Tech startup: I really do make mobile phones!

Chapter 229 Global Optical Supply Chain

The morning light in Eindhoven filters through the glass curtain wall of the ASMI headquarters building, creating interplay of light and shadow in the corridor.

Zhou Mingzhe stood outside the inspection room, his fingertips unconsciously tracing the cool surface of the special carbon fiber transport box.

Inside the enclosure were originally eight CK-PAS alignment subsystems. OrangeTech's $3200 million worth of products for this quarter have been delivered to the acceptance room.

Zhou Mingzhe was quietly waiting for the client's acceptance.
The door opened, and Vice President Martin's usually stern face appeared in the doorway, but surprisingly, the corners of his mouth had a slight upward curve.

“Zhou!” he said in a loud voice, with the decisiveness characteristic of Germans: “Everything is up to standard! The final payment will be settled within a week, as per the contract!”

The anxiety subsided, and a perfectly timed smile bloomed on Zhou Mingzhe's face.

"It is an honor for Orange Tree, Mr. Martin!"

"Honored?" Martin shook his head and led him to the inner viewing corridor, where several enormous lithography machines were operating silently in the huge cleanroom below.

“Look at those NXE:3300Bs. After using your Orange Micro Motor alignment system, the yield rate has increased by a full ten percentage points! Those old guys on the board are looking at me much more gently now.”

A ten percentage point improvement in yield!

Zhou Mingzhe was shocked. Even with great confidence in his own products, this number still exceeded his expectations.

He suppressed his surging emotions, his gaze sweeping over the machines that determined the fate of the global chip industry, his tone calm and confident.

"This proves that Asma's choice of Orange Tree was the right decision! Moreover, our capabilities go far beyond this."

He turned around and looked directly at Martin.

"Mr. Martin, we have developed a high-performance sunshade product based on a brand-new optical glass technology. I wonder if ASMI would be willing to give us a chance to cooperate?"

“A sunshade?” Martin’s smile faded slightly, and he reverted to his shrewd tech officer persona: “Zhou, you know, we have a long-term partner in this area, KWME, and they do a good job.”

KWME is a local manufacturer of cleanroom optical glass, whose main products include lithography machine shields, aircraft windows, dental implants, and robotic modules.

This is a small company specializing in the manufacture of cleanroom windows.

“I understand! But technology is always advancing, isn’t it?” Zhou Mingzhe said calmly and confidently, “This time, we brought actual samples!”

Inside the conference room, when Zhou Mingzhe clearly stated "three-layer coating, molybdenum/silicon/chromium, each layer 0.6 nanometers thick," Martin's brows furrowed instantly, and he tapped his fingers lightly on the table.

"0.6 nanometers?" His tone was skeptical without any attempt to hide it. "Zhou, the current industry benchmark is 0.4 nanometers."

With this thickness, three layers stacked together, how do you guarantee the light transmittance?
What about internal stress?
This does not meet the requirements of high-end lithography machines!

Expected reaction.

Zhou Mingzhe's lips curled up almost imperceptibly. Martin's questioning had precisely hit the core of the problem and given him the opportunity to demonstrate his true strength.

"Mr. Martin, coating thickness is only one aspect of the process."

Please allow me to introduce you to the cornerstone of this light shield—Chengke's self-developed FH-3.0 optical glass.

He gave Martin no further chance to interrupt, and a series of extremely precise data poured out smoothly and powerfully, as if it had been meticulously programmed:

"In terms of optical performance, the 193-nanometer deep ultraviolet band has a substrate transmittance of over 98%, which can reach 99.9% after coating."

Refractive index 1.560713
Physical properties: its coefficient of thermal expansion is as low as 0.1 x 10⁻⁶ Kelvin, which is one-hundredth that of ordinary glass.

The ultra-low expansion model can reach 5.4 x 10^-7 degrees Celsius per degree Celsius.

Its mechanical strength is three times that of ordinary glass.
It boasts excellent chemical stability, a softening point of approximately 3780 degrees Celsius, and acid resistance 300 times that of stainless steel.

His speech was steady, yet carried an undeniable penetrating power.

From spectral range, density, hardness, and electrical insulation to the nanoscale flatness and near-zero thermal expansion protection required for lithography applications.

Then there's the remarkable heat recovery performance, which can be described as "cutting-edge technology," capable of repairing microcracks smaller than 0.9 millimeters with localized heating at 300 degrees Celsius.
Martin, who had initially been leaning back in his chair, had somehow leaned forward, and the doubt in his eyes was gradually replaced by astonishment.

He raised his hand, signaling Zhou Mingzhe to stop, picked up the seemingly ordinary high-end sunshade sample on the table, examined it carefully under the light, and felt its extraordinary texture with his fingertips.

"Wait, Zhou!"

Martin's voice had a slightly hoarse quality that was barely perceptible.

"You mean, you've developed a glass substrate with such outstanding performance, but because the finishing process, mainly the coating process, isn't quite up to par yet, you can only use it as a light shield for now?"

"That's understandable!"

Zhou Mingzhe readily acknowledged his shortcomings, but his confidence remained undiminished.

