The plane cut through the clouds, heading straight for the other side of the ocean.
However, this chip negotiation was far from as easy as the last one.
After all, Qualcomm has always been strong, possessing a large number of CDMA patents, making it the undisputed hegemon of the 3G era.
To put it plainly, even if you don't use Qualcomm's chips, you still have to pay patent fees to Qualcomm!
However, in China during 2011-2013, these patent fees could still be avoided.
Domestic smartphones in these years sold for low prices, and few paid patent fees.
After all, if you really paid patent fees, for a 2000 yuan phone with a cost of 1500, Qualcomm would collect 300 in patent fees, Ericsson 100, Nokia 100, Microsoft 100, Huawei could also collect 100, Cisco 50...
Then don't sell it, it wouldn't even cover the losses!
Patent fees would almost be more expensive than the phone itself.
Therefore, domestic phones in those years could only be sold domestically without paying patent fees...
If sold overseas, the patent fees alone would cause huge losses.
But starting in 2014, Qualcomm also began collecting patent fees in China.
At that time, smaller brands were fine, but the top-selling brands had to pay!
Later on, even small-scale ones had to pay...
Zhu Changlin couldn't help but ask,
"Boss, for these chips, which company are you planning to purchase from?"
Wang Yi waved his hand,
"We'll decide after seeing the conditions offered by both companies. Chip procurement is a minor issue. The key is how to break free from dependence and achieve self-developed chips!"
With its current innovations, Xingyi Phone would have no problem selling for three thousand yuan.
But to go high-end, to challenge Apple's dominant position like Huawei, that would be difficult.
It must have its own unique products!
If it doesn't have its own core, if it's merely an agent, supply chain integrator, or an assembly-only phone brand, then mid-to-low end is fine, but aiming for high-end is a pipe dream!
This is also why Huawei and Apple can sell at high prices, while Xiaomi struggles to break into the high-end market.
Because Apple has its own system ecosystem, its own processors, and a large number of patents.
Similarly, Huawei also has its own processors, its own basebands, a huge number of patents, and a 100% pure self-developed system that is incompatible with Android!
To put it bluntly, a brand without genuine products or hard core technology can never go high-end!
Therefore, to break into the high-end market, Xiaomi also had to develop its own chips.
But Xiaomi lacked chip research and development technology, so what to do?
Datang Leadcore had it!
Thus, in October 2014, Xiaomi and Datang Leadcore established Pinecone Electronics, with Xiaomi holding 51% of the shares and Leadcore 49%, to jointly develop chips.
The main employees came from Leadcore, and the technology was also the SDR1860 platform technology developed and owned by Leadcore Technology!
Xiaomi, on the other hand, provided funding and market.
The following year, Pinecone Electronics developed the SOC chip — Surge S1.
Although it was only a mid-range system-on-chip, it was considered a success.
However, the subsequent Surge S2 chip failed its tape-out, and the SOC R&D path ended without further progress.
It wasn't until 2021-2022 that it successively launched the professional image processing chip Surge C1, the fast-charging chip Surge P1, and the battery management chip Surge G1.
Completely covering different areas such as mobile phone image processing, fast charging, and battery management.
But unfortunately, there was no progress on the most important processor, or SOC.
As for the difference between an SOC chip and an application processor chip, it can be understood as the difference between a whole and a part.
An SOC chip integrates CPU, GPU, baseband...
In 2011, application processor chips and baseband chips existed separately.
Every phone had one application processor chip and an external baseband chip.
By 2013, Qualcomm began integrating baseband chips into the processor chip, becoming an SOC system-on-chip!
To break into the high-end market, Xiaomi never gave up on self-developing chips.
And for Xingyi Phone to go high-end, it also needs to plan for chip R&D in advance!
And the earlier the layout, the better, as this is a lengthy process.
Even now, it's necessary to start recruiting talent and begin setting up the Xingyi Semiconductor department!
But how to do it specifically still requires careful thought.
No longer thinking about these matters, Wang Yi closed his eyes and slept.
When he woke up again, it was already daytime outside the window.
They had arrived in the Empire!
On this day, Wang Yi took off from the imperial capital in the morning, flew for more than ten hours, and it was still morning when he landed in California.
From day to day, it was also a novel experience.
However, to Wang Yi's surprise, as soon as they landed at the airport, he saw someone holding a sign, coming to pick them up.
"Is it Qualcomm?"
Zhu Changlin was a little surprised:
"Boss, your generous order of five million units in the country of Neon has caused a sensation even here in the Empire, and they've sent someone to pick us up!"
Wang Yi, however, smiled slightly,
"A pickup is a pickup, but it might not necessarily be Qualcomm!"
From his understanding, even with an order for five million chips, Qualcomm might not be so proactive.
There's no way around it, in these times, having many patents means being king! Strong basebands mean being king.
Fortunately, Qualcomm in 2011 still had competitors and was not yet so arrogant.
