Rebirth Tokyo 1986

Chapter 435 Increase Firepower
"By the way, Scarizan, how far along is your handheld computer project? Is the CPU development going smoothly?"

After finishing their business, Masato Takeshita suddenly remembered Scully's current main project and wanted to learn more about it.

"The project is currently in the early design stage. As for CPU development, we plan to manufacture it ourselves by purchasing design solutions from ARM."

If asked what Sculley's greatest contribution to Apple was,
That must be an investment in ARM.

This investment of only a few million dollars yielded a very high return, generating a profit of over a billion dollars when it was sold. Ultimately, it provided Jobs with invaluable financial support for his second stint at Apple.

"ARM?"

The young man was naturally familiar with the chip design company that would later monopolize the mobile phone microprocessor chip market.

But he was worried that the same thing would happen to Huawei, so he asked again.

"Can we come up with our own design proposal?"

"Yes, but it will take some time."

Scully, who knew this area well, immediately gave an affirmative response.

"I see. That generation still used ARM, and we started doing chip design work independently from the second generation onwards."

Although ARM has not yet achieved the monopoly it will later achieve, it has become the strongest dominant force in the field of reduced instruction set architecture CPUs.

It will take Xinghai Group at least several years to catch up.

It's better to use other people's technology for the first generation and develop your own for the second generation.

"Yes, understand."

Scully immediately relaxed; it seemed there was no need to change the original design plan.

After discussing a series of matters at Xinghai Technology headquarters, Takeshita Masato looked up at the two and asked.

"How about we go check out Starry Sky Crystal?"

"Great, it's been a while since I've been there."

"Me too."

Since both of them agreed, the young man didn't hesitate and headed straight to the new headquarters of Starsea Wafer, the eighth wafer fab located in Koto Ward, Tokyo.

This is the headquarters of Xinghai Wafer, and also the most advanced 8-inch process wafer fab under the Xinghai Group, with an investment of up to US$15.8 billion.

"Koike-san, please tell me about the difficulties that First Wafer faces in starting from scratch in the foundry field."

After the spin-off of Xinghai Wafer, Atsuyoshi Koike was mainly responsible for internal production, while external contract manufacturing was transferred to the second wafer fab managed by Rujing Zhang.

However, the division of labor does not mean that Xinghai First Wafer Fab will withdraw from the foundry business. On the contrary, First Wafer Fab will strengthen this part of the business.

Masato Takeshita's goal was to create a situation where the first and second wafer fabs, while maintaining their respective advantages, would compete fiercely with each other.

First-tier foundries can compete with second-tier foundries for foundry services, and second-tier foundries can compete with first-tier foundries for chip production.

Only through mutual competition and stimulation can we maintain our leading position and avoid falling behind.

He doesn't want his wafer fabs to fall behind giants like Intel and Samsung in the competition from TSMC.

"Thank you, Chairman, but it's not necessary at the moment. First Fab has already signed three foundry contracts worth tens of millions of dollars."

Atsuyoshi Koike's connections are truly impressive; in a very short time, he helped First Fab secure new contracts from European manufacturing giants such as Siemens.

"Beautiful, as expected of Koike-san."

Masato Takeshita quickly glanced at the copy of the contract provided by Atsuyoshi Koike and was pleased that the company had such a talented person.

“Great idea. It’s not easy for us to secure manufacturing contracts with American companies, so Western Europe is definitely a better opportunity.”

The US tech industry is suppressing the development of Japanese semiconductors by supporting Taiwanese and South Korean companies such as TSMC and Samsung. Western Europe, which is also being suppressed by the US, is indeed a good place for its own industries to enter.

Putting everything else aside, at least there's a sense of shared suffering.

"No, it's just that European companies are easier to talk to."

The 1990s were the wealthiest time in Western Europe.

The US and Japan combined are not as wealthy as old Europe. Unlike later periods, when the Eurozone shrank to a point where it is less wealthy than China and has been far surpassed by the US.

Why can Trump arbitrarily impose tariffs on the EU? Isn't it because the Western European market is gone and they need to rely on the US for development?

With everything going smoothly at the first wafer fab, Masato Takeshita then led everyone to the second wafer fab.

This newly spun-out company is also headquartered in Tokyo, right next to First Wafer Company in Edogawa Ward.

"How's everything going in the US?"

