139: Chapter 139 The Light of Dawn: The Cataclysm of the World

Samsung Headquarters, Seoul, same day at 22:00 (Seoul Time)

Lee Jae-yong, Vice Chairman of Samsung Electronics, stood before the floor-to-ceiling windows of the conference room, looking out at the night view of Seoul. His phone screen was playing highlights from the Huaxing launch event—specifically the segment where Mobile Phone Product Manager demonstrated the 'lingxi pen'.

"Mid-air operation... ultrasonic positioning..." Lee Jae-yong murmured to himself. "How did they solve the drift problem?"

"Vice Chairman, the emergency board meeting starts in five minutes," the secretary reminded him.

Lee Jae-yong turned around. Twelve people were already seated in the conference room—the top decision-makers of Samsung Electronics. Every face was as grim as iron.

"Have you all finished watching?" Lee Jae-yong asked.

Everyone nodded.

"Then, the reality we face is this: the Chinese have not only caught up, they have already surpassed us in certain fields." Lee Jae-yong walked to the head of the table but did not sit down. "The screen: peak brightness—our latest product is 1300 nits. The processor: we've fallen behind in architectural design. The battery: 4500mAh while still ensuring safety—our Note 7 disaster is still being mocked."

He paused, scanning the room. "Most importantly, the price—6999 yuan, roughly 1000 USD. If Samsung were to make the same configuration, the cost alone would exceed that amount. How did they do it?"

"Supply chain independence," the President of Technology answered. "According to our intelligence, Huaxing's screens, storage, batteries, and even some chips all come from Spark Industry—a company within the same system. No middlemen, no patent fees, and no layers of profit margins piled on top."

"In other words, they are building a closed loop," Lee Jae-yong realized. "From materials to components to the finished machine, they control it all. This isn't just a company; it's an ecosystem."

"And this ecosystem is expanding outward." The Strategy Director pulled up a map. "Next month: Kuala Lumpur, Riyadh, Moscow. These are all traditional Samsung stronghold markets, but Huaxing's prices are half of ours while their specs are higher."

The conference room fell into silence.

Samsung's dilemma lay here: the high-end market was suppressed by Apple, and the mid-to-low-end market was being eaten away by Chinese brands. Now, Huaxing was using high-end technology at a mid-range price, directly piercing Samsung's core heartland.

"We must change our strategy." Lee Jae-yong finally sat down. "Following behind America and using American technology will always leave us in second place. And now, America might not even want to leave us that second spot."

He pulled up a document. "This is the assessment from the technical department: over the next three years, if the xinghuo system maintains its current pace of innovation, Samsung will lose 30% of its global market share in consumer electronics. Worst-case scenario: 50%."

The numbers struck everyone's hearts like a heavy hammer.

"Therefore, I propose launching 'Project Phoenix'," Lee Jae-yong said. "Invest 15 billion USD to develop FD-SOI full-industry chain technology. We need to establish a 'non-American equipment process line'—from design software to lithography machines, to escape American control as much as possible."

"15 billion? That requires board approval..."

"I will handle the board," Lee Jae-yong interrupted. "More importantly, we need allies. The Japanese, the Europeans, and even... the Chinese."

"The Chinese? They are our competitors!"

"They are also partners," Lee Jae-yong corrected. "Xinghuo has material advantages, and Samsung has manufacturing experience. If we cooperate, we can jointly oppose American technological hegemony. If we don't, we will be picked off one by one."

He stood up. "Gentlemen, the world is splitting. On one side is the traditional system dominated by America; on the other is the rising power of China. We must choose a side, or... create a third side."

"A third side?"

"An Asian Technology Alliance," Lee Jae-yong stated, voicing the idea he had been brewing for a long time. "Samsung, TSMC, Xinghuo, plus Japanese material and equipment companies. If we can integrate—from design to manufacturing to materials—Asia can become its own self-contained system."

The idea was so bold it made everyone in the conference room gasp.

"America won't allow it," someone objected.

"Which is why we must be fast," Lee Jae-yong said. "Before Huaxing's momentum turns into a tsunami, and before Washington can react. Tomorrow morning, I will fly to Taipei to meet with TSMC's Morris Chang. Meanwhile, the technical team will begin contact with Xinghuo—not as competitors, but as potential partners."

"What if they refuse?"

"Then we compete." Lee Jae-yong's gaze sharpened. "But at least we tried. And even if cooperation fails, the contact itself will make Washington nervous—which will give us more bargaining chips."

The meeting ended late into the night. Lee Jae-yong returned to his office and looked at the world map on the wall. He drew a circle around China's location, then drew a line connecting it to Seoul, then to Taipei, and finally to Tokyo.

An Asian technological triangle was forming.

He didn't know if this triangle could withstand the pressure from Washington, but he knew that if they didn't try, Samsung's future would be nothing but darkness.

