Those Years When I Was Forced to Top the Forbes List

Chapter 244 Huaqiangbei's Life-Saving Measures
"Although the shareholders' meeting has approved this matter... let's still have our board of directors cast a vote."

After thinking it over and over, Wu Ping exchanged a glance with Chen Datong and said.

The company's development direction and nature were about to change, so he had to be cautious.

After thinking for a moment, Chen Datong nodded.

"Okay, everyone, please share your thoughts."

For a long time, we looked at each other, but no one raised their hand.

Chen Xuebing smiled easily, tapping his fingers lightly on the table.

Ta-ta-ta-ta.

Ta-ta-ta-ta.

Chen Xuebing had come from afar, and everything had been agreed upon beforehand. To avoid an awkward situation, Chen Datong could only slowly raise his hand and say, "I agree."

Only then did two people raise their hands.

The board of directors consists of 9 members, with a 6-3 majority.

Wu Ping coughed lightly, preparing to speak.

Chen Xuebing suddenly spoke up leisurely: "I have already arranged a plan to compete with MediaTek for the market. This year, I can help you capture more than 30% of the Huaqiangbei market."

Everyone paused for a moment.

Chen Datong couldn't believe it: "Really? Mr. Chen, you should be careful what you say at this time."

Chen Xuebing grinned, but didn't say anything more.

The situation reversed instantly.

Operations Vice President Fan Renyong and Marketing Director Xu Fei raised their hands.

Sales Vice President Zhou Chengyun hesitated for a moment, then raised his hand as well.

With a score of 6 to 3, Chen Xuebing's investment has been approved.

If Wu Ping does not exercise his veto power as chairman.

In fact, this resolution is not a formal resolution. The formal resolution was made at the previous shareholders' meeting, and there is no such thing as a veto.

Wu Ping's silence was tacit consent.

However, he still wanted to remain silent and express his doubts.

Chen Xuebing's fingers continued to move.

Ta-ta-ta-ta.

His eyes were fixed on Wu Ping.

Wu Ping breathed a sigh of relief, understanding Chen Xuebing's meaning, and raised his hand as well.

The company is in a somewhat awkward situation. The two shareholders who agreed to withdraw are waiting for the money to buy back their shares. If Chen Xuebing leaves, a large portion of the company's working capital will be drained, and they will have to find new investors. Even if they do find new investors, it will not help the company in any way.

As soon as he raised his hand, another vice president of communications, Ji Jin, also raised his hand.

Only one independent director remains: Chen Bo.

It passed by a large margin of 8 to 1.

Wu Ping slowly said, "Alright, I think the company should remain conservative."

"No rush." ​​Chen Xuebing raised his hand and said casually, "I have a habit in my company that when it comes to important decisions, everyone has to agree. Otherwise, when we do things, big or small, there will always be one or two people who want to hold meetings to discuss and express their opposition. I can't stand that."

Wu Ping's lips twitched.

This new shareholder is far too powerful.

Rong Xianwen and Goto Miki didn't react much to what he said, but Zou Jiasheng was a little confused.

He's been with Singularity Technology for seven months now, since the very beginning. Although he was just promoted to vice president, he's attended quite a few meetings with them.

Aside from the seemingly trivial matter of selecting board members, the chairman also made the final decision on the issuance of shares. Did the chairman ever ask everyone to vote on anything else?

Or has the group simply not had any major events to date?

Chairman Chen was extremely democratic at this moment, putting down his crossed legs and looking at the nameplate in front of Chen Bo with a gentle smile.

"Director Chen Bo, could you tell me what your opinions are about me?"

Chen Bo was a little embarrassed.

Independent directors are generally respected at Spreadtrum. They are directly responsible to the shareholders' meeting and usually don't care about anyone else when voting. They can speak their opinions directly, since their salaries are paid by the shareholders, not the board of directors.

So when Wu Ping and Chen Datong both voted, he didn't raise his hand either.

But being stared at by this outsider at this moment, I felt a bit lost and unsure of what to do.

Because the other party had a certain aura in every gesture, as if they could swallow the entire Zhanxun at any moment.

"Well, I just feel that given the company's current situation, it hasn't even made any money yet, and you're already thinking about expanding so much, there's a huge cash flow risk. Mr. Chen, could you explain your plan, and when do you intend to start it?"

Chen Xuebing sat up straight.

