Chapter 584: A $2.2 Billion Dog Bone! Magnetic Confinement Discharge Excitation Method, Bypassing LPP Technology!
The next morning, the sky was clear and cloudless.
Just after nine o'clock, Zhang Weili, President of MediaTek Dahua Region, appeared at the front desk of Orange Technology's headquarters with his assistant.
"Hello, Mr. Zhang. I am Guo Shenyi, Mr. Chen's assistant. Please follow me."
When Guo Shenyi saw Zhang Weili and his group, he immediately greeted them with a smile.
"Excuse me, Assistant Guo."
Zhang Weili nodded in response.
This was his second time in Xucheng, both times to promote MediaTek's mobile processors.
He knew that there would be a supply gap after Orange Technology and Qualcomm canceled their cooperation.
This is a once-in-a-lifetime opportunity for MediaTek.
You should know that Orange Technology and its group of younger brothers purchased as many as 200 million chips throughout the year. Except for a small number of Tiangong A100 chips, the rest were mainly Snapdragon 800, MT6599 and Tegra 4H.
Now that Qualcomm is out of the game, whoever can grab the order first will be able to increase their market share in China and even Asia.
This is also the main reason why he traveled day and night to come to Xucheng!
I'm afraid that if I'm a step behind, Nvidia will overtake me.
Guo Shenyi led Zhang Weili and others to the top floor by elevator, then walked to an office and knocked on the door.
"Enter!"
A steady and heavy voice came from inside the door.
With a "crack" sound!
Guo Shenyi slowly pushed the door open, then said to Chen Yansen who was sitting on the sofa, "Boss, Mr. Zhang is here."
Zhang Weili stepped inside with a smile on his face. Just as he was about to say hello, he saw the man in leather jacket sitting opposite Chen Yansen - Nvidia's Huang Renxun.
"This old dog runs really fast!"
Zhang Weili snorted coldly, cursing inwardly. He then stepped forward, grasped Chen Yansen's right hand, and said eagerly, "Mr. Chen, sorry to bother you! After hearing about Qualcomm's shameless behavior, I immediately denounced this monopolistic behavior. Please rest assured that MediaTek absolutely stands by Orange Technology. We will fully support the subsequent chip supply and technical adaptation!"
Chen Yansen shook the man's hand gently, his eyes sweeping between him and Huang Renxun, who was sitting on the sofa. He said casually, "Please sit down. Mr. Huang just talked to me about the new supply plan for the Tegra series."
Huang Renxun also stood up at this time, raised the teacup in his hand towards Zhang Weili, and said with a smile, "Mr. Zhang, you came at the right time. It's a good opportunity for us to listen together and see whose proposal is more to Mr. Chen's liking."
There was a lot of provocation in Lao Huang's words.
Because he knows the background of MT6599, its performance is at most on par with Snapdragon 800.
Is MediaTek qualified to compete with Nvidia?
Let’s go back and build a processor that can rival Tegra 4H first!
Zhang Weili frowned slightly. MediaTek is naturally not afraid of Nvidia in the low-end and mid-range fields, but in the high-end field, MT6599 is really no match for Tegra 4H, at least in terms of multi-tasking and graphics processing performance.
"Tegra 4H has good performance, but what about the price-performance ratio?"
Zhang Weili asked back.
If you can’t compete on performance, then compete on price!
How did MediaTek gain a foothold in the mobile processor industry?
Of course it is the high quality, low price and stable production capacity!
After hearing this, Huang Renxun immediately understood what Zhang Weili was thinking.
"How can we talk business while standing?"
Chen Yansen took the lead and sat down, speaking to the two of them.
A cold look flashed across Huang Renxun's eyes, then he smiled faintly and sat down.
Zhang Weili followed suit and sat down.
"Mr. Zhang, try this new tea."
Chen Yansen poured a cup of hot tea and pushed it to Zhang Weili's desk.
"Thank you, Mr. Chen." Zhang Weili thanked him politely.
"I have discussed with Xiaomi, 360, NetEase, Meitu, and LeTV that within the next year, we will completely abandon Snapdragon processors, so there will be a procurement gap of 2 billion US dollars."
Chen Yansen picked up the cup, took a sip and said.
"Mr. Chen, your estimate is inaccurate. I think it should be 1.9 billion US dollars."
Huang Renxun's leather jacket was open, revealing the printed short T-shirt underneath, and he retorted with a smile.
What he meant was that as long as the order was given to Nvidia, he was willing to give an additional five percentage points discount on the supply price.
Chen Yansen understood immediately.
Zhang Weili, standing by, also reacted and said without hesitation, "1.8 billion US dollars."
If you want to grab the market, you can’t be afraid of losing money!
Once 40% of China's smartphones use MediaTek processors, the potential impact will be immeasurable.
Once other mobile phone manufacturers see this, they will most likely follow suit and purchase it.
