Those Years When I Was Forced to Top the Forbes List

Chapter 243 Forcing a Battle!

Monday, October 5.

Zhangjiang, Shanghai.

Here, high-rise buildings stand tall, and many corporate headquarters are housed within the limited land area.

Semiconductors, microelectronics, biomedicine, multinational technology companies
By 2006, Zhangjiang High-Tech Park had become a mature high-tech zone, expanding from its initial 22.13 square kilometers to 42.11 square kilometers, and achieving an average industrial output value of 77 billion yuan per square kilometer.

Such a huge output value cannot be achieved by a small plot of land in Zhangjiang.

Their headquarters are here, but most of their factories are in Kunshan.

Shanghai, relying on Kunshan on the border of Jiangsu and Shanghai, established factories that siphoned off Suzhou. Suzhou voluntarily provided supporting services for Shanghai and also attracted many Shanghai enterprises and factories to settle in, creating an integrated Shanghai-Suzhou pattern and forming a "mini Shanghai" pattern. This siphoned off neighboring Nanjing and Hangzhou, causing Nanjing to become the embarrassing situation of a weak provincial capital in Jiangsu. It can only make up for itself by developing towards Hefei through Ma'anshan.

The complex flow of talent is impacting the development of the entire Yangtze River Delta region.

Inside Zhangjiang High-Tech Park, a square building about 20 meters high stands by the roadside with the signs for "Spreadtrum Communications" and "SPREADTRUM".

The building's exterior is beautiful and new, and the surrounding green environment is quite nice.

At noon, when Chen Xuebing and his group arrived by taxi, Chen Datong and a group of company executives greeted them at the entrance.

Two taxis, four people, got out and shook hands one after another.

"Mr. Chen! You should have asked us to send a car to pick you up!" Chen Datong said politely, shaking Chen Xuebing's hand.

"No need, no need, I arrived this morning and am waiting for them at the airport from Chongqing! Why bother picking them up? Everyone's waiting too long."

Chen Xuebing was not polite at all. After shaking hands with Wu Ping, who had short hair and dark skin, he turned to introduce his three subordinates.

"Zou Jiasheng, Vice President of Singularity Technology! He's also an alumnus of both of your schools!"

"Miki Goto! Our group's Vice President of Finance!"

"Rong Xianwen, our group's vice president!"

"Both of them came from PwC, so they are quite familiar with finance, accounting, and legal work. They have worked in Hong Kong for a long time and are also quite knowledgeable about international affairs!"

Actually, all three of them were somewhat unfamiliar to him.

Zou Jiasheng was one of the ten people Lu Weibing brought with him. He was recently promoted to vice president of Qidian and is a Tsinghua University graduate.

Rong Xianwen and Goto Miki are Cai Zhijian's team.

Who becomes the president of Spreadtrum is not important, but participating in the management of Spreadtrum is also an opportunity for training and development.

Chen Xuebing originally intended for Zou Jiasheng to stay at Spreadtrum for an extended period, which would facilitate communication with Singularity Technology. Zou Jiasheng, Chen Datong, and Wu Ping were alumni and the most suitable candidate to become the president of Spreadtrum.

However, Singularity's current scale is not as large as Spreadtrum's. If Singularity's vice president is appointed as president, many people will definitely be dissatisfied. To show that he values ​​Singularity, Chen Xuebing gave Rong Xianwen and Goto Miki a temporary group position, with Rong Xianwen serving as the nominal president and assisting Zou Jiasheng in his work together with Goto Miki.

Judging from their abilities, they can be considered as promoting talented individuals.

After Chen Xuebing finished his introduction, he suggested going upstairs for a meeting.

The concise and straightforward style put some pressure on the management team.

The air conditioning in the conference room was blowing gently. One side of the long table was filled with executives from Spreadtrum. Wu Ping sat in the main seat, while Chen Xuebing and three others sat on the other side, seemingly preparing for negotiations.

Wu Ping didn't say much from downstairs to upstairs, his smile was a bit formulaic, and he silently expressed a hesitant attitude.

Chen Xuebing had no choice but to take the initiative and reiterate his position to Spreadtrum's management:
"Chairman Wu, let me get straight to the point. Spreadtrum's technology is beyond doubt, but there is still room for improvement in market strategy and capital operation. Our goal in joining us is to help Spreadtrum open up the market more quickly, and to achieve chip sales of more than 100 million by 2008."

