Tech startup: I really do make mobile phones!

Chapter 186 Chrysanthemums Invest in Orange Science
In a rather unassuming meeting room at the chrysanthemum base in Longgang, Shenzhen, the atmosphere was unusually lively.

The launch event for the K3V2 mobile intelligent processing chip, the first large-scale commercial application of the Chrysanthemum Maritime Silk Road chip, is being held here.

The venue was a conference room, so it wasn't very large, but those present were all industry professionals and key media outlets.

Among the guests, a young figure wearing a black mask stood out somewhat, but the occasional glint in his eyes and the way he occasionally whispered to those around him revealed his unusual identity.

This young figure is Chen Mo, who was invited to attend the launch event for the Maritime Silk Road K3V2 chip.

When He Tingbo, CEO of Maritime Silk Road, introduced the important guests on stage, he specifically mentioned him.

"Today, we are also honored to have a special friend with us, Mr. Chen from Orange Technology, who has always been a staunch supporter and close partner of our Maritime Silk Road Chip team! Thank you, Mr. Chen, for taking time out of your busy schedule to visit and provide guidance!"

The camera instantly focused on Chen Mo, who had no choice but to stand up and nod slightly to the audience. His eyes, visible above his mask, seemed to hold a polite smile.

A slight commotion and the clicking of camera shutters arose in the media area below the stage.

"Chen the Orange? He actually came in person?"

"What's so strange about that? Don't you know? Orange 1 used the Maritime Silk Road communication baseband. I heard that Orange 2's chip is a special version of the K3V2. Apparently, it prioritizes stability and power consumption by reducing some peak performance."

"So it's a deeply integrated partner, no wonder they came to endorse it!"

The whispers from the media were subtle, yet clearly reached Chen Mo's ears. He simply sat down again and continued to watch the press conference quietly.

The main character of the press conference was, of course, He Tingbo, the "chip queen" of chrysanthemum.

She stood confidently on the stage, with the PowerPoint presentation behind her displaying the theme: "Self-developed 'chip' breakthrough, intelligent connection for a new future."

On the screen, a short film was first shown depicting the arduous R&D process of the Maritime Silk Road chip, emphasizing Chrysanthemum's unwavering strategy of chip self-sufficiency.

接着，她重点发布了K3V2芯片的亮点：四核Cortex-A9架构、40nm制程工艺、GC4000 GPU的性能表现。

Through on-site demonstrations, it was compared with competing products such as the high-capacity MSM8260, highlighting its advantages in size control, energy efficiency, and especially in computing performance, a traditional strength of the Daisy series.

When it came to the terminal linkage stage, He Tingbo announced with a smile.

"We are very pleased that the first commercially available phone equipped with the specially optimized and tuned K3V2c chip has been successfully launched and has achieved an excellent market response. That phone is the Orange 2 from Orange Technology!"

The large screen displayed the chip benchmark data of the Orange 2 and a smooth multitasking demonstration scenario.

Finally, He Tingbo once again expressed his sincere gratitude to Chen Mo for attending and supporting him.

Chen Mo took the microphone from the staff and said a few words of congratulations on the successful launch of the K3V2 and wished it great success.

His tone was calm, without any arrogance; his speech was merely standard and conventional.

After the press conference, He Tingbo briefly responded to the media's questions about compatibility and mass production plans, then handed over the subsequent customer contact work to the marketing manager, and quickly walked towards Chen Mo.

Chen Mo's status today is vastly different from what it used to be.

Last year's domestic mobile phone shipment data showed that Orange ranked first among the "Four Major Small and High-Quality Manufacturers" with 680 million units shipped, demonstrating amazing growth potential.

Last year, after the first major battle among numerous smartphone manufacturers in China, four large manufacturers with sales exceeding 10 million units and four smaller manufacturers with sales exceeding 3 million units emerged, jokingly referred to by outsiders as the "Big Four" and "Little Four".

The four major manufacturers: Huanju Zhongku
Fantasy 2200 million (30.5% sold to North America and Latin America)
Chrysanthemums: 2000 million (42.67% sold to Australia and Southeast Asia)

Zhongxing sold 1610 million units (54.21% sold to Europe, North America, and Latin America).
1200 million units of Kopac were sold (9.2% to Latin America).

