Tech Giants: Starting from Bankrupt Companies

64: Chapter 64: The Backbone of Industry, Xingchen Heavy IndustryAfter Spark Power’s stock price hit 1,300 yuan on June 15, it finally took a breather from the days of continuous soaring.

Over the next four trading days, the stock price fluctuated mildly within the 1,300-1,350 yuan range, and the average daily turnover rate dropped from the peak of 25% to around 8%.

Hosts on financial channels began using phrases like ’value revaluation complete’ and ’entering the performance realization period’ to describe Spark Group. A column in the Securities Daily wrote: ’When a company’s orders already cover its production capacity for the next three years, and its technological leadership has been confirmed by global giants voting with real money, what remains is to see how it converts these paper promises into tangible profits. The hype period for Spark Group is over; the true investment period has begun.’

Wednesday afternoon, June 19.

In the top-floor office of Xinghuo Headquarters, Su Chen stood before the floor-to-ceiling windows, holding a freshly printed monthly report from Xingchen Heavy Industry. Outside the window was the bustling skyline of Shenzhen, but his gaze was currently fixed on the simple numbers in the report.

Lin Wan pushed the door open and placed a cup of freshly ground coffee on the desk. ’The brokerages are asking again when the Q3 earnings conference will be held. Seventeen institutions have now given a ’Buy’ or ’Strongly Recommend’ rating.’

’No rush,’ Su Chen said without turning around, still looking at the report. ’Let them wait a bit longer. It’s a good thing the stock price has stabilized, but we should turn our attention back to the true fundamentals now.’

He turned around and handed the report to Lin Wan. ’Take a look at this.’

Lin Wan took it and flipped through it. The report was detailed, containing production data, order status, and technical progress, but she quickly noticed a few places circled in red by Su Chen—monthly production of 2 five-axis machine tools, a 45-day assembly cycle, 3 months of natural aging for castings...

’The production capacity is too small,’ Su Chen said, walking back to sit behind his desk. ’Small enough to be negligible. Do you know how many five-axis CNC machine tools the country needs in a year?’

Lin Wan quickly calculated in her head: ’Aerospace, military industry, precision molds, automotive engines... at least over a thousand units, with about three hundred being high-end. We produce two a month, twenty-four a year, accounting for less than 1% of the market share.’

’And of these twenty-four units, half must be prioritized for military and aerospace,’ Su Chen said, tapping his fingers on the desk. ’Only the remainder can go to the civilian market. Zhao Tiezhu says in the report that the companies lining up to wait for goods are already booked until next June.’

He stood up and took his coat from the rack. ’Make arrangements; we’re going to Guancheng tomorrow. Zhang Zhen can handle things at Spark Power, but now I want to see what our ’Industrial Backbone’ actually looks like.’

Phase II Industrial Park Delivery Ceremony (9:00 AM, June 20)

In the Guancheng High-Tech Development Zone, the June sun was already intense.

Above the gate of the Xingchen Heavy Industry Phase II Industrial Park, a plaque covered in red silk awaited unveiling. Inside the park, six gray-white factory buildings were arranged neatly, with photovoltaic panels on the roofs shimmering blue in the sunlight. Between the factories were wide logistics passages, and several brand-new AGV carts were undergoing final adjustments.

Zhao Tiezhu was wearing a light blue work shirt today, with the sleeves rolled up to his elbows, revealing his sturdy forearms. He waited early at the main gate, accompanied by the person in charge of park construction and several core technical staff.

At nine o’clock sharp, three black cars from Spark Group drove into the park. Su Chen got out of the middle one, with Lin Wan following behind.

’General Manager Su!’ Zhao Tiezhu strode forward to meet him, his handshake firm. ’Welcome to inspect.’

’It’s not an inspection, it’s learning,’ Su Chen smiled, looking at the brand-new park before him. ’Six months, from a barren plot of land to this—you’ve worked hard.’

The person in charge of park construction stepped forward to give a brief report: ’The total area is 60 mu, with a building area of 80,000 square meters. Factory No. 1 is the casting pre-processing workshop, No. 2 is the precision machining workshop, No. 3 is the final assembly workshop, No. 4 is the constant temperature and humidity precision assembly workshop, No. 5 is the R&D testing center, and No. 6 is the storage and logistics center. The total investment is 3 billion yuan, which is 4% under budget.’

Su Chen nodded, walked to the plaque, and took the golden scissors handed to him by the ceremonial staff. The red silk fell, revealing the nine gilded characters: ’Xingchen Heavy Industry Phase II Industrial Park.’

