Tech Giants: Starting from Bankrupt Companies

110: Chapter 110 A Breakthrough Journey in EuropeTime returns to October 30th, Munich, Germany, at the Infineon headquarters building.

Lin Wan stood in the corridor outside the conference room, looking at the cityscape of this Bavarian capital through the floor-to-ceiling windows.

Munich in late autumn was beautiful; ancient churches and modern glass-curtain-wall buildings complemented each other, trams chimed as they passed by on the streets, and the air was cold and clean.

But she was in no mood to enjoy the scenery.

In the past seventy-two hours, she had slept for less than ten hours.

The negotiations had entered the most critical stage, and every word could influence the direction of the entire cooperation.

”President Lin, they have arrived,” the assistant whispered a reminder.

Lin Wan smoothed out her dark gray suit skirt, took a deep breath, and turned to walk into the conference room.

Opposite the long conference table, Infineon’s CEO, Dr. Karl-Heinz, was already seated.

This sixty-year-old German had graying hair and wore gold-rimmed glasses; he was a typical executive with an engineering background—rigorous and pragmatic.

”Good morning, Dr. Heinz,” Lin Wan greeted in fluent German—this was something she had specifically learned for this negotiation.

”Ms. Lin, your German is very standard.” Heinz smiled, but there was an imperceptible worry in his smile. ”Please, sit.”

After the pleasantries, they went straight to the point.

”We appreciate Spark’s breakthroughs in the field of materials.” Heinz got straight to the point. ”The data on the ’Heavenly Bow’ carbon fiber is impressive. But Ms. Lin, you know our dilemma—the America Department of Commerce’s ban restricts us from exporting any equipment with more than 10% America technology content to China.”

Lin Wan nodded: ”That is why we have proposed a ’de-Americanization’ production line plan. According to our understanding, Infineon has a complete 16-nanometer automotive chip production line in Malaysia, with America technology accounting for less than 5%.”

Heinz exchanged a glance with the technical director beside him.

That production line was Infineon’s secret asset, laid out in advance to avoid geopolitical risks; very few outsiders knew about it.

”That production line... does indeed exist,” Heinz admitted, ”but it is our strategic reserve, not for sale.”

”What if it’s a joint venture?” Lin Wan threw out the bargaining chip. ”Spark and Infineon establish a joint venture company and build a factory in China. Infineon holds 49% of the shares, and Spark holds 51%. The equipment from that production line will be Infineon’s capital contribution. The chips produced by the joint venture will be supplied to Spark’s automotive business first, but Infineon can use them for other customers.”

This plan was very clever.

By using a joint venture format, it bypassed the ”exporting equipment” restriction—the equipment was brought into the joint venture company as Infineon’s investment.

And the 49% shareholding ratio allowed Infineon to maintain influence while letting Spark hold the controlling stake, which complied with China’s foreign investment policies.

Heinz pondered.

The technical director whispered in German: ”This plan... is technically feasible. But America...”

”The America ban restricts technology exports, not investment.” Lin Wan replied in German, which surprised the two Germans. ”The joint venture company is located in China, and the chips produced are sold in China, not involving exports to America or countries using America technology. This is not within the scope of the ban.”

She brought up the legal analysis she had prepared: ”We have consulted with the top international trade lawyers in Europe and America. The conclusion is—as long as the joint venture’s products do not enter the America market and are not used by entities on the America sanctions list, this model is legal.”

The conference room was quiet for a few minutes.

Heinz was quickly calculating the pros and cons.

He was very clear about Infineon’s dilemma: the automotive chip market was exploding, but the America ban restricted their expansion in China.

And China was the world’s largest automotive market; losing it might mean Infineon losing the future.

”What is the investment scale of the joint venture?” he asked.