Cutting-edge technology: Starting with individual stealth equipment

Chapter 103 Industry Leaders Gather at DeepBlue Technology

Unlike the gloomy atmosphere among upstream manufacturers, the atmosphere in the meeting rooms of midstream and downstream manufacturers in the industry was much more relaxed.

After returning to headquarters, Zhao Jiyang from Power Construction Corporation went directly into the general manager's office, placed the data report from the DeepBlue Technology demonstration site on the table, and pushed it in front of the other party.

The general manager flipped through the report page by page, and his gaze stopped when he saw the line "Power generation increased by 122%".

"Has this data been confirmed?"

"Yes, and it's based on on-site testing, with 59 consecutive days of operational data. I've also confirmed it on-site." Zhao Jiyang nodded affirmatively. "President Liu, if all the photovoltaic power stations under our company were to be equipped with Deep Blue modules, the annual power generation could double, and the operation and maintenance costs could be reduced because the modules are lighter, the support structure can be simplified, and installation is faster."

Mr. Liu took off his glasses and looked at Zhao Jiyang: "What about those upstream manufacturers? We signed framework agreements with them for several years."

"It's a breach of contract." Zhao Jiyang said without hesitation, "I've done the math. Although the penalty for breach of contract is not small, if we continue to use the traditional method, the loss of power generation over five years could exceed half of the revenue. Even a primary school student could do that."

Mr. Liu nodded and didn't ask any more questions.

The investment and development department of Huaneng New Energy is also holding a meeting.

"Notify the purchasing department that, effective immediately, all component procurement for new projects is suspended. Procurement will resume once DeepBlue's mass production schedule is finalized. For framework agreements already signed but not yet implemented, the legal department should assess the costs of breach."

"Mr. Ma, isn't this too hasty? The upstream manufacturers haven't even made their statements yet."

"Deep Blue's technology isn't something that will come out tomorrow; it's already out."

"Whoever adopts this technology first among our competitors will have an advantage."

"That's right. We can't wait for the upstream manufacturers to discuss it slowly. They're all in dire straits right now. By the time they come to a conclusion, it'll be too late."

"Everyone, Deep Blue's new technology solution is 42% more efficient than the old technology, which is just over 20%. This isn't just a difference of a few percentage points; it's more than double the efficiency."

"What we fear most is making a directional mistake. We now face two paths: one is to double our profits, and the other is to halve our profits. Which one do you choose? It shouldn't be difficult, right?"

In the period that followed, the photovoltaic industry entered a strange state of stagnation.

There are no new orders, no new contracts, everyone is waiting, waiting for upstream manufacturers to make a decision, and waiting for DeepBlue Technology to come up with a solution.

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Several leading photovoltaic companies held intensive board meetings, and similar debates were taking place in each of their meeting rooms.

Some advocate a head-on confrontation, others advocate cooperation, and still others have proposed a third way to see if they can jointly hunt down DeepBlue Technology.

But the third option was quickly rejected.

The reason is simple: they all found out some information and knew that DeepBlue Technology was not a simple company.

Although the company has only been established for three years, rumors circulate within the small circle that Lin Chuan has powerful connections.

Moreover, another piece of information has been revealed this year: this company also has military industry business, and the level of secrecy is extremely high.

Clearly, DeepBlue Technology is no pushover. Do you dare to use underhanded tactics?

During the same period, DeepBlue Technology's market value surged, and its stock price began a new round of upward trend.

Driven by better-than-expected positive news, the stock price hit three consecutive daily price limits in just six days, reaching a new high of 61.61 yuan, with a market capitalization of 3899.29 billion yuan.

Since its price plummeted to 34.16 yuan in late June due to the overall market downturn, it has rebounded, with a cumulative increase of +80.35%.

Lin Chuan's personal net worth soared, breaking records and allowing him to reclaim the top spot on the domestic rich list, reaching 1428 billion yuan.

With a net worth of approximately US$231 billion, he entered the top 20 of the global rich list for the first time.

Two weeks later, many peers and competitors in the photovoltaic industry finally made a decision.

Even the leading companies in the industry had to give in after thinking about it for almost half a month.

Circumstances are beyond our control; we have absolutely no say in them.

Major manufacturers have already had a tough time in the past two years, as they were subjected to anti-dumping and countervailing duty investigations by Europe and the United States two years ago.

Ultimately, it comes down to the rise of China's photovoltaic industry, which has made Europeans and Americans realize that their advantage in this field is getting weaker and weaker.

