Return to 1958 and build a century-old giant

Chapter 876 Cooperation with ARM

The next day, Yang Wendong took Liu Weimin to the location of Acorn Company in Cambridge. At present, it was just a small company, and Yang Wendong didn't even pay attention to the street name.
"Hello, Mr. Yang." Two of the white men stepped forward and greeted Yang Wendong, who had just gotten out of the car.

Liu Weimin quickly introduced, "Mr. Yang, these two are Herman Hauser and Chris Curry, the founders of Acorn Company."

"Hello." Yang Wendong greeted them politely with a handshake. He respected even those who were big shots from later generations, even if they were still novices now.

Chris Curry said, "I've long admired Mr. Yang's name. To be honest, we had only heard of you before your people contacted us."

Yang Wendong asked in surprise, "Am I that famous?"

Chris Curry laughed and said, "Yes, you are the most successful self-made businessman in the Commonwealth, and you have also made successful investments in many countries around the world. When I was studying for my master's degree at Oxford University, my professor once talked about your entrepreneurial case. It's hard to imagine that you started from a small sticky mouse trap."

"It's an honor for me to be included in Oxford University's teaching case study," Yang Wendong said with a smile.
This is quite normal. Now his assets are spread all over the world, and he has many industries and many very successful investments in Europe and America. So it is impossible for him to be as low-key as he was ten years ago.
In today's society, even without the internet, if a company's assets are large enough, it can't be kept secret, and it's normal for it to become a teaching case in some universities.

In two years, the Forbes list will be released, and I wonder where I'll be ranked.

Chris Curry continued, "However, your fame in the UK really took off after you acquired Mini."

Yang Wendong nodded and said, "Well, let's talk about serious matters."

“Okay, let me first introduce you to the specifics of Acorn Company,” Chris Curry said.

Acorn is currently a small company. The two founders and others work in one office with three tables, a conference table, and a few other desks with electronic components on them, many of which Yang Wendong does not recognize.

What's even more impressive is that the chips they designed, just like Intel's, can actually power computers.

"How long have you been researching this chip?" Yang Wendong asked.

Chris replied, "It has been two years since our company was founded in 78 that we have successfully developed this chip. However, this chip still has many problems and needs to be improved."

This cannot be hidden from wealthy individuals of this caliber. After all, they have sold some of their chips, and while outsiders may not know the specific reasons for the problems reported, they certainly know there are issues.

"It's already quite impressive to succeed in two years. Intel started out just like you, taking it one step at a time," Yang Wendong praised. "Perhaps you will be the next Intel."

Being able to research chips already demonstrates considerable ability;

His R&D team in Hong Kong does not have this department. Many of his own products are just researching how to use Intel or other products' chips to design circuits.

Hong Kong teams couldn't get into chip manufacturing, and Yang Wendong never considered trying it himself. In that era, basically only the United States and Japan had the capability. There were a few companies in Europe, but they were all small, non-mainstream businesses. Even ARM was just a small-scale operation until the 21st century when it finally rose to prominence.

Chris replied, "Mr. Yang is joking. It's hard to catch up if you're just a step behind. Intel is more than a decade ahead of us now. They've become an industry giant, and their team is very strong. Plus, the chips from Japan are also very advanced."

We don't expect to achieve great results; having a small market share would be good enough.

"Haha, that makes sense." Yang Wendong nodded;
In fact, when many companies start up, they just want to make a little money or build a small business. Only a very few founders think about becoming number one in the world from the very beginning.

But the company grew too fast, faster than the founders had anticipated, and then it succeeded.

Chris asked, "Mr. Yang, I know you have a world-class electronics company in Hong Kong that specializes in games. I wonder if our chips could be supplied to your company?"

"Do you have your own chip manufacturing plant to supply us?" Yang Wendong asked curiously.

Chris shook his head and said, "No, we don't have that capability. Our chips are all manufactured by a chip foundry."

