Return to 1958 and build a century-old giant

Chapter 813 Recruiting Top Talents of the Future

After discussing matters concerning the Famicom, Wang Zhiqun continued, "Mr. Yang, our Walkman portable music player has become very popular in many countries around the world. Orders from the United States and Japan have already kept our factory busy with production."

"Haha, it's truly a series of good news!" Yang Wendong chuckled and asked, "How much have you sold during this period?"

In Hong Kong and many places with Chinese culture, Walkman is called a portable music player.
This is also the essence of Chinese characters; you can roughly guess what it is just by hearing the name. But with the English word "walkman," if you don't know what it means, you might think it's a "man who can walk."
Wang Zhiqun replied: "In the early days, the sales of Walkman were not very good. In the first three months in Japan, only a few thousand units were sold. However, as early users used it frequently, its popularity increased, and subsequent purchases continued to increase. Just last month, the sales of Walkman in Japan reached 8000 units."

In addition, we entered the US market during the Christmas season, but we did not expect that the Walkman, which took a long time to become popular in Japan, would become a hit in the US in just a few weeks. The demand was several times higher than the peak demand in Japan, and the increase was getting bigger and bigger. This seriously affected our production plan.
The Walkman factory in North Point is currently building two new factories, but after doing the math, I'm afraid it still won't be able to meet the demand, not to mention that we also have markets in Europe, America, Southeast Asia, and South America.

"It's a great thing that it suddenly became a hit in the United States." Yang Wendong nodded, noting that historically, this had also been the case.

Sony's Walkman launch in Japan was lukewarm at first, achieving its goals but remaining just an ordinary product. However, it unexpectedly became a hit in the United States. This is likely due to the stronger music culture and travel culture in the US compared to Japan, resulting in a high demand for portable music players.

Wang Zhiqun said, "Yes, so we are under great pressure in production here, and we simply can't keep up."

"So what are your thoughts?" Yang Wendong countered.

Wang Zhiqun said, "The structure of a Walkman is very similar to that of a radio, so my idea is to integrate the many existing radio manufacturing companies in Hong Kong, select suitable manufacturers, and let them manufacture for us."

After listening, Yang Wendong said, "We can try it. I don't object to outsourcing, but the quality must be guaranteed."

Our products are currently experiencing a surge in demand, with orders growing exponentially. This makes us highly susceptible to quality issues. If batch problems occur, the more orders we have, the greater our losses will be.

OEM manufacturing in the electronics industry is a business development trend because electronic products are different from other commodities. Their characteristic is that once a good product is developed, it is easy to experience exponential growth in demand.
When faced with such a large increase in orders, many companies are overwhelmed, let alone production; they are already doing well just to handle sales and after-sales service.

As a result, contract manufacturing naturally emerged, outsourcing complex production to specialized companies. These companies do not engage in end-user sales but only undertake orders from various companies, positioning themselves in "production" and specializing their "production" capabilities.

This is unlikely to happen in traditional industries. For example, in Changxing Industrial's paper manufacturing, there is no way that there will be an exponential increase in demand, and it is entirely possible to produce it in-house.

With the electronics industry poised for explosive growth, Yang Wendong needs to focus his energy on technology, quality, market, and after-sales service. Production, which has the lowest profit margin, also needs to be gradually outsourced.
The purpose of investing in Foxconn is to obtain a portion of the profits from outsourced production, while also maintaining influence over the company and retaining the deterrent power to control a large number of jobs.

Wang Zhiqun agreed, saying, "Okay, I understand. I will choose a suitable factory in Hong Kong."

Yang Wendong continued, “It’s not just Hong Kong, Taiwan is fine too. Didn’t I invest in a few Taiwanese OEM factories before?”
These people are all capable. You can arrange for them to try it out themselves. If they are capable, then arrange for Hang Seng Bank to lend them money so that they can develop their businesses.
Since the work has already been outsourced, our top priority should still be the projects we ourselves have invested in. This way, we can maximize our profits.

