Tech giants start by disassembling systems

Chapter 170

2020 11 Month 21 Day.

Bosch China's official response came faster than Lin Wei had anticipated.

At 8:00 AM sharp—exactly 22 hours after Lin Wei's "Letter to the Public" was published—Bosch China's official WeChat account pushed out a statement.

Title: A Solemn Statement Regarding Recent False Online Statements

Signature: Bosch (China) Investment Co., Ltd.

The entire document is 1800 words long. The wording is restrained, but every word has been reviewed by the legal team.

The core content of the statement is divided into three parts:

First, regarding the "joint laboratory" matter.

"The joint laboratory project between Bosch and the School of Microelectronics at Beihang University was a normal industry-academia-research collaboration project, and the use of project funds was compliant and transparent. Associate Professor Fang Jianhua's personal actions do not represent Bosch's position. Bosch had previously terminated the joint laboratory agreement and is cooperating with the relevant investigation."

We regret to note that some companies are attempting to link the personal actions of a university professor with Bosch.

Second, regarding the acquisition of MicroPort Sensing Technology.

"Bosch's acquisition of equity in Shenzhen MicroPort Sensing Technology Co., Ltd. is a normal business investment based on Bosch's global MEMS business strategic plan. The timing of the acquisition is unrelated to any third-party company's technology verification plan."

We respect the technological achievements of every colleague, but at the same time, we do not accept any unverified allegations of association.

Third, regarding the cooperation with Hangxindatong.

"The strategic cooperation between Bosch and Hangxindatong Technology is an independent decision made by both parties based on market demand. Market competition is the core driving force for industry progress, and characterizing normal business cooperation as 'encirclement and suppression' is neither in line with the facts nor conducive to the healthy development of the industry."

The last paragraph of the statement:

"The Bosch Group has been deeply involved in the global MEMS field for over two decades, always prioritizing technological innovation and quality as its core competitive advantages. We welcome fair market competition, but reserve the right to pursue legal action against any false statements."

Bosch will continue to deepen its commitment to the Chinese market and contribute to the development of China's manufacturing industry.

……

Lin Wei read the full text of Bosch's statement in her office.

She put down her phone, picked up the coffee on the table, and took a sip. The coffee had gone cold.

"As expected," she said to Zhou Lin, who was standing opposite her.

Zhou Lin asked nervously, "President Lin, they said they 'reserve the right to pursue legal action,' does that mean—"

"They won't sue," Lin Wei said calmly. "A lawsuit requires evidence. They can't provide evidence to prove that what I said was 'untrue.' Because every word I said was true."

She paused for a moment:

"800万联合实验室经费，有北航的财务记录。方建华的'技术质疑指南'，纪检部门已经在调查。微创传感11月18日被收购、250mm 11月19日验证——日期是公开信息。航信达通的天枢晶片合作——博世自己在官网上发的新闻稿。

These are all facts. If Bosch sues me, it's essentially putting this evidence back in court for all to see. They're not that stupid.

Zhou Lin breathed a sigh of relief: "That phrase 'reserving legal rights'—"

"It's for the investors and the German headquarters. It shows that the China region is actively responding." Lin Wei put down her coffee. "But what they really want to do is not to go to court. If you look closely at the wording of the statement—'normal business investment,' 'normal industry-academia-research cooperation,' 'market competition is the core driving force for industry progress'—they are redefining the narrative."

They want to turn the 'encirclement' into 'normal competition,' transforming us from 'victims' into 'over-interpreters.'

Zhou Lin thought for a moment: "Should we respond?"

Lin Wei shook her head: "No response. Yesterday's article said enough. Now it's the market's turn to speak."

She turned on her computer and glanced at her to-do list for the day. At the top of the list wasn't public relations or media coverage, but a short line of text:

Packaging Capacity – 30% Shortfall Solution

That's the real problem.

……

Following Bosch's statement, public opinion did indeed shift subtly.

It's not a reversal, but a divergence.

On Zhihu, a new question was created at 9:00 AM:

How should we evaluate Bosch's response statement? Did Lin Wei overinterpret it?

612 answers in four hours.

The top-ranked answer comes from an institutional account called "MEMS Industry Observer," with a direct and incisive title:

Bosch's statement is a perfect crisis public relations template—but it doesn't answer the questions people want answered.

Bosch's statement is legally impeccable. Every "denial" falls precisely within the range of "cannot be disproven".

