Those Years When I Was Forced to Top the Forbes List

Chapter 263 LTE News

"How many years have I slept? You guys are talking about 4G? Did I hear that right?"

Chen Xuebing entered with a smile.

It was past three o'clock. The blueprints and computers on the table were a mess. Some people were sitting on the table, and some were sitting on the floor. Our side seemed to be excited, but the Huawei people seemed to be keeping quiet.

Seeing Yu Chengdong's disgusted expression, Chen Xuebing knew that they had probably just talked about Huawei's lifeline.

He's not a communications idiot; he's actually learned some things over this period of time.

"I just heard you say that you can handle the two-carrier issue?"

I had heard before that this was extremely difficult.

Multicarrier technology can fundamentally improve network capacity, theoretically doubling it, although the actual speed will be lower than the theoretical value.

Based on the description above, with the support of HSDPA and Huawei technology, the peak speed reached 3.2Mbps. With two carriers, the theoretical peak speed is 6.4Mbps, which is close to that of CDMA2000 in the United States.

Although it's not quite as good as WCDMA.

Then the TD standard is no longer "half-3G"; it's a pure 3G.

That's already quite remarkable.

Moreover, as soon as he entered the conference room, he saw a small whiteboard on the table with blue lettering on a white background that read "TD-SCDMA→ TD-HSPA+→ LTE".

How could he not understand LTE?

4G standard!
Upon hearing this, Yu Chengdong laughed and said, "There is a chance, but the cycle is too long. Single-carrier optimization takes a year or two. Multi-carrier... just like I said before, scheduling algorithm research, multi-carrier digital front-end chips, virtual MIMO, multi-carrier synchronization, which one doesn't require a separate project team? How many years would it take to complete? And then there's the development on the base station side. By the time the research is done, we still have to convince operators to pay for upgrades. By then, the 4G standard will already be finalized, right? Even if the network speed is faster, can it be faster than 4G? Will the operators agree?"

Upon hearing this, Chen Xuebing grinned and said, "Then let's treat it as 4G pre-research. These technologies should be needed for 4G, right?"

Wu Ping immediately nodded and gave Chen Xuebing an approving look.

We've got the key.

He was very pleased that Chen Xuebing was able to understand these basics on his own, as it saved a lot of communication costs.

"4G pre-research? The 4G direction hasn't even been decided yet." Yu Chengdong laughed. "President Chen, do you know how much it costs to maintain this team? The testing team alone needs dozens of people, then there are two or three hundred for industry collaboration and chip R&D, and the most difficult is the algorithm and protocol development team. They need all senior engineers; anyone without seven or eight years of frontline experience simply can't participate. A team needs at least fifty to eighty people, right? There's simply not enough of those people to come up with domestically. Add in the materials, it'll cost at least seven or eight hundred million a year..."

“Ahem.” Zhou Guangping suddenly interrupted, “I’m reminded of some people in the IEEE Association who should be qualified.”

“Um… I have a few former assistants and friends who are also working on standard protocols and communication physical layer development,” Zhang Hao said quietly.

We're all respected experts; who wants to be manipulated?
"I have no shortage of people for chip design. The main issue is precision. Design can be developed in stages, but production will have to wait for the next generation, at least 40nm, otherwise the chip will have to be very large, and the power consumption and cost will be very high."

Wu Ping did point out some of the difficulties.

"Moore's Law, it's 18 to 24 months. Maybe in two years, advanced processes will already be 28nm," Chen Xuebing said with a smile.

"The cost of tape-out and production has also increased exponentially, Mr. Chen. There are still many key nodes where we need to buy technology from all over the world, with a total annual investment of nearly one billion yuan."

Yu Chengdong reiterated the importance of funds, thinking to himself, "Just keep pretending. I'll advise you one more time: if there's a way out, take it easy."

With such a large investment, if the technical assumptions are wrong and 3GPP changes its course, and your research and development path cannot be approved for 4G, then all the previous research and development will be useless, and the whole thing will be a failure. Is this something that a Chinese private enterprise boss can afford to invest?

Huawei is certainly different.

Huawei is a large-scale military operation!

Last year, the company had revenue of 450 billion yuan and net profit of 55 billion yuan. This year, it is expected to achieve 20% business growth, which is unmatched by many strategic state-owned enterprises.

In fact, Wu Ping also felt that discussing this topic was a bit hasty. He was involved in chip design and came into contact with super-large companies and foreign capital. The money was converted into US dollars, and the investment was often hundreds of millions or even billions of US dollars. But in mainland China, even the richest man only had a lot of money.
It's only a couple hundred billion RMB, right?
That's still an asset, not cash flow.

A single failed project could bankrupt even one of the top three richest people in the world.

Chen Xuebing nodded solemnly.

"Such a big matter does need to be discussed. Mr. Yu, you just mentioned MIMO technology and scheduling algorithms. How much is the licensing fee? We'll look into it when we get back. Since it's a technology that might be changed, the licensing fee shouldn't be too high, right? This technology won't be included in our joint research project; we'll just pay for it."

He belittled the technology to drive down the price while secretly sneering to himself.

What a joke! All for nothing? The 4G standard is LTE, and he even knows that China's standard is called TD-LTE!

When he decided to invest in TD-SCDMA, he had already considered the issue of technological evolution.

The more he learns, the more convinced he becomes that just knowing the name can save the team a lot of money and bring huge, certain returns!
He doesn't need to bet on multiple lines like Huawei!
Yu Chengdong is now stuck.

"Currently, our MIMO technology is still in the early research stage, and we have not yet developed a mature commercial licensing plan, so we do not have the conditions for external cooperation at this time."