The higher the market share, the easier it is to leave an impression on users: MediaTek's products have better performance!
Chen Yansen remained silent, concentrating on drinking his tea, allowing Zhang Weili and Huang Renxun to lower the price on their own initiative.
He holds the Tiangong B100 and Tiangong C100 chips in his hands, so he is not afraid that Nvidia and MediaTek will take the opportunity to raise prices.
Even if Orange Technology does not cooperate with Qualcomm, does not use Snapdragon processors, and does not purchase MT6599 or Tegra 4H, there are still chips available.
On the contrary, Zhang Weili and Huang Renxun might work together to raise prices.
When Huang Renxun heard Zhang Weili report the figure of "1.8 billion US dollars", his right hand holding the teacup paused, and the smile in his eyes faded a little.
He guessed Zhang Weili's intention. He was determined to grab the market and would rather give up profits in the short term to keep the market share.
Although Tiangong B100 and Tiangong C100 are about to be released, it takes time to make masks, tape out wafers and achieve mass production, and it is also necessary to coordinate the production capacity of TSMC, GlobalFoundries and UMC.
But Nvidia can't give in!
If MediaTek gets this huge order, the chip landscape in China's smartphone market will probably change, and it will be difficult for Nvidia to squeeze in.
After finally having a Tegra 4H, he saw the hope of Nvidia's rise in the mobile processor market. He couldn't just give the opportunity to MediaTek, right?
After all, if the other person eats one more bite, you have to eat one less bite.
"1.75 billion US dollars." Huang Renxun put down his teacup and said firmly, "And Nvidia can guarantee that the mobile phone manufacturers around Orange Technology will not be short of chips."
He paused and continued, "Tegra 3L far outperforms MediaTek's MT6592 and MT6572 in terms of performance. On the price front, I can compromise even further, offering a price five points lower than MediaTek."
Tegra 3L?
Zhang Weili was stunned, his face darkening as he cursed inwardly, "Nvidia isn't just trying to grab the high-end market, they're also trying to take over the low-end market. Aren't they afraid of starving you to death?"
His heart tightened, but he didn't panic.
He took a deep breath, looked up at Chen Yansen, and said in a resounding voice, "1.7 billion! MediaTek can also ensure a stable supply and provide free chip debugging services to mobile phone manufacturers. If there are any new technical requirements in the future, we will also be the first to adapt!"
As soon as these words came out, Huang Renxun's face turned cold.
In order to get this business, MediaTek almost squeezed its profits to the lowest level.
He couldn't lower the price any further; if he did, he would really lose money.
In an instant, all three of them fell silent.
The office was so quiet that only the occasional sound of wind blowing outside the window could be heard. Zhang Weili and Huang Renxun stared at Chen Yansen, waiting for his final statement.
Chen Yansen drank his tea leisurely, seemingly unaware of their expressions. After a long while, he said calmly, "I see your sincerity.
But the final choice still depends on whose solution best meets Orange Technology's purchasing needs. Price, production capacity and technical support are all essential."
Upon hearing this, Huang Renxun frowned, gritted his teeth, and added unwillingly, "Mr. Chen, although NVIDIA can't lower the total price any further, we can promise to shorten the delivery cycle from 60 days to 45 days. If there is a need for chip iteration in the future, our R&D team can work with Orange Technology to advance simultaneously and strive for leading product performance."
This is the greatest sincerity he can show, because shortening the delivery cycle means coordinating with the OEM factory to prioritize production and investing additional manpower to monitor the production progress.
Zhang Weili's lips curled up slightly after hearing this. He knew that Nvidia had no room to lower its price, so he struck while the iron was hot and said, "Mr. Chen, MediaTek can also deliver within 45 days. If there is a delivery delay, we will compensate you with 0.1% of the total order amount for each day of delay."
Damn it!
We are all from Taiwan. Is it necessary to be so cruel?
Huang Renxun glared at Zhang Weili fiercely and almost cursed out loud.
Chen Yansen waited for more than ten seconds without saying anything. Seeing that Huang Renxun refused to lower the price, he smiled and said, "Orange Technology has always maintained a good cooperative relationship with MediaTek and NVIDIA. There is really no need to damage the relationship with just a few billion orders.
How about splitting the bill and giving each of us half?"
"Mr. Chen, 1.7 billion US dollars is no problem for Nvidia." Huang Renxun thought for a moment and increased the bet again.
He wants both the high-end market and the mid-to-low-end market.
He even wanted to use Tegra 3L to kick MediaTek's processors out of Orange Technology's supply chain.
By then, both big fish and small fish will be eaten!
"Tegra 4H is responsible for high-end models, while Tegra 3L is suitable for mid-range and low-end models. This can meet the needs of Orange Technology and its partners across all price ranges at once. You no longer need to worry about coordinating two supply chains, and efficiency can be greatly improved."
Huang Renxun continued.