"You guys are quite capable," Yang Wendong said, somewhat surprised.
In this era, the electronics industry has some contract manufacturing, but it is mostly low-end assembly. Chip production is generally a game for large companies, and large companies usually have their own chip factories.
However, apart from a few, the others are all suffering heavy losses, and many companies overestimated their capabilities beforehand.

It wasn't until TSMC was established a few years later, specializing in contract manufacturing, that this business rule began to be gradually broken.

Chris said, "The wafer foundry industry in the UK is already overcapacity. The production in Japan is terrifying. It is said that the pass rate is much higher than ours and the US, and the labor costs are low. They can also work overtime like crazy. We can't compare."

"Yes, the Japanese are really pushing themselves too hard," Yang Wendong nodded.

Not to mention the UK, even the US and Intel couldn't withstand the fierce competition from their Japanese counterparts. Intel's profits were also declining, and as a shareholder, Yang Wendong was well aware of this.
However, he did not sell his shares. Instead, he continued to acquire them while Intel's stock price was low, because the US government would protect its domestic chip industry in a targeted manner in the future, and Intel would be the biggest beneficiary of this.

He then said, "If you want to supply us, I can consider it, but there are a few conditions."

Chris immediately became interested and said, "Mr. Yang, please go ahead."

Knowing earlier that Yang Wendong was coming to his place, he conducted more research on Yang Wendong's businesses, especially Glory Electronics, which was under Yang Wendong's control.

Through our American counterparts, I learned that Honor Electronics is one of the world's top video game companies, holding a dominant position in the arcade, home console, handheld, and even computer game sectors. While Honor may not be the strongest in terms of pure technology, it has a deep expertise in the gaming industry, producing many extremely popular games. Its strong copyright protection allows it to compete with top electronics companies in the United States and Japan.

Their game products sell in the tens of thousands. Let alone chips, even a plastic casing would be enough to make any company rich.

Yang Wendong said, "First of all, I hope to invest in your company. This is the premise of all cooperation. If you agree, we can continue to discuss the subsequent cooperation matters. If not, then forget it."

ARM has unlimited potential for the future, but not now. There are many companies of this type, in the US and Japan. If it couldn't be invested in by itself, there would be no need for it to go through all this trouble and specifically choose this one.

Chris wasn't surprised; he had guessed it. Otherwise, Yang Wendong, the big boss, wouldn't have come in person. So he said, "Investment is negotiable. How many shares do you need?"

"30%," Yang Wendong said, giving a figure.
He typically targets 20% for high-potential companies he invests in, but at the start of negotiations, he always asks for a little more, giving the other party a leverage point.

Chris thought for a moment and said, "That's negotiable, but we'd like to know what we'll get in return for our investment, besides the funds?"

"This is also something we need to discuss later," Yang Wendong said with a faint smile. "Your company doesn't actually have many assets right now, and its valuation won't be very high, but you need a lot of funds for development."
Therefore, in addition to the normal investment funds, I will also lend you a sum of money at a low interest rate for the development of the joint venture.

Chris was immediately intrigued after hearing this and asked, "Mr. Yang, are you willing to take this risk?"

“Every investment carries risk. I invested hundreds of millions of pounds in Mini, and I still faced risks. Relatively speaking, your company’s risks are much lower,” Yang Wendong said nonchalantly.

When it comes to the chip industry, Yang Wendong naturally hopes that ARM can achieve results as soon as possible. If it can rise to prominence earlier than before, it will be of strategic significance to Yang Wendong.
So in addition to investing, he would also borrow an extra sum of money. Anyway, for such a small business, borrowing a million dollars would be enough to develop for a period of time. And this amount of money was just a drop in the ocean for Yang Wendong.
Even a 1% chance that allows ARM to rise to prominence ahead of schedule would be worthwhile;

As for the risks, these people have a history of success, so the probability of them failing now is very low. In the worst-case scenario, if they fail and go bankrupt, I can just take them under my wing and have them design my products, which would be a win-win situation.

After listening, Chris nodded and said, "Then what about our cooperation?"