Infineon Headquarters, Munich, same day at 16:00 (Berlin Time)

Reinhard Ploss, CEO of Infineon, looked at the report in his hand, his brow furrowed.

"The power management chip for the Huaxing HX1... it's not from Qualcomm, not from Texas Instruments, it's self-developed by Xinghuo." He looked up at the CTO. "The parameters are 20% higher than our latest product."

"Yes. And according to the teardown report, their fast-charging solution—55W, full charge in 30 minutes—uses a completely new topology. Efficiency is at 95%, and temperature control is extremely precise." The CTO handed over a more detailed analysis. "We suspect they received support from the Chinese military in power technology."

"The military..." Ploss chewed on the word. "So this isn't just commercial competition."

"It never was." Jean-Pierre Dupont, CEO of the French company STMicroelectronics, sitting at the other end of the conference table, spoke up. "The Americans use national security as an excuse to suppress Huawei; now the Chinese are using the same logic to build an independent system. We Europeans are caught in the middle, squeezed by both sides."

Present in the room were the heavyweights of the European semiconductor industry: representatives from Infineon, STMicroelectronics, NXP, and ASML.

"Can ASML sell EUV lithography machines to China?" Ploss asked.

The ASML representative shook his head. "The American government has explicitly warned that if we sell, ASML will lose all American technology and component supplies. We cannot afford that."

"So the Chinese can only develop it themselves," Dupont said. "And according to intelligence, they already have a prototype for a 28nm DUV lithography machine. Though it's outdated, it works. If we give them another five years..."

Five years later, China might no longer need European semiconductor equipment.

This prospect sent a chill down everyone's spine.

"We must act." Ploss stood up. "Not to oppose China, but to protect Europe. I propose the establishment of the 'European Semiconductor Autonomy Alliance' (ESAA). Joint investment, joint research, and the creation of a completely independent semiconductor industry chain—from design software to raw materials, manufacturing equipment, and packaging and testing."

"The scale of investment?"

"10 billion euros for the first phase," Ploss said. "The governments of Germany, France, the Netherlands, and Belgium have already expressed support. What we need is commitment from the corporations."

"Where will the money come from?"

"EU innovation funds, member state government subsidies, and corporate self-funding." Ploss was well-prepared. "More importantly, we can issue 'European Technology Bonds' to raise funds from the public—tell them this is about defending Europe's technological sovereignty."

This concept struck a chord with everyone present.

Technological sovereignty—no one had mentioned this term during the height of globalization over the past twenty years. Everyone believed in comparative advantage and the division of labor. But the Xinghuo incident, the rise of Huaxing, and the American technological blockade made Europeans realize: without sovereignty, there is no security.

"The first batch of projects for the alliance?" Dupont asked.

"Three," Ploss pulled up a planning diagram. "First, establish a 28nm FD-SOI production line in Dresden, focusing on automotive and industrial chips—our areas of strength."

"Second, establish a third-generation semiconductor R&D center in Grenoble, focusing on silicon carbide and gallium nitride—the core materials for the electric vehicle era."

"Third, jointly develop next-generation EUV lithography technology—not to chase ASML, but to explore new technical routes, such as nanoimprint lithography or electron beam direct writing."

The plan was ambitious, but also carried immense risk. 10 billion euros could go down the drain, the technical routes could be wrong, and American pressure could split the alliance.

But if they did nothing, the European semiconductor industry would slowly wither away under the pincer movement of China and America.

"I agree," Dupont was the first to raise his hand.

"What about NXP?" Ploss looked at the Qualcomm representative.

The representative gave a bitter smile. "I cannot decide. But I will report today's meeting in full to the San Diego headquarters. Personally, though... I don't think Qualcomm will object. Having another option is insurance for Qualcomm as well."

One by one, the corporate representatives raised their hands in agreement.

The European Semiconductor Autonomy Alliance was born that night.

The Butterfly Effect: Tremors in the Global Market

As the Berlin meeting concluded at 20:00 Munich time, Wall Street in New York had just opened.

Apple's stock price opened 2% lower. In analyst reports, the term 'Huaxing HX1' appeared 47 times.

"A Chinese flagship phone has, for the first time, matched or exceeded the iPhone in overall experience while being 30% cheaper," wrote a report from Morgan Stanley. "We expect the iPhone's market share in the Asia-Pacific region to drop by 3-5 percentage points, with a revenue impact of approximately 5 billion USD."

Qualcomm's stock price fell even harder: 4%. This was because analysts discovered that the HX1 used self-developed power management chips, self-developed RF chips, self-developed audio chips... out of Qualcomm's entire suite of solutions, Huaxing only used the baseband chip.

"If they even develop their own baseband, Qualcomm will lose its fastest-growing customer," a Goldman Sachs analyst said during a conference call. "What's more terrifying is that Huaxing's technology will spread to other Chinese brands. Once Chinese phone companies collectively 'de-Qualcommize', Qualcomm's revenue will be cut in half."