These words sparked a murmur in the conference room.

"Mr. Chen, how big is the market?"

“That’s right! MediaTek’s MT6225 Turnkey solution has already driven the price down to $13 per unit. Even if we break through the RF technology bottleneck, the cost can’t be lower than $12. The market is only so big. How can we compete and sell so many?”

"Huaqiangbei's mobile phone market is only worth tens of millions a year, right? Most of the chips are still imported junk!"

Three days ago, Chen Datong brought back Chen Xuebing's "10 billion declaration". He took a trip to Huaqiangbei in Shenzhen and spent some time getting to know Chen Xuebing. He had a lot of confidence in Chen Xuebing, but the management of Spreadtrum had many questions in their minds.

After listening to their venting for a while, Chen Xuebing crossed his arms and laughed, "Huaqiangbei is changing all the time. The data you have doesn't represent the truth. However, from what I hear, you're all planning to keep an eye on Huaqiangbei and focus on 2G? What about 3G chips?"

Wu Ping finally heard what he wanted to hear and asked, "President Chen, what are your plans for the 3G market?"

2G is not what he desires; that's what the shareholders want to hear. From the moment he returned to China, he devoted himself to researching 3G, which is the future.

But that future never came.

They returned to China in 2001 and established a company. At first, they were worried that the market would come too early and they would not be able to keep up, so they worked hard on research and development. Finally, in 2004, they developed the world's first TD-SCDMA/GSM dual-mode baseband single chip SC8800A and breathed a sigh of relief.

But the market didn't come.

After waiting for a year, they had no choice but to turn their attention to the 2.5G market and develop the SC6800D, a GSM/GPRS multimedia integrated mobile phone chip, to save the company.

At that time, the market was already dominated by MediaTek, and only some manufacturers that couldn't get a spot on MediaTek's production line came to them.

In April of this year, the SC8800A baseband chip for TD-SCDMA/GSM/GPRS was also developed. They are full of confidence that as soon as 3G comes, their chip will be fully compatible with 3/2.5/2.

However, the market is still far from ready, and the most important part of the chip, 3G, has not yet shown its power.

Chen Xuebing looked at Wu Ping with a bright gaze and felt a sense of emotion.

When he made a fortune stockpiling MediaTek devices in Huaqiangbei in the first half of last year, he also thought about Spreadtrum, but at that time Spreadtrum did not have an integrated chip. By the end of last year, when he heard that Spreadtrum had launched an integrated chip, he had already stopped paying attention to the piracy business.

Looking back now, having to team up with Spreadtrum to fight against MediaTek, the company he once helped, it's just a case of karma coming full circle.

However, competing with MediaTek is merely a tactic for Spreadtrum to make money.

The right approach is to leverage this profit to expand Spreadtrum's scale and expand into the 3G market.

Mobile 3GTD has invested 2000 billion.

If Spreadtrum can secure a project contractor position, it will truly soar to new heights.

He could even use this to cultivate a Huawei!
"I've already discussed the plan with Professor Chen. We'll start by acquiring one million 3G users to let the Ministry of Information Industry and the operators see this market. If that's not enough, we'll go for two or three million."

“We don’t have that much money for subsidies,” Wu Ping said succinctly.

Without wasting any words, Chen Xuebing took a document out of his briefcase and pushed it in front of Wu Ping.

National Medium- and Long-Term Science and Technology Development Plan Outline (2006-2020)

"You know about the document issued by the State Council at the beginning of this year, the 'Core Electronic Components, High-End General-Purpose Chips, and Basic Software'?"

"Core Electronic Devices, High-End General-Purpose Chips and Basic Software Products" is an abbreviation for core electronic devices, high-end general-purpose chips and basic software products. It is one of the 16 major science and technology projects in the guidance document issued this year.

Most people know about this thing, and Wu Ping didn't look at it closely before placing it on the table.

He had already understood what Chen Xuebing meant.

Chen Xuebing is asking them to apply for technology research and development subsidies.

With an annual fiscal subsidy of 20 billion yuan, securing a subsidy project could indeed solve a significant problem.

But this is not suitable for Spreadtrum.