In two more years, competitors like Texas Instruments, NVIDIA, and Intel would be crippled, MediaTek would be unremarkable, and Qualcomm would truly become outrageously arrogant!
Wang Yi and his companions walked over.
Accompanying them, besides the English-proficient bodyguard Wu Shuang, were two English-proficient legal officers.
"Hello, I am Carter William, head of NVIDIA's mobile chip marketing department."
Carter spoke fluent Mandarin, smiling as he extended his hand.
NVIDIA sent him because of his good Mandarin.
"Hello, Mr. Carter."
Wang Yi was not surprised.
Indeed, it was NVIDIA that came to pick them up, not Qualcomm.
There was no alternative, both being dual-core chips, the Qualcomm 8x60 sold much better than the NVIDIA Tegra 2.
NVIDIA had significant inventory pressure with its dual-core processors.
Therefore, upon learning that a major client like Wang Yi with a five-million-unit order was coming, NVIDIA received the news and immediately arranged for someone to pick them up, intercepting Qualcomm!
"We heard that Chairman Wang was coming, and our Chairman Huang prepared early, wishing to invite you to lunch!"
Fearing Wang Yi's refusal, Carter quickly said,
"Chairman Huang is nearby, waiting for you!"
The airport where Wang Yi landed was relatively close to Qualcomm's headquarters, but hundreds of kilometers away from NVIDIA's headquarters.
Originally, Wang Yi intended to go to Qualcomm first, and then to NVIDIA.
But since NVIDIA's Chairman Huang was already waiting nearby, they had to meet him first regardless.
It can only be said that Old Huang was really pulling out all the stops to sell dual-core chips.
There's no way around it, without baseband chips, NVIDIA's dual-core chips just sold slowly.
It was precisely because of this that Old Huang was forced to beat Qualcomm by half a year, releasing the world's first quad-core processor, Tegra 3!
"Alright, then let's meet Chairman Huang first!"
Wang Yi said with a complex expression, also wanting to meet this person with astonishing "knife skills."
In his previous life, he had been "knifed" more than once!
"No rush, I'll first take you to the hotel; everything's booked for you. Chairman Huang will come directly shortly,"
Carter said with a smile.
"Thank you very much,"
Wang Yi sighed.
It seemed NVIDIA desperately needed this order.
Tegra 3 would be launched in four or five months, and Tegra 2 was urgently trying to clear inventory!
Maybe they could negotiate a good price!
Of course, the baseband was also a big problem.
Buying an NVIDIA processor meant also buying a baseband from another brand, and then adapting and debugging it...
Actually, what Wang Yi was more interested in from NVIDIA was next year's quad-core processor, Tegra 3!
Arriving at the five-star hotel, Wang Yi had just put down his luggage.
Old Huang appeared at the door, smiling and extending his hand,
"Chairman Wang, a pleasure to meet you, a pleasure!"
"A pleasure!"
Wang Yi reached out his hand.
"It is a joy to have friends come from afar, is it not? Chairman Wang, crossing the ocean and traveling thousands of miles to the Empire, I, Huang, must do my duty as a host."
As a Chinese American, Old Huang's Mandarin was quite good, saving the need for a translator:
"Let's go, I've booked lunch; we can eat and chat!"
"Good, please!"
Subsequently, the two went to the elegant restaurant on the top floor, drinking and chatting joyfully.
The meal was thoroughly enjoyed, and it wasn't until after the meal that Chairman Huang brought up the topic of chips:
"Chairman Wang, if you want to make phones, I, Huang, must help you! NVIDIA chips, however many you want, I'll provide, and at an absolutely low price!"
Wang Yi laughed in spite of himself.
Old Huang not only had precise "knife skills" but also managed to turn the tables.
It was clearly Old Huang begging Wang Yi to help them clear dual-core chip inventory, yet he made it seem like Wang Yi was begging to use his dual-core chips!
"I also look forward to collaborating with NVIDIA, but the biggest problem is that if we use your chips, we still have to buy Qualcomm's basebands!"
Wang Yi sighed, and began to counter.
Indeed, Old Huang's face became somewhat unnatural.
The baseband was his pain point!
In fact, developing application processor chips was not the hardest thing at the moment, and it put no pressure on NVIDIA.
The truly difficult part was baseband development, which was too challenging!
Because baseband development involved not only technical difficulty but also patent barriers!
For example, Apple's self-developed A-series application processors were excellent, but its developed baseband chips yielded no results for many consecutive years.
It could only use external Intel basebands.
But Intel's baseband was too subpar, with severe heat generation and poor signal.
This forced Apple in 2017 to bow to Qualcomm, making a one-time back payment of 50 billion yuan in patent fees, and having to pay 15 billion yuan in patent fees annually to continue purchasing external Qualcomm basebands!
Even later, Apple spent 1 billion US dollars to acquire Intel's baseband division to develop 5G basebands, but still failed repeatedly...
It could only continue to pay the "Qualcomm tax" and spend heavily on external Qualcomm basebands.
