Those Years When I Was Forced to Top the Forbes List

Chapter 267 Kirin
The next day, Mayor Huang gave him the phone number of Editor-in-Chief Ai of the Economic Daily, saying that he had already spoken to him.

However, he did not arrange the interview immediately. Instead, he asked Lin Bin about TSMC's sample chips and then sent someone to the United States.

The time to witness a miracle is almost here.

Five days later, the Singularity technician who went to the United States returned to China with two Marvell technicians and more than a dozen Marvell-packaged SOC systems-on-a-chip.

(Reference picture)

The best and brightest from the IC department, materials department, software company, and other departments of Singularity were all transferred to a laboratory.

Everyone was tense yet full of energy.

Another five days of software integration and hardware-level debugging.

On August 16th, Lu Weibing stormed into the chairman's office.

"Chairman! You should try it! The first one!"

He mysteriously took out a silver prototype and placed it in front of Chen Xuebing.

"The initial verification of the SOC module is complete! There aren't many compatibility issues found so far, and most can be resolved by replacing components. Next is the verification of the entire system, which will require a significant investment!"

For complete machine verification, the BOM (Bill of Materials) needs to be determined.

We have collected a lot of material samples during this period, with different solutions from various manufacturers. After repeated assembly and verification, we will finally determine the optimal compatibility and price combination and lock in all supply chain capacity.

At this stage, it's time to pay deposits to all the confirmed suppliers, and in some cases, full payment in advance is required.

Chen Xuebing didn't speak for a moment, and picked up the machine in front of him to examine it repeatedly.

The 4.2-inch screen and the cool, smooth body feel like they belong to another world.

He turned on the screen, opened each software, and started operating it.

After a long while, a genuine smile slowly spread across his face.

Having used a basic mobile phone for two years, he couldn't help but talk to the phone in his mind.

"Old friend, it's been a long time."

He is lucky.

Throughout the entire testing process, the biggest concern is that the SOC will malfunction. If a problem occurs here, it will result in months of rework and debugging. The subsequent whole-machine verification, on the other hand, has a certain margin of error.

This set of materials is quite good, and it works smoothly.

If even one set of materials is adapted to this extent, it's enough to prove that the Kirin phone is a success!

The emergence of this prototype signifies that he has gained control over many things.

"Freeze the BOM list as quickly as possible!"

Chen Xuebing slammed his hand on the table and ordered, "I'm giving you three months. You need to start trial production and verification within three months!"

"Trial production, money." Lu Weibing spread out one hand and beckoned.

For the first version of the high-end model, producing 300 sets in trial production shouldn't be a big problem. The key is to secure orders so the factory can buy the machines.
How can we produce if we don't give them two or three hundred million?
Chen Xuebing waved his hand.

“I will give you the money. By the way, the RMB may appreciate recently. Foreign currency settlements should avoid exchange rate linkage clauses. We might be able to save some money by manipulating the exchange rate.”

Two days later.

Conference room of Singularity Technology, 57th floor of SEG Plaza.

14:15, before the interview.

The air conditioner vents were buzzing, but they couldn't quell the intense heat that filled the room.

Above the conference room hung a calligraphy banner that read, "Technology knows no borders, the market determines life and death." The photographer took several pictures of it.

Ren Ying adjusted the position of the recorder for the third time and whispered to the photographer, "After you review and publish it, we may post the interview audio and some photos online. When Mr. Chen talks about the patent later, please take a close-up shot."

Zhou Ming, chief science and technology reporter of the Economic Daily, frowned and said, "We have a news website, and it will be published, but some content may be cut out."

"Understood, we will edit the audio based on the content you post."

Ten minutes later, Chen Xuebing, wearing a white shirt, entered the conference room and shook hands with Zhou Ming.

"Welcome, thank you for making this trip."

Zhou Ming smiled and noticed a Casio digital watch peeking out from the young chairman's rolled-up sleeves. After sitting down and waiting for the machine to start, he asked with a smile:

"Mr. Chen is worth hundreds of millions, yet he wears such a simple watch."

Chen Xuebing glanced back, realizing the interview had already begun, raised his hand to check, and smiled:
"I just followed the trend. I haven't actually worn it for more than a few days. I saw one of our engineers wearing it a while ago. I heard it can be radio-controlled and synchronized globally. I guess I bought it as a hobby."

"Mr. Chen is a tech enthusiast."

“Yes.” Chen Xuebing nodded: “Actually, my main job is in finance. I founded Qidian because of my hobbies and some ideas about technology, and we make our own mobile phones.”

