Those Years When I Was Forced to Top the Forbes List

Chapter 255 Business War
The following day, undercurrents were stirring.

Looking out towards the Digital City.

"Mr. Zhang, we've reduced the price of the MT6626 chip kit to 82 yuan. If you sign an exclusive agreement, we'll also throw in three new molds! We guarantee your new factory can launch products within half a month!"

"Hey! Spreadtrum already agreed on this with me yesterday! Spreadtrum offers more services and includes IMEI code burning. MediaTek's solution has to handle compliance itself. Who will be responsible if it gets shut down?"

"They won't take responsibility if something really goes wrong! You think we can't do it? The reason they dare to make promises now is because their market is small and they have few customers. If they really took over the market, would they still provide you with so much service? How could that be?"

"Let me think about it."

Hongyun Seafood Restaurant.

The general agent of MediaTek in South China personally handed several cups of tea to the bosses with a smile, but the eyes of the burly men standing behind him were not friendly.

"Old Wu, you've reduced your order volume by 30% this time. What's wrong? Is the market tough?"

Sweat beaded on Old Wu's forehead as he chuckled dryly, "Brother Hong, the checks have been strict lately, and some small customers are afraid to take orders."

"Really?" Hong slowly peeled a shrimp. "But I heard that you have 4 Spreadtrum SC6600B chips stockpiled in your Longgang warehouse?"

Old Wu's expression changed slightly, and the hearts of the other bosses who had placed orders with Zhanxun also sank.

"Brother Hong, Spreadtrum offers high rebates, and our clients want to try it out. I have no choice; I'm forced into it."

Hong sneered: "Forced? Fine, then I'll force you too? Starting tomorrow, MediaTek will change your 90-day payment period to cash on delivery, which will affect your cash flow for those stockpiled goods."

He popped a shrimp into his mouth, his eyes gleaming with a flippant glint: "Can you handle it?"

At that moment, Lao Wu's phone vibrated.

He picked it up and saw it was a text message from A-Jie, a sales representative from Spreadtrum Communications.

[Mr. Wu, 10 units have been prepared. A 5% rebate will be given upon cash settlement. They can be picked up tonight.]

Old Wu let out a long sigh, put down his phone, and suddenly became firm: "Brother Hong, we've been cooperating for a year and a half. You've been using your position as the general agent to raise my prices and delay my payment terms. I had no choice but to tolerate it before, but now you can't meet the conditions that Spreadtrum is offering! I don't want to tolerate it anymore!"

Hong's eyes turned cold, and his henchmen stepped forward.

If he can't handle this troublemaker today, he won't be able to talk to the others either.

"Old Wu, you know the rules of Huaqiangbei. People who betray their own side will never make it in the end."

He stood up, slowly wiping his hands, and gradually approached Old Wu: "Do you think those Spreadtrum chips in your warehouse might accidentally catch fire tonight?"

As Old Wu was approached, his breathing became rapid.

boom.

The door to the private room was suddenly pushed open.

Huo Xiaowen, wearing a tightly tucked-in shirt, walked in.

A dozen or so people followed and surrounded the entire private room.

“Ah Hong, why are you so angry? Old Wu is now a core agent of Spreadtrum, we'll protect his goods.”

Huo Xiaowen smiled, pulled out a chair, and sat down. He gave a perfunctory handshake to the two manufacturers next to him, then looked up at Brother Hong and smiled:

"If you want to touch them, you're touching Spreadtrum."

Hong Ge narrowed his eyes.

He knew Huo Xiaowen. When he first came to Huaqiangbei, he couldn't even get a word in edgewise. Every time he saw him, Huo would call him Brother Hong with a smile. But as his influence grew, in the blink of an eye, Huo started calling him "Ah Hong".

He glanced around at the people, picked up the phone, and sneered:

"You're going to play this game with me, huh?"

Huo Xiaowen scratched his head nonchalantly: "You can play whichever game you want, just draw a line and I'll play along."

Ah Hong gave a forced smile: "Kid, believe it or not, I'll throw you into international waters to feed the fish tomorrow?"

