Chapter 461: Letter of Submission
In addition to attending the Keidanren meeting today, Shirakawa Kaede will also meet with several overseas visitors.
Most of these overseas visitors are old acquaintances of Shirakawa Feng.
Apple CEO Sculley, IBM's Lewis, and Vanguard Group's Wood.
The reason they came to Baichuan Feng was to raise funds for SIC and then operate SIC to be listed in the United States.
SIC has been established for seven years and is now a well-known brand in Neon.
As far as the domestic market is concerned, SIC has captured more than 60% of the processor share in the computer field.
For the remaining small part, the processor chips used by Toshiba and Hitachi are still products authorized by SIC.
In other words, almost all the processor chips of Japanese computers have a direct or indirect relationship with SIC.
Since it has been specializing in the processor field from the beginning, after several years of hard work, SIC has achieved its current situation and it deserves it.
But why do these overseas visitors suddenly want to raise funds from SIC? That is also related to SIC's performance in the North American market this year.
In the global computer market, excluding Japan, except for Apple and Shirakawa Electric's own notebook computers, SIC chips are used.
Just this year, another North American computer manufacturer giant, Compaq Computer, also became an important customer of SIC.
In its new generation of portable computers, Compaq used SIC's 32-bit chip 80381, and the sales of this portable computer exceeded 500,000 units by the end of the year.
With such performance, Compaq ranks third in sales in the North American computer market this year.
This is a remarkable achievement, and as a result, SIC has once again entered the field of vision of many computer manufacturers.
With the successive applications of Apple, Compaq, and Shirakawa Electric itself, the performance of SIC has been recognized by the market.
As a result, HP, Wang An, and even Dell, which had only been established for a few years, began to contact SIC frequently to discuss the possibility of future cooperation.
After all, among all processor chip manufacturers in the world, SIC's products are the most cost-effective.
Although the Japanese yen appreciated significantly, SIC's initial pricing was much lower than that of its peers.
Therefore, even though the price has increased significantly due to the exchange rate, SIC's chips are still very competitive compared to Intel and Motorola.
The choice of the capital market has nothing to do with nationality. Whoever can generate more profits will be chosen.
Going back further, Compaq chose SIC, probably because of its low price, in addition to performance reasons.
Today, thanks to Apple, Compaq and Shirakawa Electric itself, SIC has become the third largest player in the North American processor market, following Motorola.
Wall Street thought that this technology company from Japan was too young and had not yet gone public.
It’s just fine if you’re not listed. If a company wants to grow and develop, going public is an inevitable choice.
Especially if you want to survive in the global market, don’t even think about having a monopoly.
And when it comes to going public, that's what Wall Street does best.
So the greedy capital began to study everything about SIC carefully, and soon they discovered that SIC's business model was very peculiar.
This is a pure design company that does not have its own wafer fab and relies entirely on other semiconductor companies for foundry services.
This is very interesting, so some people become more interested, while others lose interest.
After all, as a technology manufacturing industry, if its value will be greatly reduced.
However, those who are interested hold the opposite opinion. They believe that light-asset design companies have lower risks.
In addition, they found that SIC had licensed its designs to some semiconductor companies in North America.
This enlightened approach is very different from the traditional Japanese companies in their impression.
So after many twists and turns, Pioneer finally found Apple and wanted to talk to SIC about the possibility of financing through them.
Known as the ubiquitous pioneer in the asset management industry, the reason why it chose Apple.
In addition to the fact that Apple is one of SIC's clients, Pioneer Navigation is also a behind-the-scenes shareholder of Apple.
Coincidentally, IBM, who had heard the news from somewhere, had the same idea, so everyone hit it off and decided to form a group and fly to Neon.
Faced with their temptation, Baichuan Feng did not refuse outright.
He knew very well that if SIC wanted to have a place in the processor market in the future, it would not be able to just develop products behind closed doors in Neon.
As the center of the computer industry, Silicon Valley in North America is the best stage.
But is it possible for SIC to capture the North American market relying solely on itself?
In this regard, Baichuan Feng had to be pessimistic.
Let’s not talk about anything else for now. Just look at the outcome where Japanese semiconductor companies had to sign the U.S.-Japan Semiconductor Agreement with tears in their eyes.
It would be fine if SIC had always been a small and transparent company in the local market, but if it wanted to expand overseas and take up a considerable market share, the fate of Japan's DRAM chip companies would serve as a lesson for it.
Therefore, if SIC is to become a major player in the future processor market, going public is inevitable, and North America is the top priority.
However, although everyone has the same goal in terms of going public.
However, regarding SIC's operating methods, Shirakawa Kaede had some differences with IBM's Louis.
"Louis, I have to reiterate it again. SIC will not cede the franchise of chip design to other chip manufacturers, especially in the computer field.
If IBM wants a stable supply chain and favorable prices, SIC can sign an agreement with IBM and include this in the terms.”