He began to lower Chen Xuebing's expectations, and then added a friendly remark: "If you are interested, we can provide you with some technical documents and papers, as well as 3GPP standard drafts, free of charge."

Chen Xuebing chuckled.

He might have been fooled by these words a few months ago. But now, he can't be fooled anymore.

Aren't these just non-core, publicly available information? Where can't he find them?

In its previous life, Huawei had a very large market share in the early stages of 4G, which definitely meant it had been conducting preliminary research for many years in advance, so it's impossible that it didn't have technological accumulation.

Communication technology is just like military technology. If you use one generation, research another, and think about another, you'll never get anything done until everything is confirmed.

Huawei's success is due to its military strategic thinking, and this is something they must learn from.

Zhou Guangping suddenly said, "President Chen, actually, President Yu has already agreed to give us the scheduling algorithm. I know two companies that have research results in MIMO technology, one is called Shenglu Communication and the other is called Tongyu Communication. They used to be partners of Motorola. I am quite familiar with Shenglu Communication. Their Yagi antenna was very famous in 2002. Their research papers published in recent years show that it is very likely that they have combined the directional nature of the Yagi antenna with the multi-stream transmission of MIMO. I also know some manufacturers in the world that are researching this technology."

Upon hearing this, the Huawei staff looked somewhat uncomfortable.

Both companies mentioned by Zhou Guangping are Huawei suppliers!
Why did this exhibition invite a bunch of industry bigwigs who seem to know everything?
Although their technological accumulation is weaker than Huawei's, they grasp things very quickly!
They were all a little afraid to speak, for fear of revealing something.

"Oh," Chen Xuebing grasped the information gap and smiled deeply, "I understand. You two chat, and we'll leave when you're done."

Yu Chengdong finally couldn't hold back any longer and hurriedly went out to make a phone call.

A short while later, Ren Zhengfei, who hadn't shown up yet, arrived still sleepy and started talking to Chen Xuebing in the corridor outside.

"President Chen! Didn't you promise not to touch our core technologies and team?!"

Chen Xuebing had just finished a phone call, summoning people from Changzheng Capital to check the information on Shenglu Communications and Tongyu Communications, and had just come out of the office next door.

"Mr. Ren, you're joking. How could we possibly touch it?"

"Then why are you asking about our suppliers?" Ren Zhengfei asked, his expression displeased.

"Your suppliers?" Chen Xuebing stared wide-eyed. "I don't know! General Manager Yu didn't mention it! Only our General Manager Zhou mentioned it briefly!"

They're both old foxes, how could they not understand each other's ghost stories?
However, the potential orders secured by the mobile phone division and Chen Xuebing are also a key part of Huawei's strategy. Chen Xuebing possesses first-mover advantages in many aspects, and the cooperation is bound to continue for a long time. Ren Zhengfei doesn't want the cooperation to suddenly turn into a conflict because Chen Xuebing's large-scale technology acquisitions threaten Huawei's interests, so he simply spoke frankly:
"You want to develop LTE? How much money are you willing to invest?"

Chen Xuebing paused for a moment.

After thinking it over, and based on the foundation of cooperation between the two parties, I decided to stop pretending.

"Well, we can't maintain complete technology sharing. Let's set up a joint venture R&D company with a few key technologies. Huawei will contribute the technologies it has mastered, and we will evaluate them and increase our investment accordingly as future R&D funding."

He proposed a fairer solution.

Spreadtrum will definitely do its own 4G R&D, and the R&D direction will be kept secret. The establishment of this company is to help Spreadtrum bypass some high technical obstacles.

Since it is a smooth transition from 3G to 4G, if Spreadtrum can acquire some technologies that can be used in 3G during this period, it can become a source of confidence for Spreadtrum.

Ren Zhengfei then raised an eyebrow: "Then I'll be frank. Huawei established a 'long-term' project team back in 2004, and the investment was already substantial. If our technology costs over a billion, can you afford to invest?"

Technology without mature commercialization or market validation cannot be discussed in terms of value, only cost. Ren Zhengfei's attitude is quite fair.

“A billion or so is a very valuable technology.” Chen Xuebing laughed. “Let’s take a look. I’m in finance, and the resources I can mobilize are no less than those of Huawei.”

Ren Zhengfei waved his hand: "This is a high-stakes gamble, and it's also a confidential technology. If you use market money to form a joint venture, and then you become insolvent and a bunch of people come to visit the R&D company, we can't accept that. It has to be your own funds."

He gradually instilled in Chen Xuebing the oppressive aura of a giant corporation.

With just a few technical skills and so much capital, it's something most business owners can't compete with.

"More than a billion yuan, even in six months or a year, it wouldn't be spent all of it, right?" Chen Xuebing made up his mind: "Then let's invest in installments! If I don't have the funds later, Huawei can buy back my investment at a low price!"

Ren Zhengfei assessed the situation in his mind and said, "Alright, then send your people to negotiate. If you can offer a suitable price, we can cooperate."

This touched on Chen Xuebing's blind spot to some extent.

He genuinely didn't understand this kind of negotiation. Who was needed? How long was the process?

"Wait two weeks," Chen Xuebing said without changing his expression.

Ren Zhengfei sensed a hint of unease in him, but he himself was unaware of Chen Xuebing's true strength.

If the other party doesn't have the capability and wants to help Huawei reduce its R&D costs, that's fine too.

He smiled, revealing wrinkles: "Alright, I hope the cooperation goes smoothly, but Mr. Chen should still act within his means."

Mr. Chen lives a life of prestige.

Even when I'm short on cash, I've never let my pride get in the way.

"Mr. Ren, as long as Huawei's technology is worth our investment, we will take as much as you can offer."

(End of this chapter)