"Soon! I even think that talent recruitment and training should begin today."

This surprised everyone.

Chen Xuebing's radical attitude made Chen Datong, who had raised his hand first, somewhat regret his decision.

"Don't be impatient."

Chen Xuebing raised his hand again.

"Don't worry about the money. My 200 million yuan investment will be coming in soon. And I can explain the loan details I mentioned earlier now."

"Our Long March Capital's best fund, Fund I, has an annualized return of nearly 700%, and Fund II has a return of nearly 500%. The willingness of society to invest is getting stronger, and we will obtain a trust license this year. At that time, we can attract deposits from high-net-worth users at interest rates that are higher than those of banks, and invest in your R&D projects through loans. Moreover, these are long-term loans that can last for several years after your listing. You can repay them through stock market financing or even refinancing."

A question mark gradually appeared on the faces of everyone present.

?

700%? 500%?
What kind of fund are you?!
If such a business existed, why would you invest in Spreadtrum Communications?

Also, a trust license?

The United States has the most developed trust industry in the world, with a history of over 150 years. Many ordinary people understand trusts, but people in China don't. Entrepreneurs who have returned from abroad are very clear about the status of trusts.

A universal license allows one to engage in banking business as well.

The highest level of qualification review.

Wall Street Membership!

"Chen, uh." Wu Ping's throat was dry, and he choked for a moment: "Mr. Chen, are domestic trust licenses easy to obtain?"

Shouldn't it?

Is the nature of domestic trusts different?
But he already said that he could absorb social deposits and make loans!

Rong Xianwen and Goto Miki also looked at Chen Xuebing with surprise.

Having come from PricewaterhouseCoopers, they certainly understand trusts and are aware of the current state of trusts in China.

Not very good; the market is currently quite small.

However, these are not available to private enterprises; they are mainly concentrated in the hands of state-owned enterprises.

Chen Xuebing explained with a smile, "Of course it's not easy to get. There are only 68 licenses in the whole country. We only got one with the strong support of the Chongqing government. The domestic trust industry is still in its early stages, but it will soon grow rapidly because the higher authorities have decided to stop issuing trust licenses. Existing trust companies will gradually have their restrictions lifted after the last review this year, and the scale of the domestic trust industry will expand dramatically."

It has been discontinued.

Rong Xianwen and Goto Miki's expressions froze.

They had no idea about this.

That would be terrifying.

The reason why the rich become rich is that they are unwilling to deposit their money in banks and use meager interest to hedge against inflation.

They seek out various investment opportunities, and if no opportunities are available, they will look for financial products that far exceed inflation to ensure their comfortable life and social status.

Trusts are entitled to offer stable interest rates much higher than bank deposits, but now licenses are being suspended.
Does that mean all the money from wealthy individuals that has stabilized will flow to these 68 companies?
Large sums of money that tend to seek high-risk, high-return investments will flow into private equity.

Doesn't the chairman mean he's going to take over the management of all the money of the country's richest people?

Spreadtrum's management didn't think that far ahead; they simply gained a deeper understanding of the investor's financial strength.

Too strong.

And with an extremely firm attitude, he said to them, "Give it your all."

It sounds like with his involvement, the funding issue they've been worried about is no longer a problem.

Isn't this exactly the "unlimited R&D" that Spreadtrum has always pursued?

They've already invested 200 million, all tied to the same boat. How many shares do they even have? There's also a 250 million performance-based compensation guarantee, directly compensating the shareholders. Even if they lose, they'll still be rich. What's there to be afraid of?
“I agree,” Chen Bo said, raising his hand.

Chen Xuebing smiled and gave Goto Miki, who was in charge of the legal department, a wink.

Miki Goto stood up, took out three copies of the investment contract from her brown briefcase, and placed them on the table.

"President Wu, there's an agreement inside that authorizes President Chen to appoint the president through the shareholders' meeting and the board of directors, as well as an agreement to expand the board of directors by two members. Take a look."

The shareholders' meeting had already made a resolution, and the contract was signed quickly.

The meeting did not end.

"Since I'm in charge of the business, I'll make the arrangements directly."