Europe was hit by a debt crisis at the time, which led to a reduction in subsidies for the local photovoltaic industry. Market demand shrank, and local photovoltaic companies generally suffered from overcapacity, severe losses, and even a large number of bankruptcies.

China's photovoltaic industry has completed rapid capacity expansion, and its global market share and competitiveness have continued to improve, putting direct competitive pressure on European and American companies.

Thanks to its cost advantage, it has captured more than 60% of the EU market and more than 15% of the North American market.

This made European and American companies, which were competing with similar products, feel threatened, so "anti-dumping and countervailing duties" came about.

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In the first three quarters of 2012, A-share listed photovoltaic companies achieved a total net profit of -7.48 million yuan, a year-on-year decline of -123.06%, and the entire industry fell into overall losses.

It's now August, the second half of the year, and the interim reports for this year have been released one after another.

In the first half of 2013, the 36 listed companies in the A-share photovoltaic sector achieved a total net profit attributable to shareholders of 512 million yuan.

Although this figure is still meager, it represents a significant reduction in losses compared to the industry-wide losses in the first half of 2012, signifying a qualitative leap and indicating that the photovoltaic industry is showing signs of recovery.

Major manufacturers also felt that the dawn had broken.

Unexpectedly, DeepBlue Technology suddenly appeared out of nowhere.

They started by throwing out an epic bombshell, it was like they were going to wipe everyone out and send them all packing.

This completely stunned all their peers, who felt as if the sky had fallen.

The country must be pleased to see DeepBlue Technology achieve such a significant technological breakthrough in the photovoltaic field.

It directly raised the technological level of China's photovoltaic industry to a world-leading level, and by a significant margin.

As long as it's a mainland company, it makes no difference to the country who possesses this leading technology.

The government is all smiles, but the established manufacturers in the industry are anything but.

Monday morning, DeepBlue Technology headquarters.

Many industry peers and business partners gathered in Xin'an today to visit DeepBlue Technology.

The chairmen or presidents of several leading photovoltaic companies attended in person, and the top-level representatives of more than a dozen other medium-sized manufacturers were also present, along with observers from several downstream state-owned power companies.

Basically, two-thirds of the players in the photovoltaic industry have come, covering the upstream, midstream and downstream of the industrial chain.

Such a significant move obviously couldn't be kept secret, and the capital market quickly learned of it.

Seeing such a large-scale surge, DeepBlue Technology's stock price, which had been fluctuating and adjusting at a high level for about two weeks after hitting a new high, directly surged to the daily limit this morning.

The stock price rose to 57.04 yuan, and the market value rebounded to 3610 billion yuan.

It is evident that the capital market has high expectations for this, and investors are betting real money on these expectations.

Around 10 o'clock in the morning.

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In a conference room at DeepBlue Technology's headquarters, more than fifty people were already seated. The long table was full on both sides, and several rows of chairs had been temporarily added against the wall.

The new headquarters is still under construction, and this meeting room isn't big enough for now, so we'll have to make do.

As Lin Chuan walked into the conference room, everyone present turned their attention to the young man.

The head seat on the conference table was empty; that was Lin Chuan's seat.

However, after he came in, he didn't sit down in that seat, but instead paced back and forth in the conference room.

Lin Chuan was the youngest among the fifty-odd people present, but he showed no signs of nervousness and remained calm and composed throughout.

Many industry leaders were secretly surprised when they first met Lin Chuan, as this young man could be so calm.

They initially thought that Lin Chuan might be at a loss when facing a group of industry leaders all by himself.

But what these bosses didn't know was that, in Lin Chuan's eyes, this scene was nothing compared to the truly grand scenes he had experienced in his previous life.

"Everyone, three weeks ago you all visited DeepBlue Technology's demonstration site." Lin Chuan's voice rang out as he paced aimlessly around the conference room, his gaze sweeping over every face present.

Mr. Li from LONGi, Mr. Gao from TRW, and Mr. Zhu from GCL all had solemn expressions.

"The fact that you are sitting here today means that you have already found your answers and made your choices."

At this moment, the CEOs all remained silent.

Mr. Li picked up his teacup and took a sip. The tea was good, but he couldn't taste it.

Mr. Gao leaned back in his chair, arms crossed, the sunlight falling on the tablecloth on the table.

Mr. Chen was looking down at his notebook, but his pen never touched the paper.

Mr. Zhu had the calmest expression, but the way his fingers tapped silently on his knees revealed his inner turmoil.