Zhou Ming looked around and exclaimed, "President Chen has spent a lot of money on this hobby, and even invested in Spreadtrum and became a major shareholder?"

"Technological needs, and I also really like Spreadtrum's innovative concepts. Of course, it's undeniable that I believe Spreadtrum can make me a lot of money in the future."

After the casual conversation, Zhou Ming got down to business:

"Mr. Chen, the Ministry of Information Industry issued a document today emphasizing that 'technological development must avoid being hijacked by capital,' while your previous remarks were interpreted by some media as 'using the market to hold standards hostage.' How do you respond to this characterization?"

Chen Xuebing picked up a copy of "RM Post and Telecommunications".

“I saw the article, but I think the ‘capital’ mentioned refers to speculators. Singularity Technology has earned less than 100 million yuan in the past year and a half, but its R&D investment has exceeded 300 million yuan. Spreadtrum Technology, on the other hand, has been continuously raising funds since its founding after returning to China, and all the funds obtained have been invested in R&D. We are the ones who are paying for technology and value the future returns of technological output. On the contrary…”

He pulled out a copy of Datang Financial Report from 2005-2006 from under the newspaper.

"Over the past two years, they have received 12.5 billion yuan in loans and subsidies, suffered operating losses of over 6 million yuan, and their controlling shareholder illegally misappropriated 4736 million yuan of funds. Their R&D investment ratio is less than one-third of our two companies. If our two companies are capital, then the only thing that resembles capital is that our operating conditions and investment potential are indeed much better than theirs. We have better financial planning, and in fair competition, we can develop better technologies to survive, while they will be eliminated."

Zhou Ming immediately pressed further: "What do you mean by fair competition?"

"Eliminate any undue technological monopolies." Chen Xuebing didn't elaborate further.

This answer was designed for him by the reporter in front of him.

The Economic Daily was acting on instructions from its superiors to help. On some key issues, the reporters were to raise the questions, and Chen Xuebing would passively answer them.

"I've noticed that this isn't just your opinion; there are many more radical views that suggest the slow progress of TD industrialization is directly related to the cooperation of core patent holders?"

The problem is coming.

Chen Xuebing sighed, then said seriously, "As someone who has experienced it firsthand, I have to say that this is the right thing to do. We've been talking about industrialization for years, but what exactly is industrialization?"

He pointed to the banner on the wall as he spoke: "It's the market."

"Why was Spreadtrum able to achieve TD chip R&D and mass production in just two or three years? Because we spend 90% of our expenses on R&D, while some partners who hold core patents are more interested in patent litigation than in technology implementation."

"Give me two examples."

"When Spreadtrum proposed joint development of multi-module chips two years ago, they demanded a patent fee of $2 per chip, plus numerous patent licensing fees from terminal manufacturers—this directly killed the possibility of TD-SCDMA phones priced around 1,000 yuan. Without low-end phones, how could we expand the 3G market? We had to apply for subsidies from the National High-Tech R&D Program, upgrading existing 2G multi-functional phones on the market for free at a subsidy of 180 yuan per phone. However, after we upgraded more than 300,000 phones, they stopped our upgrade program on the grounds that they hadn't paid for the patents. We weren't making any money, and we didn't know how to pay them the patent fees."

After holding back for a long time, Chen Xuebing finally unleashed the big move of subsidizing the National High-Tech R&D Program (863 Program) and its core technologies.

—The 3G upgrade that Datang halted was a project subsidized by the Ministry of Industry and Information Technology.

He hadn't said anything yet, waiting to reveal it in an authoritative media outlet to give the Tang Dynasty some recognition.

At this point, Zhou Ming quickly gave him a meaningful look.

That's enough, stop revealing too much. If you say any more, we won't let it air.

Even the last sentence has to be cut.

"Since the bottlenecks in the TD industry chain mainly lie in patent content and market acceptance, in your opinion, what are international manufacturers most concerned about when they get involved? Is it the technological threshold or the commercial return?"

Chen Xuebing pondered for a moment and said, "Actually, the two are intertwined. Technological openness determines commercial viability. For example, TI (Texas Instruments) is most concerned about whether our multi-mode chip can be compatible with their DSP design. Otherwise, they would need to develop an additional TD version, leading to uncontrolled costs. Broadcom, on the other hand, values ​​the transparency of the patent pool. They need to know exactly how many patent holders will receive each phone sold."