Zhang Rujing comes from Texas Instruments and is a devout Christian, so she has a certain influence in the American science and technology and religious circles.

In his previous life, he was able to overcome numerous difficulties to establish SMIC in China, which was partly due to the influence of religious resources.

He naturally wouldn't forget these connections, so after gaining control of Xinghai's second wafer fab, he immediately went to the United States, hoping to attract more contract manufacturing business.

"It's alright, but it's mainly thanks to the group. The orders I secured this time came primarily from companies like Cisco, IBM, and Nvidia, which have close ties with us."

Xinghai Group holds a number of shares in both Cisco and IBM, and the current presidents of both companies also serve as presidents of Xinghai Technology.

When the price is right, cooperation naturally goes very smoothly.

The reason is quite simple.

Both Gerstner and Chambers have investments in Starsea Capital, which is also the most profitable employee-only fund.

As for smaller giants like Nvidia, Xinghai Capital has also invested heavily in them.

When Zhang Rujing found them, everything went smoothly.

Of course, Zhang Rujing also brought in companies on her own.

For example, Texas Instruments, although it owns many wafer fabs, also outsources some of its troublesome and low-profit chips to Zhang Rujing for manufacturing.

"No, there's no need to be modest. Securing these orders is a skill in itself."

Masato Takeshita was very happy because he had truly seen the benefits of splitting things up.

Before its spin-off, Xinghai Wafer mainly focused on its own business and paid little attention to outsourced manufacturing, only accepting the most profitable small portion of the business.

After the split, the second wafer was no longer limited to the most lucrative part, but began to try to take on as much business as possible.

At the same time, stimulated by this, the first wafer fab also made efforts to enter the European wafer market.

This series of actions, even if it can't suppress TSMC's rise, can at least slow down its development.

The wafer foundry market is only so big. If Starsea Semiconductor takes a bigger slice, TSMC and other companies will take a much smaller slice.

"How's the joint venture to establish a wafer fab going?"

"It's going very smoothly too. Companies like AMD and GlobalFoundries have already signed contracts with us, and funds are arriving in our account one after another."

"That's right, if you want more orders, you have to learn to share the profits."

Partnering with mid-sized tech giants to build wafer fabs is the best way to ensure stable foundry services.

However, this method was only useful in the 1990s. In the 21st century, OEM (Original Equipment Manufacturer) became the key.

Thinking of this, Takeshita Masato spoke directly to the two of them.

"Mr. Koike, Mr. Zhang, while wafer foundry business is developing, we can't lag behind in process technology. IBM is working on tackling the copper process technology for chips, and we can't miss out on that either."

"Our lab in the US needs to approve this project immediately." Copper manufacturing process is TSMC's key weapon in leaving its domestic competitors behind.

Without this technology, TSMC might still be entangled with UMC in the future.

"Yes, President!"

The two responded in unison, deciding to take the matter seriously.

However, the two had no intention of collaborating; instead, they planned to form their own project team.

This is also what Masato Takeshita wanted to see.

Regardless of who produces the copper craftsmanship, Xinghai Group will profit.

Of course, in order to encourage competition, young people did not have the idea of ​​sharing technology.

It will only be shared internally once companies like Intel and Samsung have this technology. Furthermore, the shared technology won't be the most advanced, but rather one to two generations behind.

If we want to surpass others, then we need to find new talent and work hard on research and development.

As for a scenario of backing down, that's impossible. Few people are willing to relinquish their power, especially those in high positions.

This is human nature.

But it is precisely because of this that those who choose to let go are remembered for eternity.

For example, the famous Prime Minister Zhuge Liang is the most typical example, and he has been praised by later generations.

Even enemies, namely the emperors of the Wei and Jin dynasties, were praised and made into role models.

While Masato Takeshita calmly inspected the group's various subsidiaries, Kalinsky was working himself to the bone.

Strategically despise your opponent, but tactically take them seriously.

Although there is a huge gap between Sega and Starsea Group, if they become arrogant, they may still suffer a setback.

What's the situation at Sega lately?

"It's the same old story, they keep attacking us because we don't have a mainframe."

The way to defeat the opponent is naturally to use our strengths to target their weaknesses.

Hayao Nakayama, the president of Sega, repeatedly visited Makoto Ayamizu and his son, Kōji Ayamizu, with a very humble attitude.

"Only someone like Makoto Yamashina, who still has some scholarly spirit, would be tempted by such clumsy methods. The old fox, Naoharu Yamashina, wouldn't care at all."