Perhaps this 'rough jade' is not smooth enough, but its essence is enough to open many doors for it.

Martin fell silent, his fingers tapping unconsciously on the table, clearly weighing his options intensely.

The partnership with KWME is solid, but the performance parameters of OrangeTech's substrate material are too tempting, especially its 99.9% light transmittance and its almost abnormal thermal stability and self-healing ability.
"Price?" he finally uttered.

Zhou Mingzhe knew that the critical moment had arrived.

"High-end model, $1.2 million; low-end model, $300,000."

This price is one-third lower than KWME's similar products!

Several suppressed gasps echoed in the conference room, coming from Martin's entourage.

Martin looked sharply at Zhou Mingzhe, seemingly trying to discern the intentions behind the price.

Zhou Mingzhe looked back frankly, stating that using price to gain market share was a breakthrough strategy devised by Orange Technology's top management, and there was no need to hide it.

After a long silence, Martin slowly spoke: "Leave the samples. We need to test them. I will evaluate them personally and then decide whether to report to President Winnick."

"Wait for good news!" Zhou Mingzhe pushed the two sealed samples over.

That evening, in the suburbs of Eindhoven, Paul's two-story house was brightly lit, filled with children's laughter and the aroma of food.

As Zhou Mingzhe arrived at the door carrying the carefully prepared set of Shu embroidery dolls, Paul came out laughing and called out in heavily accented Chinese, "Zhou! You've finally arrived!"

The birthday girl, Ellie, dressed in a pink princess dress, rushed over like a happy butterfly, took the "rabbit lantern" and the "peony doll," and couldn't put them down.

The dinner atmosphere was relaxed and warm. Fried meat rolls, mashed potatoes, and Zhou Mingzhe's favorite dish was lotus root and bean soup.
There were no formalities, only friendly conversations.

During the meeting, Hans, a colleague from Paul's purchasing department, brought up the Orange Technology alignment system, which had improved the yield rate, and expressed his appreciation for it.

Paul took the opportunity of clinking glasses to whisper in Zhou Mingzhe's ear: "Don't worry, I've inquired with Martin, and his evaluation of your sample is 'the parameters are very impressive'!"

When cutting the cake, Ellie made a wish and blew out the candles, deliberately handing the largest piece to Zhou Mingzhe.

Seeing this scene before him, Zhou Mingzhe felt a surge of warmth in his heart.

Compared to formulaic negotiations in a conference room, this kind of human touch is often more effective at melting away the ice of business barriers.

The following day, Martin's reply was exactly as expected.

"Zhou, after comprehensive evaluation, we have decided to purchase your low-end light shields for use in some of our DUV lithography machines!" Martin's tone was businesslike.

"As for the high-end models, unfortunately, your Orange Technology's coating process cannot currently meet our ultimate requirements." Zhou Mingzhe sighed inwardly. The most profitable high-end market was indeed blocked by that 0.6-nanometer difference.

But he maintained a polite smile: "Thank you for Asmay's recognition. Even in the low-end market, it's a good start!"

“However,” Martin changed the subject, throwing out an unexpected suggestion: “Your FH-3.0 glass substrate has indeed impressed me.”

I can act as an intermediary and introduce you to KWME. Perhaps you could try supplying them with glass blanks!

A glimmer of hope appears after a period of despair!

Zhou Mingzhe instantly understood Martin's intention: Asma wanted to maintain its relationship with local suppliers, but also wanted to use Orange Science's superior base materials to enhance its product competitiveness.

This is an excellent opportunity to indirectly enter Asmay's supply chain!

“Thank you very much, Mr. Martin! Orange Science is very happy to explore the possibility of cooperation with KWME!” Zhou Mingzhe responded immediately.

After the final payment was successfully settled, the Orange Technology team did not return home, but went straight to KWME Company.

At the negotiating table, facing this company that had been importing BF series glass blanks from Germany for many years, Zhou Mingzhe precisely wielded the weapon of price.

After meticulously calculating the EU's internal tax exemption policy, tariff costs, and expected profits, he offered a shocking price of $4350 per ton, which was nearly 20% lower than the price quoted by Sulphur!

The huge price difference, coupled with Asma's recommendation, made KWME's purchasing manager waver.

After several rounds of negotiations, Orange Technology successfully snatched the order from the century-old giant, Xiaote!

With their initial victory boosting team morale, they moved on to Germany, setting their sights on Zeiss, the Mount Everest of optics.

However, at Chase headquarters, they suffered a major setback.

Although the other party's technical lead expressed surprise at the performance parameters of FH-3.0, when the topic of cooperation came up, they simply shook their head politely but firmly.

“Chase and Shot have a long-standing partnership that spans over a century, and we trust our ally’s technology and quality.”

The strong bulwark of allies is unshakeable.

Interestingly, the news seemed to have grown wings.

The people from Xiaote Company soon took the initiative to approach us, with a clear intention: to import a batch of FH-3.0 glass blanks.

Zhou Mingzhe saw through the other party's intention to "learn from and study" at a glance, but remained calm on the surface.