Four small factories: Orange & Green Flower
680 million oranges (14.7% re-exported from the port city, destination unknown)
Nietzsche: 480 million units (no exports)

374 million green aircraft (17.4% sold to Southeast Asia and India)
Dovi 300 million units (no exports)

These data show that if Orange further expands its mobile phone product line, it might be able to catch up with the sales of major manufacturers.

More importantly, Chen Mo and General Manager Ren of Chrysanthemum were both selected as directors of the Flower Planting Entrepreneurs Club. Their industry status and influence required He Tingbo to pay them extremely high attention.

"Mr. Chen, thank you so much for coming in person!" He Tingbo warmly shook hands with Chen Mo.

"Mr. He, you're too kind. The release of the K3V2 is a major event in the industry, so of course I had to come and support it!" Chen Mo replied with a smile, as everyone wanted to flatter him.

When you need someone to do something for you, you naturally have to be sweet-talking.

After exchanging pleasantries, He Tingbo invited Chen Mo to his office.

After they were seated and tea was served, He Tingbo couldn't quite figure out the deeper meaning behind Chen Mo's personal visit, so he instinctively started by talking about industry trends, mentioning the 4G network construction that China was about to vigorously promote.

Chen Mo was somewhat curious and asked directly, "President He, what do you mean?"

He Tingbo adjusted his glasses, a sincere smile appearing on his capable face: "President Chen, Orange and Haisi are long-standing allies, so I won't beat around the bush."

"In addition to base stations, the Ministry of Information Industry will also invite the first batch of domestic smartphone manufacturers to jointly pilot 4G mobile phone solutions. At that time, I hope that Mr. Chen and Orange Technology can fully support the first 4G chip that we will launch soon!"

This is not surprising. With so many 4G base stations already built by operators, naturally, 4G phones are needed to sell 4G data.

Chen Mo was slightly surprised: "Is Orange on the first batch of 4G trial list?"

He Tingbo smiled, his tone resolute.

"Mr. Chen, you are too modest. Now, everyone recognizes Orange as the leader among the 'four small domestic smartphone manufacturers.' Its technical reputation and market performance are obvious to all. How could you be absent from the first batch of 4G phone trials?"

Chen Mo blinked, no longer pressing for the source of the information, but instead asked with concern.

"Does Chrysanthemum already have a mature 4G chip solution?"

He Tingbo's expression turned serious: "What I'm about to say, please keep confidential, Mr. Chen."

Chen Mo nodded solemnly: "President He, please speak. I understand the situation."

He Tingbo lowered his voice: "Our Maritime Silk Road has decided to discontinue the K series and has officially launched a brand new 4G chip series—the Kirln series!"

Upon hearing this familiar name, Chen Mo couldn't help but smile inwardly, but he remained outwardly composed.

"Mr. He, I trust your company's chip technology. Of course, the premise is that you don't pursue extreme computing performance. Stability and power consumption control are what we at Orange value most in the lower-tier market we are targeting."

Here's a little-known fact: Globally, there are only two 4G chip series that don't have to pay the 3.25% tax on the total price of the device!
One is Sanjing, which holds 9% of the basic 4G patents and has reached a cross-licensing agreement with Gaotong. Its 4G Exynas series chips are therefore exempt from Gaotong's tax.

Another one is Chrysanthemum, which holds 8% of the basic 4G patents and also has cross-licensing agreements with Gaotong, so its own Qilin series chips do not have to pay this 4G tax.

In fact, this is Gao Tong's "compromise-for-monopoly strategy": making concessions to Sanjing and Huawei in exchange for a direct monopoly on global 4G chip patents and standards, which in turn has become a Damocles' sword hanging over the heads of all terminal mobile phone manufacturers.

For example, for Pingguo's 4G A-series chips and Lianfa's 4G Helio series chips, as long as they are not from the Tiger or Qilin family, terminal manufacturers have to pay Gaotong 3.25% of the total selling price of the device.

what does this mean?
The high-barreled patent system not only fleeces chip manufacturers, but also means that after chip manufacturers pay patent fees first, end-user manufacturers are also squeezed out again.