Baichuan Feng has repeated this sentence several times, and he has no intention of giving in on this point.
After taking a look at Apple's Sculley, Baichuan Feng had to put down the coffee cup he had just picked up.
“Of course, the same is true for Apple. But Sculley, SIC and Apple have always had a pleasant cooperation, and you have always received preferential prices.”
Sculley shrugged. Although he also preferred SIC to open up licensing, Apple's willingness was not as strong as IBM's.
As for Wood, who led the pioneering work, he was the most leisurely. His goal was only to invest in SIC and manipulate its listing.
But Pioneer doesn't care about the specific business methods, he only cares about profits.
Baichuan Feng knew why IBM wanted SIC to open up licensing to other chip manufacturers. It was simply to ensure that it could always get a stable supply and preferential prices.
The more semiconductor companies that can produce SIC chips, the more stable IBM's supply chain will be.
Even if SIC and IBM fall out one day, those authorized manufacturers can continue to supply IBM without worrying about SIC interfering.
Even though IBM is using Intel chips now, it is still not confident about it in its heart.
Before talking to SIC, IBM also asked Intel to do the same, but the other party refused.
That's why Louis sat in front of Baichuan Feng at this time and continued the negotiations.
"Baichuan, it's not that I don't trust you, but business is business, and we have to consider the worst case scenario."
Louis obviously still hasn't given up his idea. After all, IBM does have a shortcoming in personal computer processors.
“Louis, since IBM intends to finance SIC, is it still worried about future supply issues?
Mr. Scully, please think about this: as a shareholder of SIC, we will of course give priority to Apple and IBM.”
Although Apple and IBM considered each other as rivals two years ago, since the rise of Compaq, and the entry of HP, Dell and even Shirakawa Electric.
At this time, the North American computer market was already in chaos, with each company having different market shares, but there was no single dominant company with an overwhelming advantage.
To put it bluntly, the market shares held by everyone are actually not that different, and no one can do anything to anyone else.
Because at this time Apple and IBM could sit together and discuss SIC's financing with Shirakawa Kaede.
But when I think about it, what Baichuan Feng said does make sense. Now that we have become shareholders, do we still need to worry about supply issues?
"Well, Louis, SIC can be listed in the United States. Then it will definitely follow the principle of internal priority, don't you think, Mr. Shirakawa?"
At this time, Wood, who had been silent, began to step in to smooth things over.
Baichuan Feng nodded in approval, "Of course, Mr. Wood, please rest assured, SIC can guarantee this."
Louis glanced at Wood and then at Scully, who continued to shrug.
"Well, in that case, please ask SIC to include this in the terms and conditions."
Louis heard the hidden meaning of Wood 's words. At home in North America, SIC would abide by the rules of Wall Street.
Baichuan Feng did not refute anything about this, but readily agreed to Louis' request.
With Apple and IBM, SIC will have the possibility to continue to grow bigger and stronger in the North American market in the future.
At the same time, because of the background of US capital, various "US-Japan Semiconductor Agreements" will have nothing to do with SIC in the future.
Alas, if you want the market, you can’t avoid some tokens of allegiance.
However, today's communication with Apple and IBM is only the first negotiation.
If SIC really wants to be listed in North America, it still has a lot to do.
In addition, considering the future listing venue, Shirakawa Kaede may have to bring along one or two Japanese allies.
After returning to the SIC building in Shibuya, Shirakawa Kaede immediately called a meeting with several core members including Shima Masayoshi, Matsumura Masayoshi, Yamazaki Teru, and Masu Kazuya.
Although SIC will not be listed immediately, not all matters have been settled, and it may take two to three years to complete the process.
But some things can be arranged in advance, such as breaking down SIC's business into smaller pieces.
First of all, the processor chip business will be reserved for SIC. This is its main business direction and what capital in North America is most concerned about.
In addition, regarding the development of graphics chips, which ranks second within SIC, Shirakawa Kaede plans to set up a separate IMG company to be responsible for the development and design of GPUs.
The remaining driver chips, flash memory chips under development, and other industrial ICs will be handed over to the newly established TSIC.
Simply put, SIC is divided into three parts.
Processor chips, graphics chips, flash memory and other auxiliary chips are operated by three different companies.
There is no doubt that the current core is still the SIC entity, and its profits account for 95% of the net profit of the previous complete SIC.
So even if some businesses are split up, Apple and IBM will not have any objections.
Maybe they even think that this is getting rid of a burden.
For IMG, which is only responsible for GPU development, it will be difficult to see any future prospects within five or six years.
However, TSIC, which has taken over the development of flash memory and auxiliary chips, may be able to make a profit in a short period of time. After all, it already has a certain foundation.
Shirakawa Feng had just finished assigning the tasks here at SIC, and less than two days later, the Ministry of International Trade and Industry came to him again.