"You should contact the leaders in Shanghai now to help you apply for the National High-Tech R&D Program (863 Program) subsidy from the Ministry of Science and Technology. I'll go with you. If Shanghai has any objections, I'll immediately contact Chongqing for you. The leaders there will probably be very willing to help you with this. Anhui is also an option. I can contact the city leaders in Chongqing or the provincial leaders in Anhui to confirm this. Anyway, Spreadtrum's R&D center is in Beijing. If the company headquarters doesn't work out, we can just move it."

Chen Xuebing made the decision, demonstrating his extensive network of connections.

"Uh..." Seeing Chen Xuebing's murderous aura and his desire to move the headquarters right away, Chen Datong quickly said, "No need, no need. I know an old leader in the Ministry of Information Industry. We can apply to the ministry directly for this matter."

"Oh?" Chen Xuebing didn't expect Chen Datong to have connections directly to the ministry.

Vice President Fan Renyong said with a smile: "When President Chen decided to bring us back, it was at the invitation of the old leader, who even treated President Chen to a meal."

Wu Ping smiled and said, "Shanghai has been very good to us. The land for this building was approved by Shanghai. This year, they also promised to build a Shanghai R&D center for us in Zhangjiang. We only need to contribute 15 million. It would be inappropriate for us to leave now. I hope President Chen will not think about moving away from Shanghai. Shanghai is the fertile ground for Spreadtrum."

Chen Xuebing was startled again.

It costs him 30 million to build a laboratory, a research and development center, which includes many laboratories, even though the building doesn't include equipment.
"A research and development center must cost at least hundreds of millions, right? Shanghai is treating you so well?" Chen Xuebing asked. Wu Ping nodded, his expression not without pride.

He goes to the municipal government to receive awards on average every two months, some from the company and some from himself.

Chen Datong chuckled and revealed the truth: "The government was initially hesitant about this R&D center, but then the Hanxin incident happened before the new year. You know about Hanxin, right?"

"Oh!" Chen Xuebing suddenly realized.

When Chen Jin's scandal broke, it sent shockwaves through the entire chip industry. Shanghai and Shanghai Jiao Tong University were also greatly affected. Coincidentally, Spreadtrum also had a stake in the DSP chips that Chen Jin "researched." Shanghai's support for Spreadtrum was an attempt to regain face and prove that Shanghai's chip industry was not dead.

This environment is indeed very favorable for Spreadtrum.

And Shanghai will be the birthplace of the dragon next year.

This is a perfect opportunity to shine.

Chen Xuebing felt somewhat invigorated as he thought about it.

"Then why bother with Zhangjiang? We should build the research center in Waigaoqiao! Spend more money and make it big! Establish a research institute!"

"Waigaoqiao?" Chen Datong was taken aback, then remembered something: "Bonded Zone?"

"That's right!" Chen Xuebing slammed his hand on the table. "Once we get to Waigaoqiao, you won't have to pay taxes on the imported equipment. How much money can you save? Anyway, those research equipment don't need to be cleared through customs!"

Hiss!
Everyone gasped.

This Mr. Chen has excellent taste!
Conducting research in a bonded zone where land is incredibly valuable?

"Wouldn't it be difficult to communicate with him?" Even the proud and arrogant Wu Ping hesitated.

"Let's leverage our strengths!" Chen Xuebing tapped the table with his finger: "Let's say we're going to develop DSP! And we'll develop high-precision DSP, to make Shanghai proud!"

This statement left everyone bewildered once again.

"DSP is a byproduct; mobile phones in Huaqiangbei don't even use it anymore. If we spend so much money on high-precision DSP, who would we sell it to?"

DSP is a coprocessor that can reduce the CPU load and help process digital signal calculations, audio noise, baseband coordination, and sensor data processing.

Spreadtrum only started doing this in the last two years.

Early mobile phones did not have a DSP module. It was only after feature phones became popular and multimedia modules were introduced that they began to be included.

However, neither MediaTek nor Spreadtrum will pair their turnkey solutions with high-precision DSPs. These are usually just good enough, with the main focus on cost-effectiveness.

To ensure those basic functions, 180nm is smooth enough, why insist on 130nm?
For chips, increasing precision by one generation results in a geometrically increasing cost.

Spreadtrum's baseband chips also have a 130nm precision.

Apart from CPUs, other chips do not have high precision requirements, so domestic manufacturers, except for those that design CPUs, have basically not felt the bottleneck problem in chip manufacturing.