In fact, it wasn't just Foxconn; he also chose to invest in several other companies in Taiwan, all of which were OEM manufacturers. Of course, he didn't negotiate with Fang Xianming; instead, he sent a few people from headquarters to these small companies, and sending mid-level managers was enough.
These selected companies were all former OEM manufacturers for Honor Electronics, and they performed quite well. Perhaps due to their own emergence, through the butterfly effect, these companies may also become OEM giants in the future. Even if they cannot compare with Foxconn, a certain scale is enough.
“Okay, I understand, Mr. Yang.” Wang Zhiqun paused, then asked, “Mr. Yang, there’s something I don’t quite understand, and I’d like to ask you about it.”

“Go ahead,” Yang Wendong said.

Wang Zhiqun said, "Judging from the investments you've arranged, it seems you have a better view of Taiwanese electronics manufacturing companies than Hong Kong's. But now, most of our Honor's manufacturing companies are in Hong Kong. Why don't you fully support Hong Kong's manufacturing companies?"

Honor does indeed have a large number of suppliers in Hong Kong, given their proximity, and some of Honor's contract manufacturers have even gone public.
However, Honor itself has not invested in these contract manufacturers except for a few; the relationship between the two parties is purely cooperative. On the contrary, Chang Hsing Financial Company in Taiwan has made multiple moves to invest in many small and medium-sized electronic contract manufacturers. Once invested, Honor Electronics will try to shift its orders to these companies, and once the quality is guaranteed, the support will be much greater.
In other words, Honor Electronics has actually been gradually shifting its industrial orders to Taiwan in recent years. However, due to Honor Electronics' rapid development, even though the proportion in Hong Kong is decreasing, the overall trend is still upward.

Yang Wendong smiled and said, "I once thought about supporting Hong Kong's contract manufacturing industry, but after investigation, I found that most of the contract factory owners no longer have their minds on manufacturing, but instead are speculating in real estate or stocks. Judging from the trend, manufacturing will become their side business."
Conversely, the real estate market in Taiwan hasn't yet shown signs of a major boom, and the factories there are still focused on building their businesses—a point that Fang Xianming was also considering.

Actually, this is a normal phenomenon. Working hard in a factory for a year doesn't earn much money, and there are often many quality problems, complaints, management issues, etc., which are extremely annoying. It's not as simple as investing in real estate or stocks. As long as you put the money in, you can just wait for it to appreciate.

This is inevitable for the development of any economy, because when industry develops, the more capital enters, the less money everyone makes. But the real estate and stock markets are the opposite; the more capital enters, the more money everyone can make.
Not to mention Hong Kong, even the US and Europe will gradually deindustrialize and financialize in the coming decades.
Of course, Taiwan will be similar in the future, but relatively speaking, it will be much better than Hong Kong, and it will be at least ten years from now.

"I see. The current situation in Hong Kong has indeed led many factory owners to invest in finance and real estate," Wang Zhiqun nodded and said.
Even he was like that. As a senior executive of Changxing Group for many years, he had a considerable income. His huge annual salary and bonuses were not put into the bank to earn interest, but were all invested in real estate and the stock market.
Of course, even a top-tier employee can distinguish which is more important; but some small business owners, who work hard to earn millions a year by running factories, can easily make tens of millions by speculating in real estate and stocks, so they naturally know how to choose.

Yang Wendong added, "It's not that I don't want to give the Hong Kong market a chance. Speculating in real estate and stocks is human nature, and I can't control that. As long as you continue to focus on your own factory, I will support you. But it's hard to tell the difference."

There's really no need to go through all this trouble. In Hong Kong's past, after the 90s, its manufacturing industry was almost completely wiped out. Only a few companies that moved to the mainland survived, but they had nothing to do with Hong Kong anymore.

On the contrary, Taiwan's electronics manufacturing industry has developed to its extreme, with companies like Foxconn, ASUS, and Pegatron, and even chip foundries like TSMC.

Yang Wendong doesn't need to overanalyze why; he just needs to know the result. That's why he's now focusing on supporting and investing in Taiwan's numerous electronics manufacturing industries, hoping to get a share of the pie in the future.

After all, aside from games, he doesn't have any absolute certainty of achieving 100% global success with other hardware devices. Therefore, he seeks to profit from the electronics market indirectly. For example, he might sell through Best Buy, manufacture through contract manufacturers, and invest in computer companies in between. This way, he can at least obtain a high return on his investment.