Yang Wendong said, "If we invest, some of the chips for my products can be designed and manufactured by you. However, for security reasons, they can only be used for home appliances or simple gaming devices at first."

It will be difficult for you to replace Intel's internal supply chain, because I don't dare to risk changing suppliers casually.

And most importantly, even if I invest in you, or even if I acquire 100% of your shares, future cooperation, your technology, quality, and pricing must all be based entirely on market rules. If you can't compete, then I can't give you any special treatment.

Even though the time traveler's game ideas are unparalleled, the product that carries those ideas is hardware. Once the hardware malfunctions, everything is over.

Chris quickly replied, "Of course, we are just seeking opportunities for cooperation, and the prerequisite is naturally the quality of our product itself."

“Okay.” Yang Wendong continued, “I have another requirement. If you want to build your own chip factory, I require you to build it in Hong Kong. The labor costs there are very low, and there is some infrastructure there. Some of the chips under my company, and even some of Intel’s chip processes, are produced in Hong Kong.”

Hong Kong's electronics industry has a long history of success. Many American companies have placed the chip fabrication process in Hong Kong because of the lower production costs. They have even considered gradually moving other processes to Hong Kong as well.
Unfortunately, the Hong Kong government did nothing about this. In other places, the government promotes this kind of capital-intensive industry, but the Hong Kong government did not care, so it was impossible to succeed in the end. In addition, the subsequent nationwide speculation in real estate led to the complete decline of the electronics industry.

With Yang Wendong around, he naturally wants to give it a try. Even if he fails in the future, it would be good to leave some behind in the New Territories of Hong Kong.

"Place it in Hong Kong?" Chris frowned slightly.

Yang Wendong said, "There are wafer fabrication plants in Hong Kong. Once you have completed your design, you can have them test it out there."

I previously told you to operate according to market principles, and you can do that now too. If the wafer foundries in Hong Kong can't compete with those in the UK or the US, then you have the right to decide what to do.

In this respect, Yang Wendong is quite fair;
Whether Hong Kong can retain its high-end manufacturing industry in the future depends on Yang Wendong's efforts, not on forcing the industry to stay. Forcing it to stay is not in line with market principles and will eventually lead to its collapse, at most a few years later, which is meaningless.
Besides, TSMC will be established in a few years, and I will have the opportunity to participate. If Hong Kong is not an option, then I will give it to Taiwan.

Upon hearing Yang Wendong's words, Chris naturally replied, "Okay, let's do everything according to market rules."

Yang Wendong then said, "Okay, Mr. Liu and the team from Hong Kong will be responsible for the specific valuation of your company, how many resources you need, and future cooperation. I look forward to good news of a successful cooperation."

After all, "ARM" is still a small company. He can just come and take a look. He won't participate in the specific negotiations. He doesn't understand the technical issues either, so he can leave them to his subordinates.

“We also hope to cooperate with your company,” Chris said happily.

Being able to cooperate with the largest electronics company in the Commonwealth is a huge advantage for a small company like theirs. As long as they maintain high quality, they will have no shortage of funds and orders for some time to come. This is the dream of countless companies.

“OK, I hope that in the future I will see a top British chip company,” Yang Wendong said with a smile.

He had the idea of ​​revitalizing the British electronics industry in his early years, but it was difficult for him to do so on his own.
However, if ARM can grow earlier, then with its own orders, it may be possible to achieve that goal.

Of course, the UK is still not a suitable place to build factories. Hong Kong is still the most suitable location. It would be good enough to have design capabilities. It would also be good to make full use of the UK's educational resources. In this era, the UK still has a lot of educational capacity and talent reserves, which is much stronger than Hong Kong.

If ARM succeeds, then his plan to cooperate with Thatcher will be realized, which will also help his political background.
Furthermore, with Britain achieving success in the chip industry, the US government is less likely to directly suppress it. The relationship between the UK and the US is still very good, which is more advantageous for Yang Wendong, a time traveler, than in the past when the US was the sole superpower.

PS: Please give me a monthly ticket
(End of this chapter)