under his leadership, SMIC’s 28nm/14nm/12nm/N+1 and other technologies have entered mass production, the development of 7nm technology has also been completed, and the 8 most critical technologies of 5nm and 3nm have also been launched in an orderly manner , and successfully boarded the Science and Technology Innovation Board this year, becoming the largest A-share IPO in a decade.

Zhao Haijun, another co-CEO of SMIC, said that his ability is mainly in operation management. “Emotional intelligence is very high, and he can have a good relationship with Jiang Shangyi”, but technology is not his strength.

Without Liang Mengsong, SMIC’s three years of painstaking management may be delayed or even overturned.

Jiang Shangyi is responsible for leading the strategic direction at TSMC, and the people who really do things are the people at the level of the division chiefs and department managers below. Whether SMIC can make achievements or not depends on how many technical talents Jiang Shangyi can find with strong execution ability.

The human problem is not completely unsolvable.

Jiang Shangyi’s position within TSMC is very high – TSMC has many titles of “uncle and uncle” generation, and Jiang Shangyi is the only person with the “father” generation.

There are many disciples and grandchildren from TSMC in the semiconductor industry. Jiang Shangyi joined SMIC, and his appeal is predictable. This is also confirmed in the Wuhan Hongxin project: although the major shareholder has no experience in the semiconductor industry, the company is also a start-up. After Jiang Shangyi was in place, he still attracted A large number of engineers from UMC, Intel, and TSMC joined.

In fact, Jiang Shangyi, who has retired twice, has entered the public opinion field one after another after leaving TSMC. He has experienced the failure of Wuhan Hongxin, and then bumped into the personnel battle to join SMIC. In fact, he was not short of money, but had unfulfilled ambitions.

At a time when Moore’s Law is approaching the physical limit, the R&D cost of semiconductor innovation is getting higher and higher, and the payback period is also lengthening. At present, only a few semiconductor manufacturers such as Samsung and TSMC are developing advanced process technologies of 5nm and below. Other players, including GlobalFoundries and UMC, have previously strategically abandoned the process research and development of 7nm and 12nm.

Jiang Shangyi has publicly mentioned the importance of advanced packaging in his speeches many times before. In order to cope with the bottleneck of industrial changes and the improvement of circuit technology, Jiang Shangyi believes that the tightness between chips should be improved through integrated systems, in order to make their performance better than a single chip, reducing costs and increasing efficiency.

As early as 2009, Jiang Shangyi was instructed to develop advanced packaging technology, and related achievements were also implemented. People close to Jiang Shangyi told 36氪 that the main reason why Jiang Shangyi left TSMC at that time was because of the divergence between his route vision on advanced packaging and Zhang Zhongmou’s overall vision for TSMC.

It can be said that the slowdown of Moore’s Law has given mainland companies time to overtake in corners, but advanced packaging may be the next fierce competition point for wafer manufacturers. SMIC is the stage for Jiang Shangyi to Display his ambition next. Not long ago, Jiang Shangyi bluntly stated in an interview, “I believe that my dream in advanced packaging and system integration will be realized in SMIC.”

At present, TSMC has laid out four advanced chip packaging and testing factories, and not long ago announced a breakthrough in the advanced packaging technology of 3D Fabric. In this month, SMIC announced that it will set up a new company in Yizhuang. Its business scope is not only 12-inch integrated circuit wafers, but also integrated circuit packaging.

In the context of SMIC’s breakthrough in advanced manufacturing process being strictly restricted, Jiang Shangyi’s vision for advanced packaging may be able to fundamentally help SMIC.

Although SMIC announced this morning that it is working hard to restore Liang Mengsong, it can be seen from the fact that the board of directors did not inform Liang Mengsong in advance this time, and insisted on issuing an appointment order after learning about Liang Mengsong’s attitude of abstaining from voting. matter.

But for SMIC, Jiang Shangyi and Liang Mengsong are both good cards in the process of overtaking on a corner, and it would be embarrassing to lose any one.

But the interesting thing about the semiconductor industry is that cutting-edge technical talents have a high degree of recognition of the industry, and the struggle between them will affect the growth and development of other semiconductor companies. Zhang Rujing is the case, the former Liang Mengsong is the same, and the future Jiang Shangyi is the same.

If Jiang Shangyi successfully stays at SMIC, and Liang Mengsong joins other chip manufacturing companies, the anger of the two old and rare old people may also change the pattern of the world’s semiconductors.

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