Of course, he will also do his best to maintain his own glory, as the success of his own business is more meaningful and influential.

Wang Zhiqun thought for a moment and said, "Mr. Yang, I know an electronics company. Although their boss also likes to invest in real estate and finance, the professional manager he is looking for is very enthusiastic about developing the company. I have communicated with him before, and he is quite talented. Perhaps you can consider this company."

"Oh, which company?" Yang Wendong asked curiously;

Wang Zhiqun replied: "This company is called Wang's Electronics. The founder's surname is Wang, so they just used this name. They mainly produce various diodes, resistors, capacitors, PCB boards and other components."
The professional manager I'm referring to is He Guoyuan. In just a few years at Wang's Electronics, he expanded the company more than tenfold, and the quality of their products is excellent. They are one of my Rongyao Electronics' inspection-free partners.

"He Guoyuan?" Yang Wendong's heart skipped a beat; he recognized this man.
In the past, the wave of technology and the Internet also gave rise to many very famous Chinese entrepreneurs, such as An Wang of Wang Laboratories, Zhang Zhongmou of TSMC, Huang Renxun of Nvidia, and Yang Zhiyuan of Yahoo.

These individuals are quite well-known on the mainland internet, but there is another group of Chinese entrepreneurs who are relatively less well-known, and Ho Kwok-yuen is one of them.

He Guoyuan immigrated to Canada in the mid-80s. Because of his Chinese identity, he was unable to get a job at a large local electronics technology company. So, he had no choice but to co-found ATI with two friends, which became the world's largest graphics card company.

However, his health deteriorated in the early 2000s, and no one in the Ho family was able to take over ATI. So he sold ATI to AMD for $54 billion. In this respect, he was better than Wang An, who knew that his son was not capable but still forced a family succession system, which ruined his own company.
Seeing that Yang Wendong looked a little strange, Wang Zhiqun asked, "Mr. Yang, do you know this person?"

"I think I've heard of him. How about this, you investigate his background and show it to me." Yang Wendong thought for a moment and said, "It's rare for you to speak so highly of someone. Then why don't we poach him and have him work for our company?"

How could Yang Wendong let go of a talent capable of creating a company like ATI, especially since this person currently has no plans to start his own business and only wants to work for someone else? Naturally, he can poach him.
He Guoyuan's expertise lies in hardware quality management, an area where Honor Electronics is not particularly strong. If He Guoyuan can stabilize this area, it will be of strategic significance to Honor Electronics.

After all, no matter how good Yang Wendong's ideas are, if the game he develops has hardware problems, the more he sells, the greater the losses will be. This is something Yang Wendong is always worried about, and it can be said that he is always walking on thin ice.
Furthermore, Wang Zhiqun is not young anymore. If he recruits He Guoyuan and trains him for ten years, he could become the next generation's successor.
Of course, this cannot be said aloud; it can only be thought about in one's mind. Moreover, whether He Guoyuan has the ability still needs further testing. It is impossible to blindly believe based solely on a person's original achievements. It can only be said that there is a high probability that there will be no problem.

"It seems a bit inappropriate for someone to poach suppliers, doesn't it?" Wang Zhiqun asked, somewhat puzzled.

Yang Wendong thought for a moment and said: "That makes sense. How about this, since the boss of Wang's Electronics is keen on real estate and stock speculation, let's arrange for someone to negotiate with him to acquire the entire Wang's Electronics and merge it into Glory."

Whether it's money, property, or stock in another company, it's all negotiable.

Compared to the strategic talent that Honor Electronics needs for the future, some high-quality properties can also be exchanged. After all, there are only a handful of such talents in the world. However, there are still many high-quality land plots under Cheung Kong Property Holdings, Wharf Holdings, and Hutchison Whampoa, even in Central.

Given the price of Wang's Electronics, it's unlikely they would need an entire building in exchange; at most, a few floors of office space in a prime location or a small property would suffice.

"Okay, I'll go and discuss it with Zheng Sheng right away." Wang Zhiqun also felt that the boss seemed to be paying too much attention to He Guoyuan, but the boss's orders still needed to be carried out.

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(End of this chapter)