Upgrading a generation doesn't necessarily improve performance to a level that users will noticeably perceive; instead, it will significantly increase the price, drastically reducing the purchasing desire of mobile phone manufacturers.

Chen Xuebing smiled and said, "Who would we sell to? Aren't we promoting 3G? Why are you still stuck in 2G thinking? Who do you think we'd sell to?"

As he spoke, he stood up and slammed his hand on the table: "Comrades, it's not just the big manufacturers; the mobile phones in Huaqiangbei also need to be upgraded! The terminals will undergo significant changes in the 3G era! If Huaqiangbei can't keep up with the times, this market will collapse! Do you still want to make money in it?"

When Apple entered China in its previous life, it was not only a revolutionary movement for domestic manufacturers, but also a disaster for Huaqiangbei.

Small manufacturers simply don't have the means to upgrade their own chips and can only rely on MediaTek. MediaTek is slow to act, and its turnkey solutions can't keep up with the upgrades of major manufacturers. In addition, Xiaomi's "Redmi" swept the low-end market, and the counterfeit phones in Huaqiangbei were wiped out of the market.

If Spreadtrum had laid out its turnkey design strategy for the 90nm era early on, coupled with its UI design and software ecosystem, it could have given Huaqiangbei an extra two or three years.

If Lu Weibing's popcorn business intended to enter the low-end market, he wouldn't have mentioned it today.

However, Lu Weibing wanted to start with mid-range phones, gradually reduce supply chain costs, and slowly expand to cover low-end phones.

Qilin is also targeting the high-end market.

The low-end market has become vacant.

Integrating the supply chain and reducing costs through domestic substitution takes time. So what will happen to the low-end market in the next few years?
Who gave his UI the ability to conquer new territories?

Huaqiangbei seems just right.

Those counterfeit manufacturers have a strong sales force; they've sold their phones all over Southeast Asia, and even to African and Middle Eastern countries.

When the time comes, as long as Huaqiangbei upgrades the 3G low-end smartphone chips, and Qidian follows the example of Android in the past by making a small-memory "Kitcat" version for those low-end phones, its system will soon flow into some unimaginable distant places, allowing third-world countries to enjoy the power of technological equality ahead of time.

Singularity doesn't need to rush to various countries to promote itself; Huaqiangbei has its own enormous drive.

Spreadtrum has also been able to firmly capture the most profitable chip market in Huaqiangbei.

"Uh, 3G, does it really have such a big advantage? Can it completely dominate the Huaqiangbei market?"

Fan Renyong works in sales, and he has a clear understanding of the development of the feature phone market. He couldn't imagine that 3G could have such a big advantage.

At this moment, Zou Jiasheng, who had been silent until now, chuckled.

"Once 3G arrives, it will absolutely have a disruptive advantage, which is what we at Singularity developed."

"Hey, hey?" Chen Xuebing tapped the table and glared at him: "Company secrets! Don't talk nonsense!"

Zou Jiasheng stopped awkwardly: "Chairman, isn't this a competitor? I see you've already brought it up."

Chen Xuebing chuckled.

Competitors?

Our competitors are idiots.

"As for our competitors, just reveal a little more than the market information! Now is not the time! My shareholding is a personal matter. Unless Spreadtrum and Singulato have cross-shareholdings, there can be no barrier to information exchange!"

Chen Xuebing left Zhanxun with a question that left him puzzled, and then began to act mysterious.

Wu Ping smiled without saying a word.

What is a singularity? I don't know.

Cross-shareholding is impossible.

Don't try to fool me.

Chen Xuebing certainly didn't plan to immediately engage in any cross-shareholding. He would wait until Singularity monopolized the mobile operating system ecosystem, completely eliminated Android, and started charging Spreadtrum system installation fees. Spreadtrum would then come to him.

That would be a fair trade.

However, I still need to explain this for now.

Chen Xuebing rested his hands on the table, surveyed Spreadtrum's management team, and spoke eloquently:
"In the 3G era, most people's guesses are video calls, online calls, high-speed internet browsing, mobile TV, and the ultimate test of 3G capabilities is also video calls. Many industry insiders believe that 3G cannot yet achieve smooth video calls, but I tell you, let go of these ideas. The changes brought about by 3G-level network speeds are far more than these. It will change our lifestyles. Mobile phones will be developed as the only terminal in our lives. It will eliminate televisions, computers, and even wallets, physical ID cards, and countless functional products. Higher chip generations represent a higher-dimensional revolution. Don't be afraid to spend money. All the overseas technological resources that are currently open to you may one day be closed. I hope you will break free from constraints, run hard, and cherish this era."

