83: Chapter 83: Taking Over and Acquiring MediaTek

President Lin Wenxiong's originally tense face changed instantly...

"President Shen, you might not understand the situation." He leaned closer to Shen Fei again, which took Shen Fei by surprise. Could this guy have some sort of... He wasn't from Tianfu, after all.

Shen Fei's instinctive withdrawal left President Lin Wenxiong feeling a bit disappointed, though it didn't interrupt his train of thought.

"Currently, in the global Smartphone chip market, Qualcomm and Texas Instruments hold a monopoly on the high-end sector, while Samsung has its own industry and the major client, Apple.

MediaTek is the only partner that can achieve a win-win situation with you in the Smartphone market.

The MediaTek MTK6573 chip proves that our cooperation can absolutely succeed. If we collaborate..."

"President Lin." Before he could finish painting his grand picture, Shen Fei cut him off directly. "What if I said we are willing to acquire MediaTek for 2 billion USD? Would you agree to that?

This is a high premium, which would also allow for better cooperation..."

Relying on its turnkey solutions, MediaTek had achieved an astonishing market share of over 90% in China, but the profit margins weren't that high; it had merely kept MediaTek alive.

Coupled with the financial crisis, they were only worth 1.7 billion USD at the time.

2 billion USD was indeed a very high premium.

"Um... of course..." President Lin Wenxiong looked at Shen Fei in confusion. He had intended to laugh off the joke, but seeing that he didn't look like he was joking, he immediately changed his tune.

"This... this is not the same thing. Besides, your company probably doesn't have that much cash on hand."

"We do! We could even double that!"

Huang Tianya, who hadn't spoken since the meeting began, dealt President Lin Wenxiong a critical blow the moment he opened his mouth.

The 1 billion USD in the previous proposal was something he had begged and pleaded for, going through various shareholders to raise the funds, and yet...

This guy really didn't treat money as money. President Lin Wenxiong didn't know how to respond...

Just as he was silent, Shen Fei took a chip out of a drawer and placed it on the table.

"This is the MediaTek MTK6573 used in the Mate series. Compared to the public version of the chip, it has improved performance by about 20%.

President Lin should be very clear about what this technology means."

President Lin Wenxiong was certainly clear about it. He also knew that this chip wasn't that simple; it definitely wasn't something that could be solved by a simple algorithm.

Their public version chip had a gate oxide layer thickness of 2.1 nm, which is the standard data for TSMC's 40nm process.

But the MTK on the Mate was 0.3 nanometers thinner, which increased its switching speed by 18% and reduced leakage by 22%. At the same time, it also solved their traditional, long-standing problems regarding GPU decoding algorithms.

This definitely couldn't be achieved by overclocking software; the other party must have a more advanced production line. Although he didn't know how they did it, the facts were right there.

"President Shen, there is one question I want to know: why is your company's chip a bit different from our public version chip?"

"We have our own post-processing technology. As an industry professional, President Lin, you surely don't actually believe that an overclocking algorithm could boost performance this significantly, right?

This is an improvement of about two generations; if we were 'squeezing toothpaste', it could even be three."

The conference room went quiet immediately, and beads of sweat gradually appeared on President Lin Wenxiong's forehead.

No wonder! No wonder Transsion had this kind of confidence. A 1 billion USD investment, rejected just like that.

They really knew their stuff. As long as they had this goose that laid the golden eggs, Transsion could make as much money as they wanted.

If they wanted to save trouble, they could buy their chips and resell them to make a profit.

[Huawei: Where do you think our chips came from?]

"President Shen..." President Lin Wenxiong sat back down and proactively started discussing a new proposal, appearing very magnanimous.

"This post-processing technology... MediaTek is willing to purchase the license. You name the price."

Shen Fei smiled: "Didn't President Lin just say something about acquiring or taking a stake earlier?"

"That was..." President Lin Wenxiong was full of embarrassment. As a professional, he immediately shifted the blame to the board of directors; after all, they weren't here and didn't know the specific plan.

"That was the board's intention; personally, I prefer technical cooperation."

Shen Fei put away his smile and even readjusted his sitting posture: "Licensing is possible."

"President Shen, don't refuse so quickly, we can agree to the conditions," President Lin Wenxiong replied subconsciously, but the assistant beside him nudged him.

"What, you're willing to agree?"

"Of course, but there is one condition..."

"President Shen, please go ahead... never mind one condition, I can agree to 100 conditions."

The people around them laughed again. 100 conditions? It would be good if he could even agree to this one.

Looking at the uncontrollable smiles around him, President Lin Wenxiong realized something wasn't quite right, but since the words were already out, he had to hear the rest.

"All chips that need to be collaborated on must be sent to Transsion's factory.

We only process the chips; we won't look at the designs or ask about the manufacturing process, but the chips must be sent over, processed by us for enhancement, and then sent back."

After speaking, Shen Fei picked up the two documents on the table and continued reading, occasionally nodding to indicate they were not bad; both proposals were quite sincere. But President Lin Wenxiong on the side was already bristling.

"That's impossible." He was getting a bit anxious. "The chips are our most important asset. How could we possibly send them to a third-party factory? What if the technology leaks in advance..."

"Then there is no deal." Shen Fei stood up. "President Li, see the guests out."

"President Shen, we can sign the strictest non-disclosure agreement. Transsion can send engineers to our packaging plant to process them under our supervision... We can also pay the highest rental fees for the related equipment."

But Shen Fei still didn't stop walking. When he reached the door, he said one more time: "The technology is ours, the process is ours, and it must be on our turf. This is the bottom line."

"Wait..." But Shen Fei still ignored him and left the office. President Lin Wenxiong wanted to get up, but was stopped by other Transsion representatives.

Over the next two hours, he proposed various plans: building a joint venture factory (rejected by Wang Shangzhong), only processing low-end chips (rejected by Wang Shangzhong), charging higher patent fees (equipment still wouldn't leave, while the price was set at 2 USD per unit)...

The Huaxin delegation remained consistent throughout: agree to the plan, otherwise there is no deal.

After President Lin Wenxiong relented, Shen Fei came to the conference room once again.

As soon as he entered, the other party smiled bitterly and said: "President Shen, you are... trying to choke us to death!

If we agree, all chips in the future will have to be processed by Transsion, and then Transsion could choke us at any time..."

"President Lin is overthinking it." Shen Fei maintained that same polite but insincere reception smile. "Transsion makes phones, not chips. We have no interest in choking anyone; we just want to protect our core technology and obtain a stable supply chain."

"Moreover, this is a good thing for MediaTek. Using our enhancement technology, your chips' performance will crush Qualcomm's, and the price will be even cheaper.

By then, Samsung, HTC, LG... will all be scrambling to place orders. MediaTek's market share will increase by at least 20%.

And if one day your technology catches up, you can cancel at any time, right?"

President Lin Wenxiong was silent.

Cancel at any time?

That was a 20% performance boost; once they started using it, could they really go back?

However, he also knew that if MediaTek's chip performance improved by 30%, they would be the absolute hegemon in the market. Qualcomm, Samsung, NVIDIA, Texas Instruments... everyone would have to kneel.

At this moment, President Lin Wenxiong was facing a very difficult choice!