“Strictly speaking, we are a foreign company. This subsidy is intended to support domestic companies, and it’s not easy to apply for.”

Chen Xuebing frowned: "How do you know if you haven't tried? Are you a foreigner? Is Professor Chen a foreigner? As far as I know, you are all Chinese citizens, right? You've come all this way to serve your country, the country won't discriminate against you! Go and ask the Shanghai government to help you apply. If Shanghai is unwilling, I'll help you! There are plenty of local governments that will step in for you!"

He spoke in a reprimanding tone, lightly tapping the table, instantly exuding an aura of authority.

There was silence.

Chen Datong had a dry cough.

"Well... we've been paying attention to the 863 Program for a long time. We're also preparing for a US listing. If the listing is successful, the progress of our technology will have to be made public, which may not be in line with the confidentiality requirements of national support projects. This could lead to significant problems during the listing application review."

Chen Xuebing chuckled.

Since he brought this up, he must have been prepared.

"The 863 Program is mainly funded by the national treasury and requires equity ownership, which will definitely affect overseas listings. The Core High-Tech Basic Research Program is just a special subsidy. The reason is very clear: it is to generate research investment to open up the market for TD. In the end, the money will also be used to subsidize the market and spend on projects. What's wrong with taking it? If the US stock market can't accept it, then the US can accept it if your research on TD is also a technology dominated by China?"

"As for the review by the Chinese side..."

Chen Xuebing took out another document and placed it on the table.

This time, Chen Datong took it and looked at it.

As he looked, his brows furrowed.

"VIE structure?"

Chen Datong's voice carried a rhetorical question, while most of the management around him looked bewildered.

Even Chairman Wu Ping didn't know what a VIE was.

Chen Datong knew this because he had heard about something during his recent trips to the United States.

"Anran's VIE?"

"Yes, it's Anran." Chen Xuebing smiled with relief.

It's quite a joke that a company full of Americans wouldn't know about VIEs.

However, Americans don't necessarily need to know.

This thing works better in China.

"VIE structure, or contractual control, allows one company to obtain all the revenue of another company through a contract, thereby consolidating the financial statements."

"One of these companies can also be located overseas."

"Therefore, Cayman companies can consolidate the financial data of domestic entities without having to hold shares in them."

"Spreadtrum can establish a separate patent company, which can be transferred from the existing Spreadtrum shareholder structure. This patent company can consolidate its financial statements with the overseas holding company through a VIE structure, thus avoiding the need to disclose patent progress to the United States."

“This way, you can solve the problem of disclosing technical information, and even bypass China’s overseas listing review. In 2000, China had restrictions on overseas investment in the Internet sector. Sina bypassed the regulations and listed in the United States through this agreement,” Chen Xuebing explained.

Chen Datong was puzzled: "Now that Enron's scandal has been exposed, can this agreement still be used?"

“Enran? That oil company?” Wu Ping suddenly remembered something and asked.

Chen Datong nodded and then began to explain.

Enron was one of the largest energy companies in the United States, with annual revenue reaching hundreds of billions of US dollars in 2000.

It wouldn't be an exaggeration to call it China's PetroChina.

However, in 2001, it was exposed for financial fraud, controlling 3000 shell companies through a VIE structure to transfer debts and losses, and only returning the profits to the main company, thereby inflating profits.

US stocks don't have daily price limits; they only have a circuit breaker system for market indices. Once the incident happened, Enron didn't even have a chance to explain, and its stock price instantly collapsed, leading to bankruptcy.

This was big news in the United States, but the people at Spreadtrum had just returned to China in 2001. They were busy with work, the networks in China and the United States were not connected, and Spreadtrum was a company with a large American population. They probably hadn't thought about going public in some convoluted way before.

"It's been so many years, it shouldn't be usable anymore, right? The US is very quick to respond to legal amendments," Wu Ping asked.

Chen Xuebing laughed and said, "It is precisely because it has been repaired that it has become completely legal. In 03, the Financial Accounting Standards Board (FASB) of the United States issued a FIN46 bill, which clearly stipulates that VIE entities must consolidate financial statements to prevent companies from hiding risks through agreements. Therefore, VIE can now be used for listing, and there is a set of guidelines."

This system was approved not only by the United States, but also by China.