He took advantage of the situation to raise the price and put forward harsh conditions.

Consumers bear 7% of the tariff, and purchase 100 tons at a time in a bundled sale, with a unit price as high as 6,000 US dollars!

Watching the consumer representative grit his teeth and sign the contract after weighing the options, Zhou Mingzhe smiled gently and signed his name on the contract.

When Chengke processes Phoenix Glass, the special auxiliary agent added during the melting process is provided by Chengchuang, and its core components remain a top secret to this day.

He wanted to see if the Chinese people could deduce the secret of turning stone into gold from this rough finished product.

During their trip to North America, they once again encountered setbacks with Chase's old rival, Korning.

Similar to Orange Technology, Kangning also operates on a complete industry chain model, forming its own system. It basically produces its own glass blanks, making it difficult for even the most advanced technology to penetrate the market.

After suffering a series of setbacks, Zhou Mingzhe pinned his last hopes on the final stop of his global trip—Japan.

Headquarters of Mori Crystal Co., Ltd., Toto.

Chief Technology Officer Kenichi Tanaka, a "familiar face" who had previously purchased OrangeTech's machine tool alignment system and micro motors, warmly received Zhou Mingzhe.

After listening to Zhou Mingzhe's predicament, Tanaka Kenichi adjusted his gold-rimmed glasses and pondered for a moment.

"Mr. Zhou, I have personally witnessed your company's technical strength. Perhaps I can introduce you to Masao Kobayashi, the executive director of Asahi Electric Company!"

"Asahi Glass?" Zhou Mingzhe was somewhat surprised. It was a well-known optical glass giant in Japan and even globally, a peer, and a potential competitor.

"Yes!" Tanaka Kenichi nodded and lowered his voice: "In recent years, Asahi Shizuko's technological research and development seems to be half a step behind that of Kang Ning and Xiao Te."

In the optical glass blank market, the high-end market was taken over by Xiaote, the low-end market was taken over by Kangning, and the mid-range market share of Xuxiaozi was also severely eroded.

They may be in dire need of strong external support.

Thanks to Kenichi Tanaka's matchmaking, Zhou Mingzhe's meeting with Asahi Shizuko's executive director Masao Kobayashi went surprisingly smoothly.

Faced with the overwhelming performance parameters of the FH-3.0 and the cooperation proposal that Orange Technology was willing to supply raw materials at a highly competitive price, Masao Kobayashi quickly made a decision after several internal meetings!
A mutually beneficial collaboration was thus established.

Orange Technology provides FH-3.0 glass preforms, and Asahi Glass repackages them under its own brand, jointly launching a so-called "cooperative R&D" new product - the "XC series" optical glass preforms.

As soon as the news was announced, Asahi Shimbun's stock price on the Tokyo Stock Exchange soared, gaining both fame and market confidence.

Meanwhile, Orange Technology secured stable orders behind the scenes, successfully extending its reach into the global optical glass supply chain.

This is a typical win-win situation. Asahi Shiseido has reaffirmed its mid-range market position, while Orange Technology has improved its technology level by relying on a large number of OEM orders from Asahi Shiseido.

Shenzhen, office of the general manager of Orange Technology.

After reading the detailed email report that Zhou Mingzhe had copied to him, Chen Mo's gaze finally fell on the terms of cooperation with Xu Xiaozi, and he couldn't help but chuckle and shake his head.

"This Xu Xiaozi is more adaptable than I thought!" he muttered to himself.

After all, the Japanese companies that Chen Mo remembered were generally more conservative!

Chen Mo then went online to look at a profit analysis report for the optical glass industry and sighed.

High-purity quartz sand with a purity of 9.99% or higher is monopolized by Unimin in North America, with a market share as high as 90% and a profit margin of up to 60%.

High-purity quartz sand is not only a raw material for optical glass, but also a source of raw materials for chips.

Optical system integration, led by Zeiss, with a profit margin of 43%.

Currently, the profit margin for glass blanks that Orange Technology can produce is only 22.18%.

Ultimately, OrangeTech's optical glass business, which is still in its early stages, is at the bottom of the profit margin in the industry chain!

Chen Mo took the report, his gaze sweeping over the shocking numbers before finally settling on the undulating outline of the Balcony Mountain outside the window.

"You have to eat one bite at a time!" His voice was calm and firm as he said to himself, "First, let's use Xu Xiaozi's 'alias' to keep our Phoenix Glass alive and gain a foothold."

The short-term goal is to replace third-party optical glass preform suppliers like Asahi Glass and Shoten Glass, becoming the indispensable "flowering crystal" in the "Eye of God"!

Chen Mo paused, a sharp glint flashing in his eyes.

Once Orange Glass has established a firm foothold in the optical glass preform market, then we can discuss system integration, and even move upstream into high-purity silica sand!

The road was long and full of thorns.

However, Orange Technology has already used FH-3.0 as a stepping stone to pry open a crack in the seemingly indestructible global supply chain barrier for optical glass.

The light has already come in; this is a good start!
(End of this chapter)