'Joint laboratories are normal industry-academia-research collaborations'—indeed, there's nothing wrong with industry-academia-research collaborations themselves. However, the whereabouts of the 800 million yuan funding, the 'technical challenge guidelines' received by Fang Jianhua, and the timing of the open letter from the six professors with Bosch—Bosch hasn't denied these specific details. It only stated that 'Fang Jianhua's personal actions do not represent Bosch's position.'

This translates to: We do not deny that these things happened, but we do not admit that we instructed them to happen.

The statement that "the acquisition timing is unrelated to any third-party company's technology verification plan" is logically unassailable. Because you can never prove that Bosch "knew" Hongyuan Feiniao would conduct verification on November 19th. But Bosch also cannot prove that it "didn't know."

So what is the essence of this statement?

It's not answering 'Is it true?' It's answering 'Can you prove it?'

These are two completely different issues.

This answer received 3.2 upvotes.

The second-ranked answer came from a law professor, and was brief and direct:

Bosch said it "reserves the right to pursue legal action".

Translation: We will not sue, but we hope you think we will.

If Bosch were truly confident of winning, its statement should have said, "We have engaged a legal team to initiate legal proceedings," rather than "Reserving rights."

In a legal context, 'reserving the right' means that we do not intend to exercise this right at this time.

So everyone, there's no need to be nervous.

This answer received 2.8 upvotes.

But there are also dissenting voices.

The fifth-ranked answer came from an anonymous user who claimed to be a "former Bosch employee":

"To be frank, I think Lin Wei's article was indeed a bit of an overinterpretation. I worked at Bosch for three years, and Bosch's industry-academia-research collaboration projects are spread across major universities around the world. An 800 million joint laboratory wouldn't even reach the level of discussion in a meeting within Bosch."

As for the acquisition of MicroPort Sensing—Bosch acquires dozens of companies globally every year. Is it really worth Bosch specifically 'timed' to disgust Hongyuan Flying Bird with a small packaging plant valued at 2000 million?

Not everything is directed at you. Sometimes it's just a coincidence.

This answer received 1.4 upvotes, but the comments section was a complete mess.

The most upvoted comment reads: "A coincidence? Acquired on November 18th, confirmed on November 19th. Do you believe it? I certainly don't."

The second most upvoted comment reads: "A former Bosch employee trying to defend this? Show us his employee badge!"

The third most upvoted comment reads: "Even if 800 million isn't a big deal within Bosch, how do you explain the 'Technical Questioning Guide' that Fang Jianhua received? Did Fang Jianhua make this up himself?"

……

Discussions on Weibo were also divided.

The hashtag #BoschRespondsToLinWeiOpenLetter# reached sixth place on the trending topics list at 10:00 AM, with 170 million views.

However, compared to the 4.3 million views of #HongyuanFeiniaoToThePublic# and the 6.2 million views of #BoschInvested15BillionYesterdaySuChenReturned12.03BillionToday#, Bosch's statement clearly did not receive the same level of attention.

The reason is simple—Bosch's statement was too "correct." So correct that it lacked any emotional value. There were no memorable quotes, no stories, and no human touch.

And Lin Wei's article contains that.

"12.03 degrees is the best statement"—this phrase has become a meme.

"We don't need to cut off anyone's supply; we just need to do what others can't do"—this sentence was printed on the T-shirts of a college student entrepreneurship team.

Bosch's 1800-word statement was no match for Lin Wei's single sentence.

This is the power of narrative power.

……

In the WeChat group, the calm analyst sent a long message.

This time, he wasn't analyzing public opinion, but rather a more practical issue.

Calm Analyst:

"Everyone has seen Bosch's statement. I won't analyze their public relations strategy; it's pointless. I want to talk about something more important."

Hongyuan Feiniao won the war of public opinion. 12.03 degrees won the war of technology. Lin Wei's open letter won the war of narrative.

But—Hongyuan Flying Bird did not win the supply chain war.

The acquisition of MicroPort Sensing is a done deal. The 30% packaging capacity shortfall is a real problem.

No matter which side the public takes, no matter how beautiful the 12.03 degree is, no matter how well Lin Wei's article is written—if the delivery of Hongyuan Flying Bird's flight control module is delayed due to packaging bottlenecks, then all of this will be in vain.

Technology won. But the supply chain didn't.

This is the biggest challenge Hongyuan Flying Bird will face next.

