Chapter 74 Sony's Humiliation
Hilton Hotel, fourth-floor café.
Although it was called a café, what they were drinking wasn't coffee, but tea.
Seated across from Su Yuanshan and Xi Xiaoding were Takeda Naoto, director of Sony's Home Appliances Division, and the manager of their Silicon Valley branch. In fact, ever since Yuanchip had suddenly made waves with its VCD promotion that afternoon, they had been flooded with invitations from various Western companies, including AT&T, Verizon, and even the seven "Baby Bells" spun off from AT&T. But Su Yuanshan had ignored them all — until Takeda Naoto personally came knocking.
Su Yuanshan looked at Takeda Naoto, who seemed under forty but was clearly exhausted, and smiled warmly in English: "First of all, thank you, Mr. Takeda, for taking care of our employees." Here, he was referring to the Yuanchip after-sales team stationed in Japan and the technical staff working on simulation integration with Sony's wafer fabrication processes.
Takeda Naoto returned a couple of polite pleasantries before looking at Su Yuanshan with an odd expression and sighing lightly: "Mr. Su is truly remarkable. I am impressed."
Su Yuanshan knew exactly why — Sony must have just finished checking Yuanchip's VCD patents and realized the situation. "It was just a bit of luck, getting the product out a little earlier than another company," Su Yuanshan said with a calm smile. "Since Mr. Takeda has arranged this meeting, I assume it's to discuss cooperation regarding the VCD?"
Takeda Naoto was very straightforward: "Yes."
Su Yuanshan and Xi Xiaoding exchanged a glance and chuckled lightly: "Then may I ask, what kind of cooperation are you proposing?"
"To put it simply, we would hope for Yuanchip to transfer all patents related to the VCD to us," Takeda said, smiling as he gently blew on his tea. Then he looked up seriously: "But of course, I know that's impossible, right?"
Su Yuanshan and Xi Xiaoding both laughed.
"So?" Su Yuanshan asked.
"So we would like to know what Yuanchip's bottom line is," Takeda said, fixing his gaze firmly on Su Yuanshan.
Ever since Yuanchip's EDA exploded onto the scene last year, companies related to semiconductors had thoroughly investigated Yuanchip's background. Takeda Naoto knew that Yuanchip had been founded by Professor Su Xinghe from Electronics Tech, but that the one truly handling affairs was the young man in front of him — the one hailed in Silicon Valley as the "Magic Kid."
From the moment he entered the room, Takeda had treated Su Yuanshan not as a young boy but as an equal opponent. Nevertheless, as the director of Sony's most powerful consumer electronics division, he still held a natural advantage. His department was, after all, the strongest in the world.
Thus, he felt justified in directly asking Su Yuanshan for his bottom line.
Su Yuanshan narrowed his eyes slightly and smiled as he sat up straight: "Mr. Takeda, surely you don't think I turned down invitations from seven other companies tonight just to negotiate a simple VCD deal with you?"
Takeda's eyes twitched slightly. He also sat up straighter and said solemnly: "Mr. Su, please speak."
"My demands regarding the VCD are simple," Su Yuanshan said. "The patents will only be licensed, not sold. The mainland Chinese market belongs to us. Moreover, we must be allowed to jointly define VCD-related standards, including future upgrades and new product categories."
Takeda opened his mouth to reply, but Su Yuanshan continued: "In return, I can promise to source all optical drives and necessary precision components from Sony, with a guaranteed total purchase volume of no less than thirty million units over five years."
Takeda and his colleague immediately shut their mouths.
"However, to ensure smooth supply, Sony must cooperate with us to establish an optical drive manufacturing plant in mainland China."
"..."
"Alright, but that's not the most important part," Su Yuanshan said, tapping the table lightly.
Takeda and his colleague exchanged puzzled glances. Su Yuanshan's offer involved billions of yuan in business, and yet he said it wasn't important?
Su Yuanshan smiled gently: "Mr. Takeda, perhaps you haven't carefully reviewed our patent portfolio?"
Takeda froze for a moment — how could anyone possibly review over a hundred patents in just a few hours? Nevertheless, he admitted honestly: "No, I haven't had time."
"Let me explain then. Many of our patents are focused on heat dissipation, interference suppression, and optical drive stability," Su Yuanshan said calmly.
Takeda frowned slightly, still unsure of Su Yuanshan's point.
Su Yuanshan sighed lightly: "Mr. Takeda, have you already forgotten the great humiliation you recently suffered? If Sony still has any ambitions left in the home gaming console market, we can also collaborate there."
He paused for emphasis, then said: "We have developed a RISC CPU architecture capable of reaching a 50MHz clock speed and 45 MIPS performance. It's highly customizable — you could easily add a geometry transformation engine, for example."
After Su Yuanshan finished speaking, he leaned back silently.
The two Sony executives stared at him for a long moment, then stood up together and said, "Please wait a moment," before quickly leaving.
As soon as they were gone, Xi Xiaoding, who had been silently observing, finally asked: "What humiliation are you talking about?"
Su Yuanshan chuckled: "A few years ago, Sony and Nintendo jointly developed the Playstation-X, a CD-ROM add-on for the Super Famicom. But just when it was about to launch last year, Nintendo kicked Sony to the curb and announced a partnership with Philips instead to produce the CD-I."
Xi Xiaoding leaned forward eagerly: "And then?"
"Reportedly, the executive in charge of the project, Ken Kutaragi, was so furious he was shaking and screaming about cutting off Nintendo's supply of audio chips. But cooler heads prevailed — Sony couldn't afford the financial fallout."
Xi Xiaoding laughed: "But if Nintendo broke the contract, why didn't Sony sue?"
Su Yuanshan laughed even harder: "You're thinking too simply. If Nintendo dared to break the deal, do you think their legal department would have left any loopholes? According to Nintendo, Sony was the one trying to learn their technology and then backstab them — so Nintendo struck first."
Someone like Senior Brother Xi, purely a techie, naturally didn't know that Nintendo's legal team was infamous — their reputation as the strongest legal team in the universe was second only to Disney's in later years.
After the laughter died down, Su Yuanshan turned toward the direction where the Sony executives had disappeared and said quietly: "Now that we've handed them patents and a customizable CPU, let's see if they have the guts to fight."
Of course, Su Yuanshan knew that Ken Kutaragi definitely had the guts. This very year, he would persuade Sony's president to establish the Sony Computer Entertainment division and personally take charge, setting the stage for the development of the legendary PlayStation.
Not long after, Takeda Naoto returned alone.
"Sorry to keep you waiting," he said with a slight bow.
Su Yuanshan and Xi Xiaoding returned the courtesy.
"Our preliminary opinion is that cooperation is possible," Takeda said carefully, choosing his English words to ensure clarity. "But the specific terms and structure will require further negotiation."
Takeda finished speaking and looked expectantly at Su Yuanshan.
His words clearly conveyed Sony's attitude and baseline.
"I agree," Su Yuanshan said with a warm smile, nodding.
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