To put it more directly, in the future, almost 80% of 4G mobile phones will have to pay Gaotong a patent fee of 3.25% of the selling price.

For Chen Mo's Orange Phone, this is even more crucial: in order to maintain the company's high-speed compound growth, Orange's basic profit margin has always been controlled at around 13%.

If the high-barreled box takes away 3.25%, it's equivalent to directly eating away nearly a quarter of the profits, which will definitely slow down Orange Technology's development pace.

Chen Mo believes that for Orange to maintain its rapid compound growth, a 13% base profit margin is crucial and must not be allowed to be eaten up by a quarter of the high barrel tax.

Therefore, he expressed his opinion almost without hesitation.

"President He, if Orange can indeed be selected as one of the first batch of 4G mobile phone trial manufacturers, I hereby promise that Orange mobile phones will fully support the Qilin chip solution of Haisi!"

To make a clear comparison of the chips from these three manufacturers with 4G patents, a simple rating system can suffice:

The most outstanding in terms of overall performance is undoubtedly the Gaotong Xiaolong series SOC chip: 80 points for computing performance, 80 points for image processing, and 50 points for market adaptability, for a total score of 210 points, making it a true industry benchmark.

The second-ranked chip is the TriStar Tiger series SOC chip: its computing performance scores 60 points, but its image processing score soars to 90 points. However, its market compatibility score is only 40 points, for a total score of 190 points.

Finally, there's the Qilin series SOC chip from Chrysanthemum: it scored 90 points in computing performance, 60 points in image processing, and 30 points in market adaptability, for a total score of 180.

It's easy to see that the early 4G chip market was very distinct: the high-end JF-17 dominated the mid-to-high-end market with its comprehensive performance advantages, the mid-range market relied on top-notch image processing, and the lower-end market focused on its superior computing performance.

From the very beginning, Chen Mo set the target market for Orange Phone as the market for lower-tier cities.

After all, small companies have limited resources and can only concentrate their efforts on one track.

In this way, the early Qilin 4G series chips from Chrysanthemum perfectly match the positioning of Orange.

Furthermore, Chen Mo didn't even want to pay the 50 cents patent fee for USB, and since Orange 2 was still using the ancestral miniB, he naturally didn't want Gaotong to take away 3.25% of the patent fee.

Therefore, while Orange may seem to have options, it actually doesn't. When developing the 4G Orange phone, the main chip supplier could only be the Qilin series chips that HaiSi had just started. At most, it was to prevent the risk of supply chain disruptions, using a small number of chips from Dianlian Fake or Gaotong as backups.

Paying the high barrel tax is out of the question; the only hope is that Hai Si will create a special edition of the pioneering work of the Qi Lin series for Orange.

In fact, Chen Mo's requirements for Hai Si were not high at all. He just wanted to reduce the chip's overly aggressive computing performance and prioritize chip stability.
These words struck a nerve with Hai Si, who had been trapped in a vicious cycle of needing to "prove herself."

Because they felt their technology was lagging behind, they deliberately pursued aggressive performance in chip design to catch up with competitors, resulting in the creation of many "fire dragons" (a metaphor for high performance), which were then questioned for being "even more backward" due to stability issues, leading to a vicious cycle of becoming more and more passive the more they tried to catch up.

Chen Mo's needs, however, avoided this misconception: Orange phones focus on the lower-tier market, and users value stability for daily use more than extreme performance parameters.

Therefore, for the 4G Qilin chip specially supplied to Orange phones, he was willing to sacrifice some of the aggressive computing performance in exchange for reliable stability.

This aligns with Orange's product positioning and helps Maritime Silk Road avoid past R&D pitfalls.

That's why, when Chen Mo agreed to He Tingbo's request on the spot, he also made some demands.

"As long as Orange can be selected as one of the first batch of 4G mobile phone trial manufacturers in China, we will definitely fully support HaiSi's Qilin chip solution. We hope that President He can reduce your overly aggressive computing performance and prioritize the stability of our Orange chip!"

Ultimately, it's just about creating a chip-specific version for Orange. With their previous experience developing the K3V2c, the Maritime Silk Road team is already quite adept at this kind of customized adaptation.