Old Chen the Flyer:

"@CalmAnalyst, you're right. But Su Chen must have a way, right?"

Calm Analyst:

"Su Chen is currently calculating the partial differential equation for a 300mm module. The packaging isn't his responsibility; that's Lin Wei's."

Xiao Wang from Shenzhen:

"Can Lin Wei handle this?"

Calm Analyst:

"Micro-Sensing is not the only company in China that does MEMS packaging. But as far as I know, there are only three or four companies that can achieve flight control-level precision—that is, a six-axis inertial sensor packaging precision within ±0.01 degrees."

MicroPort Sensing performed best, accounting for 30% of Hongyuan Feiniao's packaging volume. Now that MicroPort Sensing is controlled by Bosch, even if Mr. Wu can continue to supply in the short term, Bosch will definitely gradually tighten its control in the medium to long term.

Therefore, Hung Yuan Flying Bird has two options: First, find other packaging manufacturers to replace them. Second, build its own packaging line.

The first road is fast but unstable. The second road is stable but not fast.

Let's see what Lin Wei chooses.

Old Chen the Flyer:

"Should we take both paths?"

Calm Analyst:

"If the funds are sufficient. However, building a self-contained packaging line requires a significant investment—I estimate at least 5000 to 8000 million yuan, with a construction period of over six months. Hongyuan Feiniao currently has a monthly revenue of 10.8 billion yuan, so funding isn't an issue. The issue is time."

Xiao Wang from Shenzhen:

"Six months...that just happens to coincide with the timeline for the 300mm verification."

Calm Analyst:

"Yes. So these six months are crucial. Technically, Su Chen is pushing for 300mm. In the supply chain, Lin Wei needs to address the packaging gap. In the market, Bosch is building a base in Suzhou. In education, the Seed Program will launch next spring at 12 pilot universities."

The first half of 2021 was the decisive window for Hongyuan Flying Bird and Bosch.

If the 300mm verification is successful and the packaging capacity can keep up, then Hongyuan Feiniao will be firmly established.

If any link in the chain goes wrong—once Bosch's Suzhou plant goes into production, its annual capacity of 20 billion units will overwhelm them.

The pilot, Old Chen, sent a thoughtful emoji.

Xiao Wang from Shenzhen:

"Suddenly, I don't feel so optimistic anymore."

Calm Analyst:

"We should never be optimistic. 12.03 degrees is impressive, but business competition isn't won by a single data point. Su Chen is a genius, but even geniuses need supply chains, production capacity, and time."

Bosch is not Motorola. Bosch won't sue you for 100 billion, and Bosch won't hold a press conference to condemn you. Bosch will quietly build a factory with an annual output of 20 billion units, and then crush you with its production capacity.

This is more terrifying than any information war.

The group chat was quiet for a long time.

Old Chen the Flyer:

"Does Su Chen know any of this?"

Calm Analyst:

"His phone has been off for two days."

Old Chen the Flyer:

"..."

Xiao Wang from Shenzhen:

"..."

Calm Analyst:

"But then again, he did the same thing last time. He did the 200mm verification with his phone off, and the result was an industry-changing outcome."

Perhaps we shouldn't worry about Su Chen. What we should worry about is whether we're keeping up with his pace.

Flyer Lao Chen sent a thumbs-up emoji.

……

Meanwhile, on the third floor of the Hongyuan Feiniao headquarters in Nanshan District, Shenzhen, far from the eye of the storm, Lin Wei was holding an internal meeting that she didn't want any outsiders to know about.

Only three people attended the meeting: Lin Wei, Purchasing Director Zhao Ming, and Production Director Sun Lei.

Conference Topic: Packaging Capacity Replacement Solutions Following the Acquisition of MicroPort Sensing

"The current situation," Lin Wei tapped the table, "MicroPort Sensing handles 30% of our MEMS packaging. Bosch acquired 67% of the shares, but Lao Wu—that is, Wu Guoping, the founder of MicroPort Sensing—remains in management with a 5-year retention agreement. He will continue to supply in the short term. But—"

Zhao Ming chimed in, "But Bosch can adjust MicroPort Sensing's customer priorities at any time through a board resolution. A 67% controlling stake means Bosch has absolute say on the board. Even if Lao Wu wanted to continue supplying us, he might not be able to make the decision."

"So we need to prepare for both possibilities," Lin Wei said. "Zhao Ming, which other domestic packaging companies can produce MEMS packaging with flight control-level precision?"