"Yes, we have noticed that there has been a lot of controversy among international telecom operators recently regarding the timing of issuing TD licenses, with concerns about market barriers in China. As one of the main promoters of the TD industrialization, how do you view this anxiety?"

Chen Xuebing smiled:
"First and foremost, it must be clear that TD has never been developed in isolation. From the moment the ITU accepted TD as a 3G standard in 2001, it was destined to be part of the global telecommunications industry chain. Of course, its technology itself has limitations; its communication efficiency cannot match WCDMA and CDMA2000, so it needs an open R&D environment even more. "However, Europe has its own favored WCDMA, the United States has its own CDMA and WiMAX, and China, as the largest market, has every reason to support its own standard."

"The Chinese government has never demanded a 'single standard.' On the contrary, what I see in any high-level rhetoric is encouragement of differentiated competition. I believe that the future will see the coexistence of the three networks, only with slightly different incentive policies."

"China's push for the TD market is inevitable, but the real challenge is not market access, but how to enable all international participants and local companies to find a win-win situation in the TD ecosystem."

Chen Xuebing's remarks first overturned the notion that "TD is the same as Datang," emphasizing that TD technology needs an open environment to have a chance to catch up with other standards, and then began to reassure overseas telecommunications companies.

Zhou Ming flipped through the notebook in front of him and then asked a deeper question.

"Mr. Chen, what do you mean by 'participation'? How can international manufacturers participate?"

"We are not an official body and cannot provide specific channels for participation. We can only offer a few suggestions and our willingness to assume responsibility in the internationalization of TD."

Chen Xuebing raised three fingers and said:
"My suggestion is: technology sharing, market expansion, and risk sharing."

"Technologically, we are open. Spreadtrum is willing to set an example by licensing its mature TD module designs to any company. In addition, we will solve some individual problems. For example, if TI wants compatibility, we will make the TD baseband into a pluggable IP core so that partners can directly integrate it with existing technology. If Broadcom wants to negotiate patent packages, Spreadtrum will help them unify the rates and then distribute them to partners at a fixed ratio."

"Through these solutions, we can reduce the cost for them to enter the TD industry."

"In the market, we welcome foreign brands to participate in TD mobile phone cooperation under their own brand, and to participate in the TD supply chain and market profit distribution."

"In addition, the 3G market should welcome foreign investment to share the benefits and risks. This involves a huge number of industrial categories, and I think the benefits will outweigh the risks. Therefore, our subsidiary, Changzheng Capital, is working hard to communicate with the National Social Security Fund and Central Huijin to establish a TD international industrial fund to invest in related companies, including foreign-invested enterprises."

Zhou Ming looked suspicious.

Do you think foreign manufacturers can really make money in the TD market?

“Of course,” Chen Xuebing confirmed. “TI (Texas Instruments), NEC, and Broadcom can work with us to develop dual-3G or even triple-3G module chips for TD-WCDMA or TD-CDMA2000. Panasonic and Nokia can enter the TD mobile phone market through Spreadtrum technology. Ericsson, SoftBank, Alcatel-Lucent, and even Motorola, whose communication technology is still stuck in the 2G era, can all enter the base station market through our technology.”

These statements are rather broad; the real focus is on conveying our attitude to management: TD wants to go global, and our management experience is much more mature than Datang's.

Today's dialogue should demonstrate that Spreadtrum's systems and philosophies are superior to Datang's in every way, eliminating some redundancy from upper-level negotiations, before proving the technology.

Furthermore, we must maintain an open attitude towards foreign businesses: if you want to make a profit, come on over; even in the TD market, you will have a share.

Of course, making a statement is one thing, but putting it into practice is another.

Zhou Ming nodded slowly and said, "I noticed that you mentioned most international manufacturers, but not Qualcomm."

“Qualcomm?” Chen Xuebing chuckled. “What’s the difference between them and the competitors we just mentioned? In 2005, six international companies jointly filed a complaint with the European Union, accusing Qualcomm of unreasonable charges and patent bundling in its patent licensing. They are the real international bullies. That competitor… is just a small-time bully. We will never cooperate with such a company.”

Qualcomm used him to attack TD, and he must distance himself from the situation.

Moreover, this target dominates CDMA2000 and monopolizes WCDMA, making it an excellent target for attack as everyone suffers at its hands.

It demonstrates Spreadtrum's toughness; no one will object to criticizing them.

I'm not doing CDMA, so what's there to be afraid of?
Just criticize Qualcomm!
Having covered the key points, Zhou Ming began to elevate the theme:
If TD succeeds in China, will it have the opportunity to expand overseas?

