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Chapter 71 A Chip Company That Doesn't Focus on Its Core Business

There is a company in London that produces very few products, but invests a lot in research and development every year. This company is called ARM.

Since being acquired, it has not produced many chips each year, but it is very famous in certain fields. A certain RISC chip is used in high-end mobile phones or some tablet computers, and of course, AnKang computers.

Ankang computers use a simplified version of the Android system, which is somewhat similar to Apple's macOS, but simpler.

However, Ankang computers did not sell many units, and their sales were quite limited.

This is also the origin of this strange company. At that time, the company's CEO and technical director, Robbie, contacted Zhang San. The company's chip was only sold as a finished product and the technology was not licensed to others.

Zhang San answered decisively, saying, "The current environment is not yet the time for us to shine. Once we have a large amount of technology, the time will come for us to make our mark."

ARM's biggest customers are Apple and Nokia.

The fruit company had wanted to invest in ARM for many years, but Zhang San beat them to it, spending a lot of money to buy all the related companies and form ARM.

The fruit company, which had previously had a good working relationship with ARM, became a partner of ARM and purchased a large number of ARM chips.

The ARM6, developed in 90, provided powerful computing capabilities for Apple's computers.

As for why Nokia became an ARM customer, it is related to Texas Instruments (TI). If things had gone according to plan, the emergence of ARM6 would have been licensed to TI, and TI's signal chips were Nokia's main supplier. Originally, TI, which was licensed, would have provided Nokia with signal chips and processing chips for ARM6.

However, Zhang San's emergence changed ARM's business model, which focused on self-developed chips and self-production and self-sales.

This approach would have limited ARM's development. In the original timeline, due to a lack of funds, they changed their business strategy, focusing only on design and not production, and then licensing their products to downstream manufacturers, thus achieving rapid growth.

But after the acquisition, they discovered that they had latched onto a powerful patron, and a very powerful one at that.

They have ample research funding every year, which gives them confidence and allows them to focus on research rather than sales or other business matters.

This led Nokia to discover that ARM chips were the best after searching through various options, as they were low-power and fast, perfectly meeting their needs.

Thanks to these two major clients, ARM finally achieved break-even in the fourth quarter of 1991 without Zhang San's investment.

During his call with Robbie, Zhang San simply told them to focus on research and development and not worry about anything else; moreover, he wanted to recruit more idealistic and insightful individuals dedicated to chip development to join the project.

Therefore, in the middle of last year, Zhang San bought a lot of land near the new laboratory and built a row of villas to serve as their apartments. These villas conveniently surrounded their laboratory building.

Many people from related majors at nearby universities love to work here after graduation. It has the best equipment and research instruments, the best research environment, and of course, the best conditions, such as villas and apartments.

"I feel that ARM is the place chip engineers should go. I've heard the environment is excellent and the bonuses are very generous," a student with thick glasses said wistfully. "Luckily, I'm majoring in mathematics. I'm going to apply to this company this year."

"Those bonuses are substantial; they come after you've made a contribution."

"Their bonuses are higher than those outside," someone said indignantly. "My uncle works there, and I want to go too. I heard there's a 24-hour canteen."

"I heard they've set up a research institute and are recruiting graduate students. Haha... Will companies outside the industry recognize the degrees they issue there?"

"However, I heard that people from the Far East applied there, but I don't know if it's true."

"It's true, they are Chinese, there are about seven Chinese international students."

The seven Chinese students they mentioned were selected by Zhang San to study here; it was just an experiment for him.

It's not that Zhang San wants to do anything; he's just trying to give himself more say.

In February 1992, they set aside a team to develop sensors, working with researchers from a former East German optical equipment company to create a miniature camera device.

This year, we will recruit engineers specializing in related research and development areas to work together on key challenges.

Due to limitations in production tools, the production speed of the ARM6 series chips could not keep up with the needs of Apple and Nokia.

"We can either buy more advanced lithography equipment or develop it ourselves."

Robbie agreed with his boss, saying, "That's what I think too, but given the current situation, there are two suppliers of lithography equipment in Japan, one in Silicon Valley, and one in the Netherlands. I don't know which one to choose first."

"Oh, what's the name of that one in the Netherlands?" Zhang San asked casually.

Robbie said, "It's called ASM. Their lithography equipment doesn't seem to be very well-known."

"Yawn, Robbie, do you think we can buy that company? Go talk to them and see if we can get it." Zhang San yawned, then continued, "I'm going to rest now. Let me know if you have any news."

Robbie heard the busy tone and realized it was quite late there, which was inconvenient; however, thinking about how his boss had bought ASM, he felt that his boss was much more generous than him. Was this what a golden opportunity was?

In that case, he immediately contacted ASM and proposed an acquisition agreement to them.

In recent years, there have not been as many digital products as in later years. The global chip industry is in a slump. Even in 2000, there were still no decent products. Computers and arcade machines still dominated this period. Of course, arcade machines will be gradually phased out.

The handheld game consoles produced in island nations still use the MOS6500 chip, invented in 1974, which shows how few entertainment products they have.

As for whether ARM can acquire ASM, Zhang San doesn't care. Even if he acquires it and just watches it for fun, he'll be happy. If he does acquire it, he'll probably move the entire production to mainland China, as a way of showing respect to his Far East customers.

The principle is to try your luck, even if there are no good results yet.

He has money now; if necessary, he can borrow from the Bank of England and use it for acquisitions. That would be good.

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