Previously, internet companies were somewhat hesitant to adopt this approach. Last year, regulators passed Order No. 10, which indirectly standardized the VIE structure setup process, essentially releasing a tacit approval.

After all, China's internet development desperately needs financing, and the domestic A-share market values ​​profit margins while the Hong Kong stock market also focuses on profit growth. Not allowing them to list on the US NASDAQ is forcing them to commit fraud.

After that, Chinese internet companies completely opened up, and in the following years they came up with all sorts of creative ways to use various protocols.

Its rise was due to General Ma, and its fall was also due to General Ma.

Alibaba's multi-layered VIE structure—Cayman Islands, British Virgin Islands, and Singapore—has become famous for its tax avoidance and risk penetration prevention, and everyone is starting to learn from it.

But ever since Alipay started using VIEs and engaging in asset securitization, regulators have begun to pay attention to the risks, urgently withdrawing their tacit approval and starting to openly formulate rules.

You're taking the people's money, how can you "prevent risks"?
However, now is the time to make good use of these rules.

"Let Shanghai help you contact the Ministry of Science and Technology. Apply for the necessary funding. Once the Ministry of Science and Technology approves the funding, we'll have a reason to approach the Ministry of Information Industry for a 3G testing project. The government has given us R&D funding, and we need to give an explanation for spending the money. Datang Telecom can't really say anything, right?"

Chen Xuebing unleashed his plan to kill two birds with one stone.

Chen Datong and Wu Ping also suddenly realized.

To push for the issuance of licenses, there must be several successful 3G tests to check all the functions and ensure that all the data are strong before initial approval can be obtained.

Datang's previous commercial testing had many problems: unstable signal, low call success rate, video call pixelation, etc. Almost every kind of problem occurred, and they were slowly resolved like squeezing toothpaste.

However, Datang holds most of the TD patents, and they have always been in charge of TD testing. Even Spreadtrum's protocol stack is authorized by Datang. Previously, they only provided chips to participate in testing. If they apply to conduct 3G testing on their own, it would be suspected of overstepping their authority.

The fact that Datang was dragging its feet on work was something that Chen Xuebing, Chen Datong, Wu Ping, and many other members of the management team generally agreed to, or at least believed, that Datang's R&D capabilities were insufficient.

3G testing must bypass them.

Once you've applied for R&D funding, you can then apply to lead another test, which would make your application perfectly legitimate.

Wu Ping frowned and said, "We don't have a core network or base stations, so who should we contact?"

Chen Xuebing smiled.

The answer is obvious, isn't it?

"Huawei, don't they have a joint venture with Siemens? Only they have the ability to bypass Datang in TD testing."

TD technology was originally Siemens' technology. Huawei also had a backup plan. In 03, it partnered with Siemens to establish an overseas technology company, and Siemens' entire TD division was transferred there.

Huawei simply doesn't think much of TD technology and has been focusing on researching two other standards. The reason for establishing this joint venture was probably to secure base station orders for the TD network.

It must be said that Huawei is indeed a source of pride for China, providing a way out for many domestic counterparts in terms of control over communication technology and later semiconductor and cloud computing technologies.

When Chen Xuebing founded his previous technology company, he never dared to imagine that he could run a company with such a huge technological foundation as Huawei. He only felt that he had the opportunity to surpass Huawei's market share.

But if he really has the chance, he will definitely take it.

After a moment of silence, Wu Ping glanced at Chen Datong, a hint of confusion in his eyes: "Are we... really going to oppose the Tang Dynasty?"

Chen Datong also clicked his tongue in slight annoyance.

No one spoke.

After all, many of the technologies the company uses now were licensed from Datang several years ago.

The license will expire in 2008, and if you want to play TD, you'll have to get a new license.

Chen Xuebing suddenly laughed.

"I think you're overthinking it. Datang is a state-owned enterprise, and a central enterprise at that. If you really make achievements and hurry up with your research to take TD technology to the next level, the country won't agree to it if they don't grant you the license."

"and"

Chen Xuebing glanced at his watch: "I have already declared war on Datang. Two reports were published today and should be on the desks of Datang's top management by now. If they really investigate me, I will not be afraid of them. As your shareholder, they will naturally consider it your opinion."

That was his real purpose in having someone publish those two articles.

Next, he will find more industry insiders to question it, stir up the hype, get the leaders' attention, get the common people to discuss it, and put Datang in the hot oil, forcing them to face the challenge head-on.