He had not prepared a speech. Facing the nearly one hundred engineers and workers gathered below, he began: ’A year ago, Xingchen Heavy Industry was just an idea within Spark Group—we wanted to make China’s own high-end CNC machine tools. At that time, many people said that the machine tool industry required high investment, had long cycles, and thin profits; it wasn’t as profitable as consumer electronics.’

The audience was very quiet, with only the sound of the wind blowing through the flags.

’Standing here today, I want to say that some things cannot be measured by ’profitability’ alone,’ Su Chen’s voice was steady and powerful. ’A five-axis CNC machine tool can process aircraft engine blades, rocket fuel nozzles, nuclear power plant main pump impellers... these are the teeth and claws of a nation’s industrial capability. We didn’t have them before and could only buy them from abroad at ten times the price, while also accepting various restrictions such as usage monitoring and prohibitions on processing military parts.’

He paused, his gaze sweeping across every face: ’Now, we have them. Although we can only build two a month, and although there are still many technical bottlenecks to break through, these two machine tools, from drawings to parts, from parts to the finished machine, were 100% born on Chinese soil. They are not imported assemblies, not imitation improvements; they are true independent creations.’

’So, the park we are unveiling today does not produce ordinary machines,’ Su Chen’s voice rose slightly. ’What is produced here is the ladder for Chinese industry to ascend. It is the cornerstone upon which the precision and height of all future ’Made in China’ will depend. Thank you for your efforts. This road is long, but we are already walking in the most correct direction.’

Applause broke out, not enthusiastic but long-lasting. The engineers and workers here were more accustomed to speaking with data and precision, but Su Chen’s words touched their hearts.

After the unveiling ceremony, Zhao Tiezhu led Su Chen and his party into the park.

The first stop was the casting pre-processing workshop. As soon as they entered, a smell mixed with metal and coolant hit them. The workshop was extremely spacious, over fifteen meters high, with overhead cranes moving slowly above. On the floor, dozens of huge machine tool bed castings were arranged neatly; the smallest was three meters long and two meters wide, and the largest looked like a small room.

’General Manager Su, this is one of our biggest bottlenecks,’ Zhao Tiezhu stopped in front of a gantry milling machine bed casting, squatted down, and patted the gray-black cast iron surface. ’Machine tool precision is 30% design and 70% foundation parts. And the stability of the foundation parts is key to stress relief.’

He beckoned to a young engineer wearing glasses: ’Dr. Li, please explain it in detail to General Manager Su.’

Dr. Li was in his early thirties, a graduate with a Ph.D. in Materials Science from Tsinghua University, and had worked at the Fraunhofer Institute in Germany for three years. He held a tablet and pulled up a 3D model: ’General Manager Su, please look. This is the finite element analysis of the machine tool bed. When the machine is operating, the spindle rotates at high speed, and the tool cuts the workpiece, generating huge dynamic loads. If there is residual stress inside the casting, the stress will slowly release during long-term use, causing micro-deformation of the bed—it might only be a few microns, but for a machine tool, this is a precision disaster.’

He operated the tablet, and the model showed a heat map of stress distribution: ’During the casting process, as metal goes from liquid to solid, different parts cool at different speeds, creating internal stress. The most reliable method to eliminate stress is time—natural aging.’

He pointed to the depths of the workshop, where the temperature was noticeably lower: ’We place the castings in a constant-temperature workshop, with the temperature controlled at 20°C ± 1 degree, allowing the stress to be released slowly through tiny cycles of thermal expansion and contraction. It usually takes 3 months, and for high-precision requirements, it takes more than 6 months.’

Su Chen frowned: ’Too long. No way to speed it up?’

’Yes, artificial aging,’ Dr. Li brought up another set of data. ’Heat the casting to 500-550 degrees Celsius, keep it at that temperature for a few hours, and then cool it slowly. It can shorten the time to within a month. But the problem is, uneven heating introduces new stress, and for large, complex castings, the uniformity of the furnace temperature field is hard to guarantee.’

He walked over to a casting undergoing vibration aging treatment: ’This is vibration aging, using vibration at specific frequencies to accelerate stress release, which only takes a few days. But for the core components of high-end five-axis machine tools with extremely high requirements, the reliability of vibration aging is still controversial. High-end machine tool factories in Germany and Japan still insist on 6-12 months of natural aging.’

Zhao Tiezhu added: ’This is why our monthly production capacity is only two units. It’s not that we can’t build them; it’s that we can’t wait. For a five-axis machine tool, just the big castings like the bed, column, and table need to be prepared half a year in advance. And the scrap rate is high—last year we cast twenty beds, and after testing them following three months of natural aging, six had excessive stress and had to be remelted.’