"Mr. Huang, you're biting off more than you can chew. The Tegra 3L should have just been taped out, right? Has it undergone extensive performance testing? What if there are minor issues like overheating or insufficient computing power? Wouldn't that cause more trouble for Mr. Chen?"
Zhang Weili asked sinisterly.
His words were meant to remind Chen Yansen that compared with Tegra 3L, the market-proven MT6592 and MT6572 are more reliable.
Take Snapdragon 810 as an example. Wasn’t it tested before production?
In fact, there is a disconnect between the test scenario and actual use!
Qualcomm's preliminary tests are usually conducted in a constant temperature laboratory, using a test motherboard without any body restrictions, and the test scenarios are mostly single high-load tasks, such as continuous running points, single video decoding, etc.
This is not the mixed load state actually used by users, such as the simultaneous running of "game + background download + positioning + 4G networking", which causes some potential heating problems to be concealed.
"Mr. Zhang makes sense." Chen Yansen nodded.
Huang Renxun was anxious when he heard this and quickly explained, "Mr. Chen, NVIDIA has conducted comprehensive performance testing on the Tegra 3L and simulated a large number of heavy-use scenarios. The supply price is on par with the Snapdragon 600 series, but the performance is improved by 15%."
"So I said, split the order. I will purchase Tegra 3L and MT 6599. MT6592 and MT6572, including the Tegra 3L, will continue to be important electronic components of the Orange series in 2014."
Chen Yansen leaned back and spoke slowly.
Now that the price has been agreed, of course we have to ensure the user experience of the Orange phone.
Tegra 4H and MT 6599 can both be used in the Orange series, while Tegra 3L and MT6592 can be used in the Green Orange series.
After Tiangong B100 and Tiangong C100 are put into mass production and use, they can be equipped with different processors for different regions.
In China and Southeast Asia, the main chips are Tiangong and MediaTek, while in Europe and the United States, the main chips are Nvidia, supplemented by Tiangong chips.
Once users gradually accept Tiangong's products, it will not be too late to slowly increase market share.
Huang Renxun saw that Chen Yansen clearly wanted to split the purchase order, but that Chen Yansen was also willing to buy the Tegra 3L. His eagerness faded slightly, but he couldn't help but ask, "Mr. Chen, the Tegra 3L has advantages in both performance and price. What's the purchase quantity you can set for the Qingcheng series? If the quantity is too small, it will be difficult for us to coordinate production scheduling with the foundry."
He still held a glimmer of hope in his heart, wanting to slowly squeeze MediaTek's space in the mid- and low-end market by purchasing in sufficient quantities.
"For the Orange series, 20 million Tegra 3L and 20 million MT6592 units each will be produced. This will not only validate the market performance of Tegra 3L, but also ensure MediaTek's interests, so that neither party will suffer losses."
"For the Orange series, 10 million each of Tegra 4H and MT6599 will be produced. Orange models in the European and American markets will prioritize Tegra 4H, while those in China and Southeast Asia will primarily use MT6599. The ratio will be adjusted based on user feedback."
"In addition, I will also include the purchasing needs of Xiaomi, 360, NetEase, Meitu, and LeTV in the contract, ensuring that each company's revenue is no less than 1 billion US dollars."
Chen Yansen picked up the teacup and took a sip, then divided the cake and took the initiative to increase the purchase quantity.
The aforementioned $2 billion USD argument was just a dog bone he threw out to force Huang Renxun and Zhang Weili to make concessions.
For specific purchase contracts, the most accurate figures can only be given by coordinating the annual estimated shipment volumes of all parties.
After the three of them reached a preliminary consensus, the next issues became easy to discuss, which were nothing more than demand inventory, product debugging, and confirming the purchase quantity of each processor.
At 3 p.m. that day, witnessed by the media, Orange Technology, NVIDIA and MediaTek signed a procurement cooperation intention, and the announced contract amount was US$2.2 billion.
Chen Yansen's move, firstly, let the market know the diversity and stability of Orange Technology's supply chain layout, and secondly, completely announced the end of the Qualcomm era.
Paul Jacob received the message quickly. He didn't expect that his suppression would arouse the opponent's ferocity. Without any hesitation, he decisively kicked Qualcomm out.
"We'll see! I want to see if Orange phone sales can break 100 million units like they did in 2013!"
Paul narrowed his eyes, looking ready to watch a good show.
The other side.
Chen Yansen had just finished dealing with Huang Renxun and Zhang Weili when Lin Nan, the chief scientist of Xingyuan Technology's Optical Research Laboratory, called and said, "Boss, we've finally figured out the magnetic confinement discharge excitation method you proposed last time!"
The seemingly calm tone reveals an indescribable excitement!
This means that Star Source Technology can bypass the mainstream laser-stimulated plasma light source (LPP) method and obtain a new EUV light source excitation method.
(End of this chapter)
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