Zhao Ming opened his notebook, which contained a list:

"There are many companies that do MEMS packaging, but only three can achieve flight control-level precision—that is, a six-axis inertial sensor packaging precision within ±0.01 degrees."

The first company is Suzhou ChipMOS Technologies. It's a listed company with the strongest technical capabilities, but their production lines are already largely occupied by Bosch's MEMS sensor orders. Approaching them is tantamount to snatching production capacity from Bosch, which is extremely difficult.

The second company is Wuxi CR Micro Packaging Division. It's a state-owned enterprise with decent technology, but they only started flight controller-level packaging last year, and their yield rate is around 87%. Our required yield rate is over 95%.

The third company is Dongguan Hongyuan Precision. It's a small factory, but the owner has a technical background, and the packaging precision is quite good. The problem is its small production capacity; it only has a monthly capacity of 50 units, while our monthly demand is 200 million units.

Lin Wei remained silent for a while.

None of the three are perfect.

"Yes." Zhao Ming closed his laptop. "That's the brilliance of Bosch's acquisition of MicroPort Sensing. MicroPort Sensing is the best company in China at packaging flight control-grade MEMS. Acquiring MicroPort Sensing is like putting a stranglehold on us."

Lin Wei turned to look at Production Director Sun Lei: "What about building our own packaging line?"

Sun Lei adjusted his glasses: "Technically, it's not a problem. Our engineering team is capable of building a flight control-grade MEMS packaging line. But—"

"How much? How long?"

"Equipment procurement plus factory renovation will cost approximately 6000 to 8000 million yuan. From project initiation to trial production, it will take at least six months, if everything goes smoothly."

"Six months." Lin Wei repeated.

Six months. May 2021.

This coincides with the expected tape-out time for Hangxindatong's Tian Shu chip. It also coincides with the earlier-than-expected target production time for Bosch's Suzhou plant (the preparation period before Q3). Furthermore, it falls within the expected timeframe for Suchen's 300mm verification.

All timelines converge on the first half of 2021.

"Let's take both paths," Lin Wei decided.

"In the short term—Zhao Ming, you should contact Wuxi CR Microelectronics and Dongguan Hongyuan Precision. Regarding CR Microelectronics' yield rate issue, see if we can send engineers to help them optimize their processes. As for Dongguan Hongyuan's production capacity issue, see if they are willing to expand production; if so, we can provide advance payment."

"Long-term—Sun Lei, you immediately initiate the project to build your own packaging line. The budget is 8000 million; I'll approve it today. The location is right next to our R&D center in Nanshan District—have you seen that vacant factory building?"

Sun Lei nodded: "I've checked, the area is sufficient."

"Okay. The goal is to start trial production by May next year, and begin mass production in June. The production capacity target is 300 million units per month."

Zhao Ming and Sun Lei exchanged a glance, both seeing the seriousness in each other's eyes.

With a monthly production capacity of 300 million units, this is 200 million more than the 100 million units currently handled by MicroPort Sensors. Lin Wei is not just filling the gap; she is preparing for future expansion.

"There's one more thing," Lin Wei's voice lowered, "The content of this meeting—don't let any outsiders know. Especially the matter of building our own packaging line."

"Why?" Zhao Ming asked.

"Because if Bosch knew that we were building our own packaging line, they might have accelerated the tightening of the supply of minimally invasive sensors. The reason why Lao Wu is still supplying us now is because Bosch feels that we 'have no alternative for the time being,' so they are not in a hurry to take action."

Once they find out we are building our own—they will immediately cut off MicroPort Sensing’s supply, creating a window of opportunity for a supply chain disruption before our new packaging line is even built.

This window of opportunity could be three to four months, which is enough to cause significant delays in the delivery of our flight control modules.

Zhao Ming and Sun Lei nodded at the same time.

"Understood."

"Okay. Meeting adjourned."

Lin Wei stood up and walked to the window.

Several vehicles bearing media logos were still parked in the parking lot outside. The reporters hadn't left yet.

She picked up her phone and sent Su Chen a WeChat message:

"I'll handle the packaging. You focus on the 300mm."

The message has been showing as unread since it was sent.

Su Chen's phone was still off.

Lin Wei smiled and put her phone back in her pocket.

"This person..." she said softly.

Then he turned back to his desk and opened the budget report for the packaging line.