Chapter 102 - How Much Did You Earn?
The reply from Texas Instruments' board of directors came very quickly.
As a well-established semiconductor giant with deep financial resources, TI was more than happy to invest in a company like Xinghai, which had both technical strength and development potential — not to mention that this company was a sister enterprise to Yuanchip, which kept creating miracles.
Thus, a third-party evaluation institution composed of a professional accounting firm and a bank also arrived quickly.
...
Then Su Yuanshan almost spat blood in anger.
"Are these people idiots? For a growing tech company, they don't even look at technical strength or future prospects — just the financial report? What the hell can they see from that?"
Looking at the current valuation of just one billion dollars given to Xinghai, not only Su Yuanshan, but everyone at Xinghai was left speechless.
Thanks to the cash flow brought by Yuanchip's EDA, Xinghai's development had been incredibly fast. Within a year, it already had two products with almost no competition: customer management software and cordless phones.
Both products had just officially launched less than a month ago, but with the telecommunications market channels Carly brought in, the cordless phones had already secured one million units in pre-orders.
On the CRM side, thanks to Su Yuanshan's weeklong visits, Xinghai secured orders from Microsoft and AMD, and even HP placed an order after Xinghai offered a discounted price.
Landing these industry giants meant the CRM product had the potential to become the dominant player, with a future market worth billions easily foreseeable.
If we really have to talk about turnover, just from the cordless phone's million-unit order, revenue would exceed four hundred million dollars.
And yet they still only gave a valuation of one billion dollars!
"It's definitely excessive," Carly snapped, throwing down her pen. But then she smiled, "I heard Cyrix was also making a fuss, claiming their patents are worth a fortune... And the evaluation agency said they didn't care what the patents were worth; they only looked at the current value of the company, making Claus nearly spit blood."
Hearing that, Su Yuanshan felt a bit better. Shaking his head with a laugh, he said, "This is classic Wall Street behavior — discriminating against non-listed companies like us."
Qin Si interjected, "To be precise, it's the old-school capitalists who still haven't caught up with the trends and mindset of tech development. They prefer the market to validate companies."
Yang Yiwen chuckled, "Capitalists would love to just throw a few pennies at you and buy your company outright."
Su Yuanshan burst out laughing, "You all summarized it very well. In the end, asset evaluation is just to give the other side a psychological baseline. It all comes down to negotiations."
Carly nodded, "Exactly. As long as TI genuinely wants to cooperate, everything is negotiable. After all, we are all professional tech enterprises and understand each other's market prospects."
She then turned to Su Yuanshan with a teasing smile, "I heard that last time, when you were negotiating with Sony, you ran away mid-talk?"
"Uh... That won't happen this time. Running away now would cost us money," Su Yuanshan said awkwardly. "Don't worry, when you need me, just give me a look, and I'll understand immediately."
Everyone laughed and continued to organize their advantages.
After all, a tech company's value could never be measured purely by existing market performance.
The TI negotiation team arrived quickly. After receiving the valuation report, President Vincenti and his delegation rushed to Silicon Valley. After just one day of rest and site visits, the two sides sat down at the negotiation table.
As Su Yuanshan said, this wasn't a cooperation — it was a transaction. If either side made a concession, it would mean losing money. Thus, compared to the negotiation with Sony, this one was far more intense.
On the first day, TI directly took out the valuation report as a basis for negotiation. Carly immediately rejected it, saying, "If you insist on this, we might as well talk profits — Xinghai's quarterly net profit is over 100 million dollars. How about yours? Is it even a billion?"
Her words left Vincenti choking. As a 50-billion-dollar listed company, TI had been continuously investing in plant construction over the past few years, and after a slight downturn in the semiconductor industry last year, their profitability wasn't great either.
Su Yuanshan secretly rejoiced while listening.
He attended the negotiation purely with a learning attitude.
However, Carly's sharpness and eloquence were something he knew he couldn't learn — it was simply a natural talent. Didn't Confucius say it best? Among the hardest things to deal with in the world...
The first day ended without much progress. Of course, in the evening, everyone socialized amicably and even held a small party.
The second day, both sides continued probing each other's bottom lines.
For Carly, as President, CEO, and future Chairman, there was no way she would easily compromise Xinghai's interests. For Vincenti, representing TI's shareholders, even if he wanted to invest, he had a baseline he couldn't cross.
...
"Let's summarize." Carly rolled up her sleeves, tapping her pen, smiling nonchalantly.
"I analyzed their financial report carefully. Recently, TI doesn't have much cash."
"Of course, 'not much' is relative. They're about to start a new wafer fab in Singapore, with an investment of about a billion dollars. So the cash they can spare for us is limited." Carly turned to Su Yuanshan, "Would you accept TI's stock instead of cash?"
Su Yuanshan thought for a moment, "Cash would be best. Because we'll need cash to acquire Cyrix, and after EDA is spun off, Xinghai will need cash too..."
"Right." Carly gritted her teeth and nodded, "Yes, I know you still want to build a wafer fab, right? Maybe we can have them trade a fab for shares?"
Pfft... Su Yuanshan couldn't help but laugh.
"I do want to build a fab, but not in Silicon Valley. There are dozens of fabs here; building another one would just make us cannon fodder." Putting down his coffee cup, Su Yuanshan smiled, "Carly, you know, our success isn't just about technology. It's more about long-term planning."
"A market of 1.2 billion people is hungry for tech products. Giving up would be foolish. So if I build one, it'll definitely be back home."
Carly fell into thought, then said, "It's still not very realistic to build in the mainland right now. I've handled Bell Labs' and Huajing's exports. I know the policy bottom lines — currently, the maximum allowed is eight-inch, 0.8-micron process. Meanwhile, the general trend abroad is breaking through 0.35 microns. If we wait a bit, maybe we can get approval for 0.5 microns."
Su Yuanshan shrugged, "See? Building now would be two generations behind. Others might be able to tolerate it, but as the head of Xinghai and a close partner of Yuanchip, could you?"
Carly burst into laughter, "Then we'll stick to cash. After all, we'll also need to build a new R&D center. Real estate prices in Silicon Valley are skyrocketing day by day — if it keeps going up, it'll be unbearable."
"Exactly. Cash is best."
Su Yuanshan replied with a smile.
Not just Xinghai, but Yuanchip's headquarters building was about to be completed and needed renovations; plus, four new R&D centers were about to be established.
Land might be cheap in the mainland, but setting up R&D centers and laboratories wasn't.
Thank you for the support, friends. If you want to read more chapters in advance, go to my Patreon.
Read 20 Chapters In Advance: patreon.com/Albino1