After Chen Xuebing finished speaking, he slammed his hand on the table.

"I can tell you something: the mobile phones developed by Singularity Technology use 65-nanometer CPU chips. We secured a contract with TSMC for their latest production line with a 60% yield threshold. That's my stance."

Everyone was shocked.

65nm, that's the latest generation.

A contract with a 60% yield rate!
In other words, a chip worth 500 yuan will cost more than 800 yuan!
A new generation must involve new design solutions; it requires design and chip fabrication…

The yield rate also affects the fabrication process; the lower the yield rate, the greater the likelihood of fabrication failure.

How much does that chip cost?

"What kind of phones do you guys make?" Wu Ping stood up. "Design samples, can I take a look?"

65nm, unheard of! What kind of mobile phone can use a 65nm CPU?

Chen Xuebing glanced at him: "We'll hold a press conference in October. In September, I'll show you the baseband chip. I've ordered Spreadtrum's 3G chip. I can place an order with you now for 200,000 units. I don't want your 130nm SC8800A. I want a 90nm TD/GSM baseband. You must make the best of it in terms of heat dissipation, conductivity, and reducing hardware consumption. Find a way to improve the peak network speed. The protocol stack memory usage must be less than 1.2MB, the power consumption under full load cannot exceed 380mW, the standby current must be less than 4mA, and the receiver sensitivity must be improved by more than 10dB. We will subsidize the R&D expenses with 20 million yuan. You can set the chip price yourself. You must break through the high-performance baseband."

Everyone was incredibly proud of the chip that Spreadtrum had just developed, but upon hearing Mr. Chen's requirement, it became clear that they were aiming straight for top-tier international standards.

How can we reduce power consumption while increasing speed?

Upgrading to a 90nm chip could solve the problem.

"The price of that chip... will at least double. Even with a discount, it will still be at least $25. Is it worth it just to improve such a small parameter?" Wu Ping asked.

Let alone Chen Xuebing, it's not worth it for them either.

Finding foundries is easy; there are manufacturers for this process all over Asia. SMIC, which is less than a kilometer away from them, has already mass-produced 90nm chips with a high yield.

However, the subsidy of 2000 million is far from enough to cover R&D expenses, including EDA tool costs, IP licensing fees, and tape-out costs for the 90nm generation. Although tape-out for 90nm is not particularly difficult nowadays, it still costs at least one tape-out fee.

They must have put in at least 20 to 30 million.

Of course, the design process involves accumulating experience in high-end product development, which is something they must invest in to move towards the next generation of technology.

However, wasn't this breakthrough too early?

Wu Ping was a little worried, but Chen Xuebing wanted to laugh when he heard about the $25.

Domestic substitution is indeed the only option.

This standard 3G chip costs only $25.

Damn Marvell, they sell a 2G chip for $9!

Infineon's WCDMA 3G chip has even lower specifications, yet it's priced at $37!

Not to mention Qualcomm's 3G baseband, it's sold bundled with the CPU, a mandatory buy-one-get-one-free deal, plus a "my territory, my rules" package.

"I only care about speed."

Chen Xuebing's attitude became increasingly firm. He took out his mobile phone from his pocket and placed it on the table. The gold "customized" Nokia 3310 was quite dazzling.

"I've been using this phone for a long time and haven't replaced it yet, just waiting for the phone I want. I hope you can help me."

Those present clicked their tongues in disapproval.

This guy is a true player, building it himself with a mobile phone, probably costing hundreds of millions.

Wu Ping's eyes gradually became more intrigued; he realized that this investor had a desire for new technologies that exceeded his own.

His creative passion, which he had when he first returned to China, is slowly being rekindled.

Since the successful development of the last chip, he hasn't opened the EDA tool for more than a month, as he has been busy with management and sales.

At this moment, he really wanted to hand over the company to Chen Xuebing and enter his own battlefield.

"Mr. Chen, your phone is online now, could you give me one?" Wu Ping asked with a smile.

"Give you one?" Chen Xuebing laughed. "Just one. If the foreigners next door see this, they'll think we can't afford one! One for each of us!"

(End of this chapter)