"Heh." Huo Xiaowen shook his head and chuckled, then stood up and walked up to him, his gaze turning fierce: "You think you're so tough hanging out with a Taiwanese guy? If something happens, do you think Cai Mingjie will come from Taiwan to save you? Can he even save you? Get your facts straight. My boss and I are brothers. If you dare touch me, you'd better be prepared to disappear."

Ah Hong's face gradually darkened.

He had already heard about the mysterious boss behind Spreadtrum.

rich.

Very rich.

They can pull out hundreds of millions in cash. Many of the bosses who are now working with Spreadtrum have been set up on a mysterious path to wealth.

He didn't understand what a fund was either; he could only regard it as mysterious.

These days, everything has a price.

People like him risk their lives for fun. They may be successful when they're in the limelight, but if they suddenly disappear one day, no one will care about them, and no one will even call the police for them.

He gritted his teeth, knowing he had met a tough opponent today, but he couldn't afford to lose face, otherwise he wouldn't be qualified to be the regional general agent.

"Old Wu—don't forget, business in Huaqiangbei can't be settled with money alone."

He ignored Huo Xiaowen and prepared to leave after finishing his sentence.

"Hey." Huo Xiaowen chuckled and continued, "Money alone can't solve everything, but MediaTek's chips have problems. I wonder if you can handle that."

Hong's expression changed, realizing something was wrong, and he quickly picked up his phone and made a call.

It took a few beeps before the call was answered, and the sound was a jumble of noise as soon as it connected.

"Brother Hong! Something's happened!"

Feiyang Digital City.

noisy.

A group of people were making a scene around a stall selling MediaTek phones.

"What happened? I'm asking you! What happened! Why is the screen black?!"

"Give us an explanation!"

"My money's gone! Now all the distributors in Fujian are asking me for refunds, what am I going to do?!"

The stall owner was anxiously making a phone call, completely oblivious to the crack that had appeared in the glass of his counter after someone came to return a product.

"Mr. Lu, all 3000 of our phones have black screens, and many people are asking for refunds! What should we do?"

The voice on the other end was relatively calm: "We are investigating the situation. Are you sure the problematic phone chip came directly from us?"

The boss felt guilty when questioned, and it was likely that the problematic phones were a batch of goods he had bought at a low price some time ago and then resold.

But if they admit it, MediaTek won't take responsibility for them.

"Yes! Come and see for yourself! It contains your chips! What's going on? Were you hacked?"

The boss looked up and saw that many stalls on the floor were surrounded. He was convinced that they were not there for him, but for MediaTek.

At that moment, a group of people came up from downstairs, making a ruckus.

"You son of a bitch MediaTek! What kind of time lock did you put on my phone?! It locks up when the time is up! Did I breach a contract? Why are you messing with me?"

"Damn, this phone is a piece of junk!!"

Snapped!
As he spoke, the leader pulled a cell phone out of his bag and smashed it on the ground!
This is not over yet.

He said a few words, took a few steps, and then pulled another cell phone out of his pocket.

"Damn, that's too much!"

Snapped!
Another one smashed.

A touring performance in Huaqiangbei.

"That's a MediaTek, right? Grab him!"

With a loud shout, the MediaTek salesmen who had just been pitching to the stall owners scattered like birds and beasts.

True business warfare is simple and unpretentious.

The business owners along the way were all watching.

Everyone understood what was going on.

Rumors had long circulated that MediaTek had installed backdoors in chips for some smaller manufacturers, locking their devices if payments weren't made by the deadline, and it turns out to be true.

The boss, who was on the phone, beamed with delight: "Did you hear that, Mr. Lu! There's something wrong with your phones! You installed locks, didn't you? Now they've been smashed!"

There was a moment of silence on the other end, then a very calm voice said, "Mr. Liu, that's impossible. I personally handled this batch of chips. They weren't locked. Did you take someone else's phone and sell it?"

The boss's expression froze for a moment, but he quickly regained his composure: "It's normal for us to restock! I only order phones from your MediaTek division, right? Aren't you going to fix that?"

The other side remained calm: "We will try to resolve this, but you need to get the original delivery slips for the goods you purchased from us."

