Looking at many business ecosystems in the technology circle of the Western world, it is actually a process of big fish eating small fish, mergers and acquisitions, and finally the strong getting stronger, eventually forming several large companies in the industry.
The growth of a company's R&D capabilities is often not a process in which the company sets up a team to invest in R&D and ultimately achieves breakthroughs in technology. Rather, it is often a process in which the company grows stronger with huge profits and then begins to expand horizontally, acquiring a series of small companies and incorporating them into its own system, thereby continuing to grow.
Because this approach is more in line with the rules of business competition and is more efficient.
Efficiency is the most irrefutable truth in the business battlefield where every second counts.
Comparing this with commercial competition in the West, we can understand why China is so far behind the West in this respect. It is because there is no such technology ecosystem of mergers and acquisitions. There are not thousands of companies that once survived as small fish in this pond, and eventually they ate each other and became a few big fish that went global.
China's related fields, such as the semiconductor integrated circuit industry, lack such a food chain, resulting in only a few small fish fighting alone. There are no horizontal schools of fish to absorb and merge with to learn from each other's strengths and make up for their weaknesses, so there is a natural lack of competitiveness.
This point was also mentioned during Cheng Ran's conversation with Li Taihang, which is the concept of "fish pond".
If there is no fish pond to accommodate enough fry, it will be difficult for the big fish that eventually form through competition to compete with related companies in the Western world. To form such a foundation, it still requires the guidance of the government and large-scale investment in "fry".
For Cheng Ran, who came from another time and space, there are certainly enough references to this country’s “bloody lessons”. That is a path that is difficult to see clearly in today’s China, which is still in an era of discussion, research, and even ignorance and confusion.
Cheng Ran conveyed this idea through Li Taihang. Of course, how much influence Li Taihang can have and whether it can eventually bring about corresponding changes are all unknown. However, this is all Cheng Ran can do at present. Because some things cannot be changed by speaking out. For example, is there no one who has proposed the outline of this concept? There must be someone who has seen this drawback and found some ways. However, these voices are lost in the mainstream when some mainstream ideas dominate.
Sometimes, if you conflict too much with mainstream ideas, you may even bring yourself into unnecessary trouble.
On the one hand, Cheng Ran tried to influence as much as he could through Li Taihang. On the other hand, he also did things in his own way.
The acquisition of the private design company and Allen was a matter of following the clues. It was not that Cheng Ran had remembered the role of these two companies. Instead, it was a set of plans tailored to the ARM company to be targeted.
The private design company is best at "SOC", which stands for system-on-hip, the design of system-level chip integration. Among the companies it has served before, ARM is also an important customer. It has an on-chip bus project and cooperates with ARM on a series of projects, all of which are intellectual property projects.
Allen Software's ASPEX technology enables DSP and ARM software developers to provide mixed-architecture debugging support through a single debugger, thereby improving productivity and reducing time to market.
Therefore, ARM knocked on the doors of both companies, on the one hand for key SOC design, wireless, signal processing technologies, and on the other hand for improving efficiency and reducing time to market.
If at other times, ARM could have fought for better acquisition terms and could have slowly negotiated.
But since the other party came to him, Cheng Ran knew that ARM's weak spot was there.
What is the weakness? ARM is well-known in later generations, but in fact, in the current era, most people have never heard of this company born in Britain, or even if they have heard of it, it was a small company that people did not pay attention to before.
ARM's predecessor, Aorn Computer Corporation, was founded in 1978. At that time, Aorn wanted to develop a new computer based on Intel's 80286, but Intel refused to give it a sample. If Intel had been more generous, ARM might not have been born.
In this way, Aorn developed the ARM processor in a fit of anger and achieved temporary success for a time, but basically in 1990, it was defeated by the Wintel ecosystem.
Even through the screen, you can feel ARM's resentment towards Intel.
If Apple had not been optimistic about ARM at that time, perhaps ARM's fate would have encountered twists and turns. After negotiations with Apple, ARM was separated from Aorn in 1990 and its earliest business was to develop ARM6 processors for Apple.
From one perspective, this company has a history, and after it was officially established in 1990, it took almost ten years for it to find its own trend. The rise of the mobile phone market finally allowed ARM to enter the fast lane of development.
It is not without rivals. Although Intel and AMD mainly focus on the PC field, no one dares to confirm whether these two companies will fight on two fronts at this time. These are always two swords hanging over its head. On the other hand, MIPS, which was spun off from SGI, is also a strong rival of ARM in mobile processors.
It is at this moment that ARM needs more expansion in the field of technology and higher production efficiency to occupy the market.
In these two fields, ARM needed to acquire two companies to improve its competitiveness. When he approached them, he discovered that the two companies had the same boss.
Those who came here to buy at the bottom after the Nasdaq tech bubble...
This made ARM's M&A department very angry.
In fact, they had wanted to get involved for a long time, but the tech bubble delayed their progress. After they had stabilized their position, they found that someone else had gotten there first.
If you get there first, you can negotiate.
This time, in addition to Zhao Qing's own team, he also seconded professionals in related fields from Fulong Company to obtain technical support during the negotiations.
The negotiation team, headed by Zhao Qing and under the command of Cheng Ran, was conducting negotiations with both sides in Cambridge, England, across the sea.
The British side has shown extreme impatience.
Because in Zhao Qing's last request, he proposed that if Private Design and Allen Software were acquired, in addition to purchasing 5% of the shares in ARM, they would also need to have a seat on the board of directors.
This immediately made the senior representatives of Arm feel that this was too difficult and hard to discuss, and they began to express their lack of interest in the two companies.
A week later, when the negotiating representative from Arm said that this might be the last discussion between the two parties and hoped that Zhao Qing would cherish the opportunity and that they would never get a seat on the decision-making board, Zhao Qing once again put forward the conditions for Tianxing Holdings.
There are two companies, one of which is engaged in SOC, wireless, and signal processing technologies that ARM currently needs for development.
The second is that it can help ARM gain higher efficiency in market share and shipment. In addition, the two companies have cooperated with ARM for many years. After ARM refused to acquire them, they immediately turned to MIPS, which also saw the profitability of IP licensing business and launched the idea of cooperating with MIPS to license processor design.
The proposal is to demand a 5% stake in ARM, a seat on the board of directors, and the highest level of architecture license among ARM's three levels of license.
Just slap it in front of the other person's table.
To answer or not to answer