Su Chen silently looked at those castings ’sleeping’ quietly. In the consumer electronics field, a product’s life cycle might only be one year; in the new energy vehicle field, technical iteration is counted in quarters. But here, time is measured in months and years. A part cast today won’t be assembled until next year; a machine tool that starts assembly today won’t be delivered for 45 days.

This is a completely different industrial logic.

Leaving the casting workshop, the group entered Factory No. 4—the constant temperature and humidity precision assembly workshop.

This was a completely different world. The temperature was 22°C, the humidity was 45%, and the air was filtered through three stages. All personnel had to change into anti-static clothing and pass through an air shower before entering. The floor was light gray epoxy self-leveling, smooth and mirror-like.

In the workshop, four five-axis machine tools were being assembled simultaneously. Scaffolding was set up around each machine, and engineers were busy at various parts.

Zhao Tiezhu led Su Chen to the machine tool in the back. This machine was nearing completion and was undergoing final precision adjustment. An Old Master Craftsman in his fifties with graying hair was leaning over the workbench, holding a dial indicator, his eyes fixed on the dial.

’Master Wang, General Manager Su has come to see you,’ Zhao Tiezhu said softly.

Master Wang did not look up immediately, but finished the current measurement and wrote down a number in his notebook before straightening up. He was not tall, but his arms were thick, his finger joints protruding—the hands of a typical grade-eight fitter.

’General Manager Su,’ Master Wang said in a raspy voice with a thick Northeastern accent. ’This one is for the Third Academy of Aerospace Science and Industry, used for processing rocket engine nozzles.’

Su Chen looked at the machine tool. It wasn’t as square as an ordinary machine tool, but had a complex multi-axis structure and a huge workbench. The main body of the machine was dark gray, and key components like the spindle head and rotary table shone with the cold light of metal.

’What are the precision requirements?’ Su Chen asked.

’Positioning accuracy of 0.002 millimeters, repeat positioning accuracy of 0.001 millimeters,’ Master Wang said, stating a figure difficult for an ordinary person to comprehend. ’Equivalent to one-seventieth of the diameter of a human hair.’

He pointed to a standard gauge fixed on the workbench: ’We are currently checking the ’roundness’ and ’cylindricity’. The spindle rotates with a probe, drawing a theoretically perfect circle on the workbench; the deviation between the actual trajectory and the theoretical trajectory is the geometric accuracy of the machine tool.’

Master Wang turned on the machine’s control computer and opened the measurement software. On the screen, a green circle was forming, but the edge of the circle was not smooth; it had tiny fluctuations.

’Look here,’ Master Wang zoomed in on an area. ’This 0.8-micron bump is a tiny error in the X-axis guide rail at a certain position. We have to ’smooth out’ this bump by adjusting the preload of the guide rail and modifying the error compensation table of the CNC system.’

He picked up a special adjustment wrench and turned to the young assistant beside him: ’Xiao Liu, open the X-axis cover. I need to adjust the pressure block of the third section of the guide rail.’

For the next ten minutes, Su Chen watched Master Wang work quietly. The old man lay by the machine tool’s guide rail, using the wrench to slightly adjust the bolts, stopping every quarter-turn to let his assistant measure with a laser interferometer. His movements were extremely slow, and he even deliberately lightened his breathing, as if afraid of disturbing something.

After adjusting one spot, Master Wang’s forehead was already sweating. He straightened up and wiped his hands: ’General Manager Su, you can’t rush this work. This machine tool has 127 such adjustment points, and each point needs to be adjusted three to five times. Sometimes after adjusting one point, others change, and you have to rework it. Assembly and debugging of one machine tool takes 45 days at the fastest.’

’Can’t it be faster?’ Lin Wan couldn’t help but ask.

Master Wang looked at her and smiled: ’General Manager Lin, this isn’t assembling a computer where you just tighten the screws. This is a machine with micron-level precision. When I was an apprentice, my master said that the feel for adjusting a machine tool must be as delicate as embroidery and as patient as making tofu.’

He patted the machine tool column: ’This machine will work continuously for ten or twenty years, 24 hours a day. Spending an extra day to adjust it well now means one less day of downtime for the user in the future. The machines that go out from our Xingchen Heavy Industry cannot ruin our reputation.’

Su Chen nodded deeply. He understood this spirit of craftsmanship, but he was also clear about the cruelty of the business world—market demand wouldn’t wait 45 days for you.