"Damn it!" the boss couldn't hold back and cursed.

If he had a delivery note, how could he have gotten this batch of goods at a 9% discount?

"I've been buying from MediaTek since the very first day they entered Huaqiangbei, and you're not going to resolve this? I'll never buy from MediaTek again! I'm going to place an order with Spreadtrum right now!!"

SEG 58.

"The person has left, and we've given them a warning, but they seem a bit defiant. We need to be careful."

Hearing the voice on the other end of the phone, Chen Xuebing's eyes turned cold, and he said:

"You're not convinced? Then fight me until you submit."

He glanced at the concerned factory owners in the room, then got up, walked to the window, and opened both windows. The wind, typical of high-rise buildings, whistled in, and he said to the outside, "Don't do it yourself. The people from Chongqing will arrive by tomorrow at the latest. Just find a few people to guide you and let them handle it."

Even if a recording device captures the sound of wind, it is still barely discernible noise.

Those present could vaguely hear what he was saying.

After he finished speaking, he closed the window, turned around, and the hostility he had just displayed disappeared, replaced by a seriousness and authority.

"Besides him, there were several other agents who used dirty tricks, and they were dealt with as well. Huaqiangbei will never allow such brutal competitive practices to exist again! We must restore a clean and fair business environment to Huaqiangbei!"

"."

The person on the other end seemed a little confused, said "oh," and hung up.

The people in the room remained silent for a long time.

That tone made it sound like some anti-gang leader had come down from somewhere.

Brutal methods?

Clean and fair?

Brother, that's a brutal approach!

Before you came, Huaqiangbei was quite quiet!
Zhou Chengyun from Spreadtrum swallowed hard, not expecting that President Chen was so adept at this.

However, without Mr. Chen, how could Spreadtrum possibly compete with MediaTek's influence within the company?
Thoughts swirled.

At this moment, Chen Xuebing put down the phone and smiled softly at everyone:

"I know you're thinking, 'This is Huaqiangbei, a counterfeit market, it's illegal to begin with, so how come there's no fighting each other?' But let me tell you, things are about to change. According to reliable sources, the mobile phone production approval system will be abolished next year, and the 2G era licensing system will end. Then everyone will be qualified to produce genuine mobile phones. I called you here today because our new fund approval is coming through soon, and it will start operating in a few days. Seize this opportunity to make money. Next year, we're going to revitalize Huaqiangbei and merge 15 to 20 genuine 3G mobile phone factories. Whether you merge or are merged depends on your accumulated strength. But I believe that everyone who enters this door today has a chance."

This is the highlight of today.

Everyone heard that Mr. Chen's private equity funds ranked first in the country, and they all wanted to make a fortune there.

"Mr. Chen, I heard that your fund guarantees a return?"

Just as someone asked the question, Kan Zhidong, who was standing in the middle of the crowd, tapped the blackboard in front of him.

"Our fund is fully open, so where does the guarantee come from? Stop asking questions, sit down and listen quietly to what I have to say!"

"Listen to what Mr. Kan has to say, all your money is being managed by him."

After Chen Xuebing said this, everyone fell silent.

He put his hands behind his back and strolled leisurely towards the door.

Mr. Chen's series of moves had been brewing for over two months.

When the call was made, MediaTek's sales system in Huaqiangbei almost collapsed.

MediaTek immediately removed the time lock program, but it had no effect at all; the machines that had been turned into bricks still couldn't be turned on.

Some merchants deliberately caused trouble, forcing them to recall those defective machines, and the technical department spent almost all its energy on repairs.

Lin Bin implanted several backdoor programs into them, which were impossible to unpack in a short time.

MediaTek's manager, accompanied by legal counsel, came to the company, saying they had found some evidence proving that all the problematic phones came from Singulato's counters and that they were going to sue Singulato. However, they were met with a question in return.

"Sue us? MediaTek illegally implanted backdoor programs into users' phones, causing 20 phones to be scrapped. Is that legal? We still have many scrapped phones in our hands, all returned by our customers. Even if you repair them, we can't sell them! Sue us? We'll even call the police and demand compensation for our losses!"