“Yamashina Naoharu is already so old, he is more concerned about the family business than the company’s development now.”

The management of Bandai and Sega are completely different styles.

Sega's managers, whether it was Hayao Nakayama or Isao Okawa, were people who were willing to give up everything for the company's development.

Because in their view, the money they earn through the company should ideally return to the company.

Isao Okawa is a prime example; he donated his fortune of over a billion dollars to Sega, a company he loved.

Bandai prioritized family, so even though Yamashina Naoharu knew his son was unwilling to engage in business, he still wanted him to inherit the business he had started.

Hayao Nakayama persuaded Bandai to accept the merger from Sega's perspective. Makoto Yamashina, who disliked doing business, was naturally willing to give up his family legacy for the company's development, but Naoharu Yamashina was not.

"Yes, shall we visit President Makoto Yamashina again today?"

"Of course, we should take former president Naoharu Yamashina's opinion seriously, but we should not ignore the role of the current president."

While Yamashina Makoto's opinion was not as important as Yamashina Naoharu's, Yamashina Makoto had been operating within Bandai for many years and had also amassed considerable influence.

He needs his father's approval to succeed, but making things worse is very simple. After all, he's young, and sooner or later he'll take over all of Bandai's power.

"Yes, President."

Sega went to Bandai in the morning, so Kalinsky chose to go in the afternoon.

He didn't want to get too entangled with his former employer and preferred to develop their own careers.

"President Yamashina, I don't think Sega can offer us the same terms. They've already fallen behind Sony in the competition, so even having a console division won't make much difference."

"Besides, we can develop in the gaming hardware field whenever we want."

"You know, we have Yokoi Gunpei-san here."

Since Shan Kecheng was eyeing gaming hardware, Kalinsky naturally wanted to cater to his tastes.

Starsea Entertainment currently doesn't produce game consoles or handhelds, but that doesn't mean it never will. Once it reaches a certain stage of development, it will naturally expand into the gaming hardware market.

"I see, as expected of Xinghai Entertainment."

A hint of envy flashed in Makoto Yamashina's eyes, because Starsea Entertainment and its parent company were incredibly wealthy. Unlike Bandai, whose failed collaboration with Apple had already crippled them.

But it was this failure, and the previous ones, that made him realize that the console gaming industry wasn't so easy to enter.

Yamashino quickly changed his tone, "But I think the console industry is not so easy to develop."

"Even major manufacturers like NEC failed, only Sony succeeded."

Kalinsky didn't care about Yamashina Makoto's skepticism and calmly explained with a smile.

"It's normal for companies like NEC to fail; they don't have enough games to support them. After all, the most important thing for a game console is always the game content."

"But Xinghai Entertainment is different. We have many popular games in our portfolio, and our development team is one of the best in Japan."

"Once we launch the console, there will be no shortage of game support."

At this point, Kalinsky took a sip of coffee to moisten his throat.

"Besides, we have money. Even if we fail once, we won't fail every time."

"Our president said that if we enter the game console industry in the future, we will invest heavily in developing the best game console and then sell it at a loss."

"Making money is not important; what's important is market share."

In its previous life, Microsoft entered the gaming market by simply spending money. They poured billions of dollars into it without a second thought.

If the home entertainment concept hadn't failed and been replaced by mobile phones, Microsoft would have definitely poured more money into completely surpassing Sony and Nintendo.

"Well, that would definitely work."

Yamashino was a little confused, not expecting Xinghai Entertainment to be so determined.

Selling products at a loss is a way to gain market share, which is very much in line with the style of Japanese semiconductor companies.

Yes, Japan is very adept at spending money to increase market share.

The US memory chip industry was destroyed by Japan in this way.

But the nature of human beings is that they don't remember the lessons of history.

The Japanese semiconductor memory chip giant that brought down the United States was ultimately defeated by a South Korean semiconductor giant that used the same tactics.

Of course, South Korea will not be the ultimate winner either.

Chinese chip companies, with more money and cheaper wages in the future, are constantly challenging South Korean memory chip giants.

It's estimated that it won't be long before South Korea suffers the same fate as Japan in the field of memory chips.

There's no way around it; Chinese memory chip companies' products will become increasingly cheap, and even giants like Samsung won't be able to reach that price point even if they don't make a profit.

(End of this chapter)