They laid out their plans and were ready to fight to the death.

When it comes down to it, no one can back down.

"so."

Chen Xuebing laughed.

“If you agree, I’ll become a shareholder. If not, you don’t have to sign this shareholding agreement.”

Looking at each other.

A very sensible director got up, opened the door, carefully looked outside, and only closed the door again after confirming that no one was there.

"You..." Chen Datong's expression was conflicted. "President Chen, you can't force us, can you?"

Chen Xuebing scoffed.

"Let me put it this way: Datang will keep dragging its feet, and the license won't be issued for three years. I know what you're thinking. The country has promised that the Olympics will definitely have 3G coverage. Our country always keeps its word. At the latest, it will be two years, maybe even less, including the time for base station construction, right? I advise you not to get the wrong idea. The Olympics have special privileges. They can build test networks without a license. They'll temporarily set up networks in Beijing and a few co-host cities. Once the Olympics are over, you can just wait to die. We'll see if TD's 4G technology can save you when it comes out."

He was telling the truth; that's how the script from his past life was played out.

It was just that the licenses were issued after the Olympics.

The TD network was also built slowly.

With WCDMA and CDMA2000 already in existence, and no one investing heavily in the development of TD-SCDMA, it's just gathering dust, and the 2000 billion yuan invested in network construction simply won't be recouped.

Everyone took a deep breath.

If the Olympics were to use a localized network, that would be the worst possible outcome.

However, there is still no word on the 3G licenses, and this outcome is quite possible.

Seeing that no one spoke, Chen Xuebing looked at his watch again: "If you're content to wait and be mediocre, I'd better not invest in this company either. I don't invest in companies without faith."

Still silent.

Mr. Chen is always adept at creating silence, and he has a knack for being assertive yet always reasonable.

Xu Datong and Wu Ping finally realized from these words that Chen Xuebing actually intended for them to take on the main responsibility for TD technology, and it was definitely not as simple as just giving them a push.

They're just chip manufacturers! Not telecommunications equipment manufacturers! Do you really think they're Huawei?

They can imagine how many technologies still need to be improved.

"Say something? If you're okay with that, I'll invest and help you seize MediaTek's market share as quickly as possible, giving you the confidence to start the war. If not, I won't waste my time."

Even Wu Ping's usually heavy breathing was particularly noticeable in the room.

Others can remain silent, but he cannot.

He couldn't accept that his company, which he had poured five years of his heart and soul into, a rising star in the 3G industry, and which had won numerous domestic and international awards, was being called "mediocre."

If Chen Xuebing comes and leaves today, no matter how many honors Wu Ping brings to the company in the future, he will inevitably be criticized.

Forcing a war...

Ha ha.

"Mr. Chen, we've always strived for excellence in R&D. We can figure out software technology; if we don't have enough people, we have colleagues and friends. But what about communication equipment? Challenging Datang isn't that simple. We need to be capable of being an equipment supplier. Otherwise, who will bring us into future big projects? We need to support many hardware engineers, have our own patents to cross-license with others, and train at least several thousand engineers! Huawei has over 20,000 engineers! You're talking about supporting the TD industry, but have you considered how much it would cost to rebuild Datang? You're in charge of marketing; can you make that much money for us? I think 1 billion is probably not enough; it needs to be at least quadrupled."

Wu Ping launched a counter-coup.

In fact, Chen Xuebing only talked about R&D and did not mention that he was an equipment supplier. He just changed the subject, thinking that he had offended Datang and that no TD equipment supplier would be able to help them in the future, making it difficult for them to participate in major national projects.

But those words finally struck a chord with Chen Xuebing.

"A few thousand engineers, is that a lot?"

Chen Xuebing chuckled: "A good university graduates thousands of engineers every year. Finding people is simple; just cooperate with a few universities. As for money, you don't need to worry about that now that I'm here. We can make money. If we don't have enough, I can provide you with financing, or even loans."

"You've built such a large team just to work on 3G?!" Wu Ping was a little bewildered.

Is this even worth making back?

“3G？”陈学兵起身，负着手悠悠道：“人生路漫漫，你也才40岁吧？就一个3G了？4G呢？5G呢？”

...

What about 6G?

(End of this chapter)