If open methods don't work, then covert methods won't work either.

Within two days, MediaTek discovered that it could no longer contact several of its distributors.

When I received their call again, it was as if we had been forced to agree on the same story: I had already returned to my hometown, there were family matters to attend to, and I needed to rest for a while.

MediaTek is in a real bind.

Spreadtrum, however, announced with the newly negotiated OEM contract that Spreadtrum chips would focus on operating in Huaqiangbei, with ample supply. All business would be jointly operated with Singularity Technology, allowing customers to place orders directly at the nearest store, eliminating the need for intermediaries to profit from price differences.

All manufacturers that joined Spreadtrum received a promotional brochure for the "Long March 3" financial product.

In less than a week, Spreadtrum's order volume exceeded 300 million, and its market share in Huaqiangbei exceeded 20% that month.

Chen Xuebing received a thank-you call from Wu Ping.

"President Chen! Huahong's production line has been debugged and started producing for us! Spreadtrum has received more orders in the past two weeks than in the previous few years! We've finally gained a foothold! Once our orders exceed ten million, we can negotiate better prices with chip manufacturers! We use chips from mainland Chinese manufacturers at a lower cost than them, so we're not afraid of price wars anymore!"

Chen Xuebing was not smug: "We need to maintain contact with TSMC. If they have spare capacity, we should continue to cooperate. In the short term, the mainland's process technology can only reach 90nm. 65nm is the core process technology for the 3G era. Spreadtrum needs to continue to move towards 3G and 4G and has a long-term vision."

"Understood. Qidian has been a great help to us in this market battle! President Zhou and I discussed increasing Qidian's profit share by three percentage points. We'll hold a board meeting tomorrow to discuss this!"

Wuping has now fully realized the importance of Qidian. The 20% commission is rightfully Qidian's, and since Qidian will also incur labor costs for providing technical support in the future, they should provide some compensation.

"Thank you then." Chen Xuebing said casually, "Our market share will increase soon. We can keep MediaTek at bay for now and prevent them from engaging in a price war."

"Oh?" Wu Ping was somewhat surprised: "President Chen, you have another idea?"

"of course."

The Long March's use of capital was the real blow.

Currently, some manufacturers are still hesitant, and some people have doubts about the profitability of the Long March 8 rocket. However, once the bull market fully unfolds in August and a large number of people reap the rewards, Spreadtrum's success will change many people's minds.

"But the key to completely avoiding competition lies in technological innovation."

Chen Xuebing always thinks three steps ahead before taking a step. It's not that he's too smart or overthinks things, but rather that future trends are already in his mind, and he simply can't ignore them.

His long-term habit of thinking has also made his mind much more active.

“I know! R&D has been going on non-stop! Zhang Hao and Zhou Guangping have been transferred to the R&D center. Zhang Hao is in Chongqing leading the protocol stack R&D team, Zhou Guangping is in charge of RF R&D and smart antennas at our new R&D center in Shanghai, I am in charge of the 90nm baseband, and Chen Datong is in charge of DSP! We have now handed over the 2G business to a team of 20 people, and our technical meetings are all about discussing the 3G direction!”

“I know.” Chen Xuebing nodded with a smile: “I’m not an expert in technology, so you can make reasonable arrangements. However, Dr. Zhang’s FBAR filter technology is very good, and he also intends to promote its commercial use in China. Don’t waste this technology.”

Filters are used to shield interference signals. This technology can exist as a standalone chip or be applied to the radio frequency front end.

It can be used with mobile phones, routers, and base stations.

In this era, the more poor the spectrum management, the lower the network coverage density, and the weaker the management of interference sources, the more prominent the effect of this technology becomes.

The Kirin mobile phone circuit board currently uses filters from Avago, which are inexpensive at $0.8, but the performance is not optimal. If it can be used in conjunction with an integrated filter chip, the effect will be much better.

Zhang Hao researches filter chips and already has several personal patents.

"Zhang Hao knows so much—filtering, radio frequency, communications, chips!" Wu Ping exclaimed. "If you hadn't been so reluctant to let me have him, Professor Chen would have already made him the CTO!"