Lin Chuan continued, "Before discussing the specific cooperation model, there are a few things I'd like to say upfront. I mentioned this when I invited our competitors to visit, and I'll say it again here."

"First, DeepBlue Technology does not intend to destroy any competitors. As for the objective aspects, I cannot guarantee that; it depends on the choices of the competitors present here."

"Secondly, DeepBlue Technology is not afraid of any competition from its peers, whether domestic or foreign."

"Third, if everyone is willing to cooperate and make money together, then we can each rely on our own abilities to prove ourselves in the market."

Lin Chuan's words were confident yet somewhat intimidating.

Lacking solid technical strength is arrogance, but having real strength to back it up is power.

When the bosses heard the phrase "each to their own," the corners of their mouths twitched slightly.

Mr. Li put down his teacup, which was the first thing he did after entering the conference room today, and then looked at Lin Chuan.

"Since we're sitting here, we want to discuss cooperation. Mr. Lin, our company's stance is very clear: we are willing to cooperate with DeepBlue, but the methods and conditions of cooperation need to be discussed."

Lin Chuan looked at him and asked in return, "Oh? How does your company intend to discuss this?"

Mr. Li immediately said, "Mr. Lin proposed technology licensing, and our company will pay the patent fee. Using DeepBlue's technology to upgrade our production line is no problem, but the profit distribution should be based on market rules."

Upon hearing this, Lin Chuan pondered for a moment, then said something that surprised everyone present.

"If it were just about technology licensing, we wouldn't all be gathered here today. DeepBlue Technology could just send out a price list; those who want to sign, sign; those who don't, forget it. It's that simple."

The atmosphere in the conference room subtly shifted.

Mr. Gao frowned slightly, and Mr. Chen looked up from his notebook.

Lin Chuan picked up a stack of printed documents from the table, divided them into several parts, and passed them down the long table.

"Here is my complete plan. Take a look first, and then we'll discuss it."

The meeting room was quiet for almost ten minutes.

Everyone was flipping through that document, page by page, looking at it very carefully.

Some people made annotations in the blank spaces, some whispered a few words to the person next to them, and most people just read in silence, their brows going from relaxed to furrowed, and then from furrowed to relaxed again.

The core content of this document is only a few pages long, but every page contains extremely important information.

The document states:

DeepBlue Technology is positioned as a core technology supplier in the photovoltaic industry chain, providing some of the most critical technical components in the form of finished products.

At the same time, DeepBlue provides technology patent licensing and production standards to peer manufacturers, allowing them to use their own production lines to complete packaging and component integration, and pay DeepBlue patent fees based on shipment volume.

The profit distribution plan is more specific.

According to DeepBlue Technology's calculations, the full-scale promotion of single-linear fission technology could expand the overall profit margin of the photovoltaic industry by approximately three times.

Because efficiency doubles and costs decrease.

In this profit pie, DeepBlue Technology, as the core technology provider, takes about 35% of the overall industry profit.

The upstream raw material and equipment suppliers in the industry each receive about 30% of the overall industry profits.

The midstream manufacturing processes, including solar cells, modules, auxiliary materials, and inverters, account for about 20% of the industry's overall profits.

Downstream power plant development and operation account for about 15% of the overall profits.

Finally, there is a special clause: an industry self-regulatory convention.

This clause appeared because Lin Chuan, as a reborn individual, knew that without this constraint, his peers would inevitably continue to expand production blindly and recklessly, just like in his previous life.

Then, overcapacity quickly develops, followed by ineffective involution, constantly driving down prices and further reducing workers' wages, causing losses across the entire industry and making life difficult for everyone.

That's what happened in 2011. It was the peak of industry profits, and people in the industry were frantically expanding production. Outsiders also wanted to get a piece of the pie, and then everyone went crazy.

If this is not restrained, it will definitely happen again in the future.

In fact, this is not just the case in the photovoltaic industry; many industries are similar.

When people see that an industry can make money, they all rush in, wanting a piece of the pie. This leads to massive overcapacity, and then to a frenzied and extreme involution.

DeepBlue Technology has entered the photovoltaic industry, and Lin Chuan has the capability to do so, so naturally he wants to suppress this trend.

Thus, this industry self-regulatory convention came into being.

In summary, the agreement stipulates that all partners must not bid below cost, must not engage in irrational capacity expansion, and must not seize market share through malicious price suppression.

Those who violate the convention will have their technology licensing qualifications revoked, and DeepBlue Technology will not cooperate with those who do not sign this clause.

In other words, signing this agreement is a prerequisite for cooperation.