Broadcom, Texas Instruments, Qorvo... the stock prices of all American semiconductor companies were falling.

But the hardest hit were a group of Silicon Valley startups—small companies that provided 'innovative features' for phones. The demonstration of Huaxing's 'lingxi pen' caused the stock of a Silicon Valley company making styluses to crash by 60%. The market realized that if Huaxing could achieve mid-air operation using ultrasound, then traditional active capacitive pens were obsolete.

In Tokyo, Sony's headquarters remained brightly lit throughout the night.

The Sensor Division was holding an emergency meeting. Although Huaxing's 'Light and Shadow 2.0' camera module still used Sony sensors, the lenses, motors, and algorithms were all self-developed. More critically, that variable aperture structure—Sony had used it on DSLR cameras for twenty years but had never thought of porting it to a phone.

"We were limited by our own thinking," the head of the division said with chagrin. "The Chinese have no historical baggage; they dare to try any possibility."

"But the good news is, they still need our sensors," someone offered as consolation.

"They need them now, but what about next year? Or the year after?" the head shot back. "Spark Materials is already developing a new type of image sensor using perovskite materials, with a quantum efficiency twice as high as silicon. Once mass-produced, Sony's monopoly in the mobile sensor market will end."

The conference room fell into a dead silence.

"We must accelerate our pace of innovation," the head finally said. "Not by 10% each year, but doubling every year. The Chinese are running; we must fly."

That night, from Seoul to Munich, from New York to Tokyo, executives in the global tech industry were all doing the same thing: re-evaluating China's technical strength, readjusting corporate strategies, and rethinking the competitive landscape for the next decade.

And the starting point for all of this was that 90-minute launch event at the Spring Cocoon Stadium in Shenzhen.

It was Mobile Phone Product Manager holding up the phone and saying: "Redefining the meaning of 'Smart'."

It was those sleepless nights in the Spark Materials laboratory.

It was the grand blueprint Su Chen had drawn three years ago.

Beijing Time, December 17th, 4:30 AM.

Shenzhen, the rooftop observation deck of the Xingchen Academy of Sciences.

Silent Chen stood there, watching the eastern sky turn pale. After a night of fierce battle, the cyberattacks had been repelled, but the cost was heavy. An 80 million loss wasn't fatal for Xingchen, but the signal sent was clear: the opponent had upgraded their methods of confrontation.

Footsteps came from behind. Li Rui came up as well, holding two cans of coffee.

"Director Chen, not resting yet?"

"Just thinking," Silent Chen took the coffee. "Li Rui, what method do you think they'll use for the next attack?"

"More hidden, more persistent, more lethal," Li Rui leaned against the railing. "'Bone Corroder' failed; next time it might be 'Venom' or 'Ghost'. Or... not a cyberattack, but physical sabotage."

"Like what?"

"Supply chain poisoning. Bribing key personnel. Even... kidnapping." Li Rui spoke calmly, but every word carried immense weight. "Director Chen, this isn't commercial competition anymore; this is war."

Silent Chen fell silent. He knew this, of course. From the day he agreed to join Xingchen, Su Chen had told him clearly: "What we are doing will touch too many interests. You will become a target."

He had replied then: "Then let them come."

Now, they had truly come.

"Does President Su have any instructions?" Li Rui asked.

"Just one sentence: Know the white, keep the black," Silent Chen repeated. "Know where the light is, but choose to guard the darkness. It means... we must prepare for a long-drawn-out war. Let Mobile Phone Product Manager and the others show the bright side; we will guard the dark side."

In the east, the first ray of sunlight pierced the clouds, gilding the skyscrapers of Shenzhen in gold.

A new day had begun.

But for Xingchen, every day was a battlefield.

Silent Chen finished the last sip of coffee, crushed the can, and tossed it accurately into a trash bin five meters away.

"Let's go. 'Xuanwu 2.0' needs perfecting, the attack analysis report needs to be written, and we have to prepare for next week's national cybersecurity exercise." He turned around. "We still have much to do."

Li Rui followed: "Director Chen, do you think we will win?"

Silent Chen stopped and looked back at him.

"It's not a question of whether we will win," he said. "We must win. Because if we lose, the path for the rise of China's high-tech industry will be set back by ten years or even longer. We cannot afford to lose."

The two walked down from the observation deck, returning to the still brightly lit cybersecurity command center.

A new day, a new battle, had already begun.

On the other side of the city, a line five hundred meters long had already formed in front of the Huaxing flagship store. People wrapped in down jackets waited in the cold winter morning wind just to be the first to get their hands on that phone that redefined 'Smart'.

Sunlight spilled over their faces, over the skyscrapers of Shenzhen, and over this nation undergoing a massive technological transformation.

The light of dawn had arrived.

But the darkness before dawn is also the deepest.

The road Xingchen has to travel is still very long.