Chapter 86 Target: Cyrix
In the future, what we now know as the WTO was still called the provisional body of the General Agreement on Tariffs and Trade (GATT). Although China had formally applied to restore its GATT status six years ago and had been actively engaging in negotiation rounds, for various reasons, the foreign trade system review had been delayed again and again, still unfinished to this day.
Moreover, completing the foreign trade review was only the beginning. The subsequent rounds of negotiations were so arduous they could drive a person crazy. A certain high-ranking official once publicly erupted at a meeting: "We've been negotiating for so long that my hair has turned from black to white, and they still won't let us in. It's harder to join than it is to join the Party!"
If history didn't change, China wouldn't officially join until 2001 — already into the 21st century.
Now Yang Yiwen was saying that because of Yuanchip, the accession negotiations were being affected?
"Sister-in-law, can you be more specific?" Su Yuanshan glanced around cautiously and asked in a low voice.
Yang Yiwen smiled, thought for a moment, then switched seats with Yu Yurou so she could sit next to Su Yuanshan.
"The review of the foreign trade system itself isn't being affected, but the evaluation of our industrial development... is being complicated. You probably know we've been pushing to join purely as a 'Developing Country.'"
"Yeah," Su Yuanshan nodded.
"The problem is, the West thinks we aren't truly a developing country... I mean, which poor country has nuclear missiles, satellites, and intercontinental missiles? Now Yuanchip has suddenly emerged and filled the domestic software industry gap. That's why they've started reconsidering our classification."
Su Yuanshan couldn't help laughing bitterly. He knew how hard the WTO accession had been in his previous life — the key issue was how China would be classified. Based on per capita GDP, China was poorer than many African nations. But in terms of total GDP, it barely made the cut. And in some sectors, China even had real strength.
Even just arguing over that had dragged things out until 2001. Now, thanks to Yuanchip, would they have to drag it out to 2011?
Su Yuanshan smiled bitterly: "Well, nothing I can do about that. What do they expect me to do, dissolve Yuanchip? What else did your father say?"
"He just laughed and told me to focus on my work," Yang Yiwen said, looking at Su Yuanshan with a comforting gaze. "I think he wanted me to pass this on to you. After all, I'm sort of a senior figure at Yuanchip now, right? And no matter how difficult it gets, we can't sabotage ourselves."
"Absolutely!" Su Yuanshan said, raising his glass with a smile. "Sister-in-law, here's a toast to you and Senior Brother."
Yang Yiwen laughed, and the conversation soon shifted to lighter topics — like Intel's recent lawsuits against AMD and Cyrix. Intel was accusing them of infringing its patents with the AM386 and CX486 DLC-33GP chips, respectively.
At this, a strange smile crept across Su Yuanshan's lips.
How did those old songs go?
"Finally waited for you," "Once in a thousand years," "Waited so long, finally today"...
In Yang Yiwen's eyes, these lawsuits were just cases she needed to monitor — interesting but not critical. But in Su Yuanshan's mind, it was the butterfly effect failing to alter history. Intel was still Intel — that same market-obsessed behemoth.
Western commercial lawsuits dragged on forever. The lawsuit with AMD would end in 1995, with Intel losing and AMD gaining full licensing rights to the x86 architecture.
But Cyrix — that clever opportunist — had its own tricks. Besides cloning Intel's 386, they had cheekily named their product CX486, throwing in a bunch of technical codes to make it seem like it was Intel's 486.
As a pure design house, Cyrix outsourced manufacturing to Texas Instruments (TI), which still held x86 licenses that Intel hadn't reclaimed. This allowed Cyrix to mostly sidestep the infamous 338 patent.
Moreover, Cyrix held patents for floating-point units (FPU). While Intel sued them, Cyrix countersued for monopolistic practices and infringement of their FPU patents. Ultimately, they reached a settlement: Intel licensed FPU technology, and Cyrix gained limited rights to x86 architecture.
This year and next, Cyrix's low-end CPUs would flood Southeast Asia and China's markets, securing a foothold that allowed them to sell themselves for $550 million to National Semiconductor in 1997.
But two years later, they would collapse and sell to VIA for less than a third of that price.
...
After the hotpot dinner, Su Yuanshan took a taxi home.
Still smiling, he locked himself in his study and picked up the phone to call Xi Xiaoding.
"Senior Brother, it's me."
Xi Xiaoding yawned groggily: "... It's six in the morning here."
"I know. Sorry, I couldn't wait," Su Yuanshan said, barely suppressing his excitement. "Cyrix — they're one of our first clients, right?"
"Yeah, they embraced our CPU design tools fully."
"Good! I just heard from Sister-in-law Yiwen that they've been sued by Intel. How are they holding up?"
"Haha, those guys are seasoned veterans. No need to worry about them," Xi Xiaoding chuckled, thinking Su Yuanshan was just concerned about their partners. "They countersued Intel. Both sides are gathering evidence now."
Su Yuanshan was silent for a moment, then took a deep breath: "Alright. Quietly approach Cyrix. See how much it would cost to buy them out."
There was a long silence on the line.
When Xi Xiaoding finally spoke, his breathing was heavier: "Holy shit! Are you serious?"
"I'm serious. Since they're in the middle of a lawsuit, their price should be low. See if they're willing to sell. If yes, figure out the price, then check if Xinghai has the legal standing to make the purchase. If not, what adjustments would be needed? Would it require external financing, a special acquisition vehicle? Would it be cash, or cash plus equity? Everything is negotiable."
"Holy shit!" Xi Xiaoding cursed again. "You're insane. Buying a company in the middle of a lawsuit? If they lose, we could be bankrupt. Besides, even now, Cyrix is probably worth at least a hundred million dollars. Where are we going to find that kind of cash? Not to mention, we'd almost certainly face an antitrust investigation..."
"An antitrust probe can't really hurt us," Su Yuanshan said with a chuckle. "At worst, it's just a nuisance. Besides, weren't you just telling me not to worry about them?"
Xi Xiaoding fell silent again. After a few seconds, he said quietly: "It's easy to be casual when it's not your problem. But now that you want to take this risk, of course I'm worried. I get it — you want to grab x86 licensing rights through this. But it all depends on the lawsuits settling favorably. It's a huge risk."
"High risk, high reward," Su Yuanshan said calmly. "And don't worry about cash. Once cordless phone production ramps up, Xinghai will be flush with money."
"Plus, we could get IBM or TI to invest in Xinghai. They've been eyeing us for a while."
Seeing Su Yuanshan's mind was made up, Xi Xiaoding didn't argue anymore: "Alright. I'll wait for Carly to return and discuss how to approach them."
"Good. Just make it look like it's your idea. Try to keep Yuanchip's name out of it for now," Su Yuanshan said, staring out the window at the quiet campus of Electronics Tech. "Senior Brother, move quietly. No sudden moves."
"Got it," Xi Xiaoding replied, breathing deeply. "If we really get x86 licensing rights... do you think we can beat Intel?"
"We won't know until we try. Chip design is all about who's got more brains. Why should we be afraid?"
Hearing Su Yuanshan repeat the very words that had once persuaded him to join Yuanchip, Xi Xiaoding burst into hearty laughter, his blood surging with excitement.
"Alright! Let's do it!"
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