"Of course!" Chen Xuebing replied confidently.

"TD's advantages in smart antennas and spectrum efficiency make it particularly suitable for emerging markets."

“In regions such as India, Southeast Asia, and Africa, spectrum resources are scarce, and operators have a strong demand for low-cost network construction. The network construction cost of TD is 30% lower than that of WCDMA, which is very attractive to developing countries.”

"We are also deepening our understanding of the relevant technologies and have already achieved many technological breakthroughs. It is by no means as bad as Qualcomm engineers have said in the Wall Street media, and it will even far exceed their imagination."

"This will be verified within three months."

"In the future, TD will not only be a Chinese standard, but may also become the 3G choice for developing countries."

After reiterating Qualcomm's arguments and criticizing them, Chen Xuebing felt the interview was over.

Zhou Ming paused for a moment, then added, "Three months? That fast?"

Chen Xuebing smiled and said, "Yes."

Before Zhou Ming could ask anything else, he waved his hand, indicating that the interview was over.

Then, he took out a silver-plated phone with a subtle pattern from his pocket and placed it on the table.

"Reporter Zhou, I know what you want to ask. Coincidentally, our 'Kirin' phone has just produced its first prototype, which I can show you. 3G technology ultimately needs to be implemented in products, and our technology already has the best platform for that."

Expressing one's stance is one thing; demonstrating strength is another.

If we don't give them some juicy scoops, do you think such a big, B-level Party media outlet would just stand up for us based on a few casual remarks?

Zhou Ming's gaze was completely drawn to the large 4.2-inch screen.

He picked it up and examined it closely; he had never seen a phone like this before.

Chen Xuebing gestured for him to press the power button next to him.

"You can turn it on by swiping your finger across the unlock box."

"clatter."

Chen Xuebing saw Zhou Ming's face glow with an astonishing light, as if he had "discovered a new world," as the screen's light illuminated his face.

"The software above can be opened with a single tap of your finger."

A dozen minutes later, Zhou Ming, still not satisfied, reopened the photo album and held up two fingers to a high-definition picture inside.

Zoom in, zoom out.

The camera next to us has been recording non-stop since the interview ended.

The photographer held the camera up close, his eyes fixed on the scene in the lens, forgetting to control the composition through the viewfinder.

"How much are you planning to sell this phone for?"

Zhou Ming knew it would be very expensive, but as a technology journalist and a tech enthusiast, he was willing to pay for such a product.

"It's not finalized yet, but the BOM cost is very high, close to 3500 yuan." Chen Xuebing exaggerated a bit.

The actual total cost was over 3200, which included some features not found in the first generation of Apple products, such as a gyroscope.

With Marvell's exorbitantly priced chips, the total cost could be more than double that of the first-generation Apple chip.

Zhou Ming was even more astonished.

"The material cost is close to 3500, so it has to sell for seven or eight thousand!"

Chen Xuebing chuckled.

Material costs are not actually fixed. Next year, some suppliers will lower their prices a bit, and as they sell more and more, suppliers will also consider giving some discounts.

Cutting suppliers' costs is a slow process.

However, he did not explain, but simply glanced at the camera and reminded:
"Reporter Zhou, you can show the video recording on the cell phone to your superiors, but please don't publish it in the report."

"Um." Zhou Ming paused for a moment, "I... I won't mention the appearance, and I'll try not to mention the functions either. Can I just talk about my experience using it?"

This phone is amazing.

As a journalist, how could he possibly keep quiet after obtaining such firsthand information?
He even wanted to revise Chen Xuebing's speech earlier!

It's more than just "what they said is true"?
This is truly an "utterly humble" entrepreneur! During the interview, he only talked about Spreadtrum, but how could he resist mentioning this phone so closely?
"Hmm," Chen Xuebing thought for a moment, then nodded and said, "Alright, we're going to contact advertising companies anyway. You put it well, so I'll send you one before the official release."

"Deal!" Upon hearing this, Zhou Ming rubbed his fingers on the dark patterns on the Qilin side key, finally letting go and standing up to shake hands firmly with Chen Xuebing.

Chen Xuebing escorted the person to the elevator, just as his phone vibrated in his pocket.

I took it out and glanced at it; it was a text message from Kan Zhidong.

"The Shanghai Composite Index closed at exactly 1600 points this week."

The smile on his face gradually faded.

The turning point is approaching.

(End of this chapter)