He Tingbo immediately and readily agreed, his tone full of certainty.

"Please rest assured, Mr. Chen! We will make specific adaptations to meet the needs of Orange phones and ensure that they meet your requirements for stability!"

Having resolved a major concern, He Tingbo was in high spirits and then directly inquired about Chen Mo's purpose in coming.

Chen Mo smiled and explained his purpose.

Orange Technology, one of his precision manufacturing subsidiaries, needs to develop industrial CNC software and hopes to obtain a permanent license and source code for the IDME industrial CNC engine from Daisy Digital Labs.

Upon hearing that it involved collaboration between companies across the Chrysanthemum Group and the licensing of the core engine, He Tingbo immediately looked troubled.

The Chrysanthemum Group is a large corporation. Although General Manager Ren and General Manager Xu coordinate among the subsidiaries to prevent internal strife, there are still many disagreements and barriers.

However, she remembered that Director Hou, the head of the digital laboratory, had worked with her a few days ago on the technical demonstration of the 4G Qilin chip, so they were quite familiar with each other. Therefore, she agreed to help make the connection.

With He Tingbo's coordination and accompaniment, Chen Mo passed through several strict visitor security checks and entered a seemingly simple but heavily guarded research building complex within the Chrysanthemum Base—the location of the Digital Laboratory.

He Tingbo explained that the digital laboratory led by Director Hou has become the core hub for Chrysanthemum's technological innovation. President Ren has approved its integration with all research institutions and its upgrade to the "Chrysanthemum Central Research Institute".

Looking at these unassuming buildings, Chen Mo sighed, "In the future, Orange must also establish its own headquarters research institute!"

He Tingbo also remarked, "President Chen has lofty ambitions, and with your abilities, it shouldn't be difficult for you to achieve them."

"To be honest, if you hadn't come looking for me today, I would never have imagined that Orange Technology, a precision manufacturing plant, was hidden in this mountain city!"

Chen Mo smiled modestly and didn't say much, for saying too much would only lead to mistakes.

Thanks to He Tingbo's personal introduction, Director Hou, the head of the Digital Lab, personally came out to greet them.

This tech guru, a graduate of a top university, has always been straightforward. When Chen Mo politely remarked, "What a coincidence! You have a junior from the same university who works in our company doing internet business!", he showed no interest in responding. His face even revealed a hint of impatience, clearly indicating that he was more interested in the main topic than such pleasantries.

Upon realizing this, Chen Mo immediately got straight to the point, explaining his request for IDME engine license and source code.

Director Hou frowned immediately: "President Chen, this is no ordinary cooperation. You're trying to take away the very foundation of our core technology!"

Chen Mo nodded earnestly: "We can discuss any conditions!"

The matter was of great importance, so Director Hou dared not act on his own initiative and reported the situation directly to Xu Zhijun, the rotating chairman of the board, who was also his former boss, the second-in-command of Juhua, and the deputy of President Ren.

To draw a parallel, Gong Yun, whose position is roughly equivalent to Cheng Zi's, is currently the de facto second-in-command. When Chen Mo is not in the company, she is the one in charge.

Accompanied by the two men, Chen Mo then made his way to Xu Zhijun's office.

To his surprise, upon entering, he not only saw Xu Zhijun, but also Mr. Ren, the founder of Chrysanthemum, who was sitting on the sofa talking to Xu Zhijun!
When President Ren saw Chen Mo, he laughed loudly, "President Chen! I was wondering why I ran into you here at Zhijun. I was about to leave after finishing my business, but when I heard you were coming, I stayed behind to wait for you."

"I heard you own a precision manufacturing company and are thinking of taking over the 'golden goose' from Xiao Hou's lab, whole nest of eggs. Could you tell me, this old man, what big plan you're up to?"

Chen Mo glanced silently at the other people in the office.

Mr. Ren was a man of great stature, and he immediately understood.

"If it's inconvenient, then Mr. Chen, please don't say anything!"

Chen Mo smiled and said, "It's convenient. There's nothing inconvenient about being in front of President Ren!"