Similarly, Texas Instruments, the original mobile chip hegemon, completely abandoned its mobile chip business in 2012, also because it couldn't handle basebands and couldn't compete with Qualcomm!
And a few years later, NVIDIA abandoned its mobile chip business, also due to immature baseband technology.
However, NVIDIA only abandoned its mobile phone chip business; its original mobile chip division was retained and shifted to developing tablet processors and automotive infotainment processors!
After all, tablets have good heat dissipation and don't require basebands, which perfectly suited its "nuclear bomb" processors.
And automotive infotainment systems also have good heat dissipation and don't require basebands, with huge future market prospects.
NVIDIA thought,
"Basebands are so difficult to make, and we still have to pay patent fees to Qualcomm, so why should I stick to mobile phone chips? It's better to focus on tablets and automotive infotainment..."
It can be said that Qualcomm, this junior, was able to overturn Texas Instruments, the big shot, and NVIDIA, the big brother, not by its application processors, but by its basebands and patents!
And the reason Huawei HiSilicon could survive wasn't because its processors were advanced – K3V2 was truly subpar – but because Huawei had many patents and its self-developed Balong baseband was excellent enough!
Qualcomm 800 integrated Qualcomm's baseband, and HiSilicon Kirin 910 also integrated Huawei's Balong baseband.
But other processor manufacturers were stumped; they couldn't handle basebands and had no basebands to integrate.
Phone manufacturers who bought processors from Texas Instruments or NVIDIA still had to additionally buy Qualcomm basebands and attach them externally.
So why not just directly buy Qualcomm processors with integrated basebands?
After all, external basebands require debugging, which is difficult, generates more heat, and the signal is not as good as integrated basebands.
Secondly, Qualcomm basebands were very expensive, even more expensive than the processors.
And directly buying Qualcomm basebands, effectively getting the processor for free, offered better value for money.
Thus, mobile chips from Texas Instruments, NVIDIA, and Intel all went bankrupt...
Qualcomm became the absolute hegemon.
But with their bankruptcy, Wang Yi's opportunity arrived!
Texas Instruments' processor R&D team was even stronger than Qualcomm's.
Texas Instruments would completely abandon its mobile chip business in September next year, and it was likely there would be rumors this year.
Wang Yi could act preemptively, poach Texas Instruments' core R&D talent, establish Xingyi Semiconductor, and plan for the development of its own chips!
At the same time, invest heavily to recruit semiconductor talent.
Even if it couldn't go high-end initially, it could first develop a mid-range chip to break it in and accumulate experience.
This way, when the purely domestic Green Pomelo thousand-yuan phone is launched the year after next, it can use the self-developed mid-range chip.
With this experience, developing high-end chips later would be much easier.
Old Huang took a sip of tea and smiled slightly,
"Chairman Wang, actually, NVIDIA also has baseband chips. Would you like to buy some as well?"
Wang Yi was silent: "..."
Old Huang was trying to trick him!
NVIDIA did acquire a company that made basebands, but it wasn't mature enough yet...
Next year, when HTC buys NVIDIA's quad-core processor chips, it won't even dare to use NVIDIA's baseband, instead opting for an external Intel baseband!
'Even HTC wouldn't fall for it, and you want me to jump in?'
Wang Yi sneered inwardly.
Fortunately, he was a reborn person, otherwise, Old Huang would have tricked him to death.
Wang Yi even suspected that Old Huang recommended their baseband to every client he met, but their baseband was really not that good.
At least not now; it was just acquired and immature.
Invest money, and there might be a chance in a few years.
Wang Yi smiled faintly,
"Chairman Huang, regarding the baseband chips, we have a plan. Let's discuss the processor chips instead!"
"Alright!"
Old Huang sighed, a little disappointed.
'These days, there are really few patsies!'
'Our baseband chip is just a bit lacking, it's not unusable, is it? Seriously!'
Though grumbling inwardly, Old Huang still had a wide smile on his face:
"Chairman Wang, the NVIDIA Tegra 2 chip, dual-core, is very powerful. If you want a lot, I'll give you a low price, 16 dollars per chip! Absolutely cheap."
"16 dollars, which is about 103 yuan. It doesn't sound expensive, but add an external Qualcomm baseband, and it becomes expensive."
Wang Yi said quietly,
"And if you buy basebands from Qualcomm, the chips become even cheaper, practically half-price or bundled."
Qualcomm's chip pricing strategy was interesting: buying a processor chip alone cost 23 dollars per unit!
Buying a baseband chip alone cost 27 dollars per unit!
Neither was cheap.
But if bought together, it was only 32 dollars, which was equivalent to buying the baseband and getting the processor for free!
For large quantities, further negotiation was possible.
But with Old Huang, the advantage was not significant.
NVIDIA chip at 16 dollars, not expensive, plus a Qualcomm baseband at 27 dollars, totals 43 dollars!
It's more cost-effective to just buy from Qualcomm directly!
(End of chapter)