Chen Xuebing smiled upon hearing this: "Use it with confidence. Talents from Singularity and Spreadtrum can exchange ideas. Technology needs to be passed down from person to person, mentoring and guiding others to build up the communications team. While veteran experts are valuable, new ideas are the new way out. We need more young technical experts."

"Mr. Chen, I'm starting to admire you. Your strategic vision is truly outstanding! I heard Mr. Zhou talk about your smartphone the other day, and I almost didn't want to leave."

Chen Xuebing raised his eyebrows. Actually, Wu Ping's departure would have been more beneficial for him to control Spreadtrum, but he still said, "Isn't that good?"

"When can I see a smartphone? I can't wait to get my hands on one."

"soon."

Chen Xuebing hung up the phone, lit a cigarette, and sat on the sofa, lost in thought.

He couldn't help but feel a little anxious when TSMC was mentioned earlier.

The moves are getting bigger and bigger, with smartphones and operating systems all working together, making it increasingly difficult to hide one's tracks.

What about the situation in the US?
I was originally determined to hold out for a while, but it's already July and there's still no movement in the US soybean futures market. The May-July contract experienced a drop before the rollover, and I almost got liquidated with 5x leverage. The longer-term contracts did see a small rise, but overall I only made about a million US dollars.

The relationship between the two sides is currently acceptable. More importantly, the chip generation gap is not large. There is no significant difference between EUV and DUV. Restrictions on advanced processes still rely on Samsung and TSMC. There are too many loopholes. The most crucial period was the decade after 08 when EUV lithography machines developed rapidly.

From 09 to 16, the United States was under the rule of the Democratic Party.

He has been studying US policies recently. Paying protection money through campaign funds is not a viable option. First, there are limits on corporate and individual donations, and donations from overseas sources can trigger FARA investigations.

The attitude of the MZ party towards technology sanctions is actually quite divided. Obama belongs to the establishment, represented by Kissinger, who tends to maintain the status quo and support free trade and multilateral cooperation. Even under the subsequent sanctions, the establishment still used the extension mechanism of the "Science and Technology Cooperation Agreement" to keep the door closed, deliberately avoiding cooperation in civilian technology and maintaining the high-tech export market.

Therefore, it is hard to say whether Obama will impose special sanctions on technology during his two terms. However, blindly engaging with Obama could lead to Singularity being prematurely added to the list of "foreign interference entities," resulting in unnecessary risks.

It could even lead to misunderstandings domestically, with people viewing this type of behavior as "capital flight" or "political speculation."

The risk is too great.

However, the recent US midterm elections present an opportunity, as the Senate elections involve more than 100 candidates, and their intelligence systems do not focus too much on individuals.

But you must have a suitable partner.

Actually, there is one, and the timing is also very suitable.

The Carlyle Group.

This company is known as the "Presidents' Club." Former Secretaries of Defense and State were involved in its early decision-making process. Kissinger and George H.W. Bush were chairs of their advisory board a couple of years ago, and a former British President is the chairman of their European branch. It has close ties with many political figures.

The key is that they focus on private equity, prioritize profitability, and recruit retired senior leaders.

Unlike Goldman Sachs, a full-service investment bank that acts as a political and business revolving door in the US during each current term, supplying the government with Treasury Secretaries, directly participating in policy-making, and having a complex and extensive structure with secretive and low-profile senior executives who are difficult to win over.

Carlyle has a smaller influence, but it is easier to reach and has invested more in China.

They are currently pursuing a controlling stake in XCMG Group, aiming to acquire 85% of the shares.

This acquisition is a landmark event in foreign acquisitions this year, and it is highly controversial. As one of the leading companies in the construction machinery industry, Chen Xuebing knew about it in his previous life. The acquisition went through 05-08, with Carlyle's stake dropping from 85% to 45%. The agreement was revised several times, but it was ultimately rejected by senior management on the grounds of "leading to technological monopoly" and "loss of state-owned assets".

Chen Xuebing is actually quite interested in XCMG.

But helping Carlyle acquire it doesn't align with his mindset.

How to intervene is still a question worth considering.

(End of this chapter)