He then gave a brief overview of Orange Technology, highlighting its alignment subsystem developed based on the self-developed high-precision MYT-3.0 gyroscope, which has successfully secured supplier qualification and orders for ASML's next-generation EUV lithography machine.

"Asma!"

The office fell silent for a moment after the name was uttered.

Xu Zhijun, He Tingbo, and even Director Hou all showed obvious surprise on their faces.

They knew all too well what this meant; it was the crown jewel of the global semiconductor equipment industry, and being able to enter its supply chain was the strongest proof of Orange Technology's technological strength!

Mr. Ren listened with deep emotion, patting the armrest of the sofa.

"Incredible! Mr. Chen, you're amazing! At your age, I've just graduated and am preparing to go to the army for training. I never imagined you would achieve so many groundbreaking results!"

Chen Mo humbly stated that he was simply lucky to have stood on the shoulders of giants and predecessors, and mentioned his experience of consulting Professor Xu, an ant expert, on bionic models in Xishuangbanna, Yunnan Province.

After listening, President Ren agreed wholeheartedly, speaking in a solemn tone.

"Basic scientific research is the foundation of all cutting-edge technologies! The reason why our Chrysanthemum has made so many technological breakthroughs is because of the foundation built up little by little through basic research."

“That’s absolutely right!” Chen Mo chimed in, his tone full of sincerity: “Just take Chrysanthemum’s team of mathematicians for example, they are absolutely unparalleled among private enterprises in China. Their investment in basic sciences is truly admirable.”

These compliments clearly struck a chord with Mr. Ren, who immediately burst into laughter, his face beaming with satisfaction.

"If someone else were to flatter this old man, I would have to be careful, but I'm truly happy that a young talent like you, Mr. Chen, who has achieved real results, is praising us!"

After laughing, Mr. Ren said to Xu Zhijun and Director Hou, "We technical people all know how difficult and valuable it is for Orange Technology to enter Asmark!"

"If you can lend a hand, then do so, Zhijun. You can discuss the specifics with General Manager Chen!"

After saying that, Mr. Ren got up and left.

Next, Chen Mo and Xu Zhijun held closed-door negotiations.

The two sides engaged in heated discussions regarding the pricing and licensing of the IDME engine.

Negotiations have reached a stalemate: the US side has consistently regarded the IDME engine as a core asset and is unwilling to concede easily.

Chen Mo, however, insists that this engine can unleash greater potential value in the future development of Orange Technology.

"President Xu!" Chen Mo leaned forward, his tone earnest yet sharp: "Think about it, with just a software engine, without a top-tier hardware ecosystem, this technology will at best only circulate within a small area of ​​China!"

"You need to take a long-term view and partner with Orange Science to truly unlock its value!"

"President Chen!" Xu Zhijun remained unmoved, his tone calm yet tinged with a hint of mockery: "Don't try to make empty promises to me. I've been in the business world for so many years, I know my limits, I'm not buying it."

When the two sides were deadlocked, Chen Mo suddenly changed the subject and proposed a compromise.

"Well then, Mr. Xu, since we both recognize Orange Technology's potential and are optimistic about the future of the IDME engine in the industrial field, why insist on a one-time licensing deal?"

Let's try a different approach.
Chrysanthemum is offering to license its IDME engine technology to Orange Technology as a stake. What do you think?

Xu Zhijun naturally knew what it meant to be a technology company recognized by ASMI. After a fierce evaluation and negotiation, the two parties finally reached an agreement.

Chrysanthemum contributed the permanent license and source code of the IDME industrial CNC engine as capital to Orange Technology, acquiring a 3% stake in Orange Technology.

This result left Chen Mo with mixed feelings as he walked out of the chrysanthemum base.

Yuancheng has attracted investment from Lei Jun, and now Orange Technology has also received technology investment from Chrysanthemum.

This situation, which arose by chance, has a touch of dark humor to it.

At that time, both companies can claim that they jointly developed the technology product with Orange.
Regardless, Chen Mo accomplished two things on this trip: first, he learned that Orange Technology had been selected as a 4G trial operator and finalized the cooperation on the Maritime Silk Road 4G Qilin chip; second, he resolved the issue of Orange Technology's industrial software engine.

(End of this chapter)