"Feng, there is a UK semiconductor company. My team thinks it is a good company, and I want to acquire it."
Semiconductor company? UK?
"Oh? What's the company? What products are they producing? How much is it selling? "Feng Yu asked.
Kirilenko is hesitating and wants to ask for Feng Yu's opinion. Feng Yu's opinion is to buy out companies that he had heard of in his previous life. If he had not heard of this company in his previous life, he will not buy it unless the price is very low.
"It's a company that designs semiconductor microprocessors. Their company name is Advanced Reduced Instruction Set Processor, or ARM."
At first, Feng Yu was still nonchalant. But when he heard the acronym ARM, he sat up straight.
What? This company? This company is from the UK?
In Feng Yu's previous life, 95% of the tablet and smartphone cores are based on the ARM architecture. They are also the leader in the embedded control, multimedia, etc.
They had designed a large number of cost-effective, low energy processors and own the patents for these technologies. They even developed a lot of software.
This is a company with high technologies and potential, and Feng Yu had never thought of this company.
But there are no real tablets in the market now, and the sales of smartphones are not as good as mobile phones. As for the embedded control, multimedia, etc., they are also facing competition from other semiconductor companies. But even so, they have a large number of mobile phone cores.
But the most interesting thing about this company is they do not manufacture processors. They only license their technologies and collect patent fees.
"The shareholding structure of this company is very complicated. Many of the world's top semiconductor companies own shares in this company. But their main shareholder is Acorn Computer. This company's status in the UK is equivalent to the US's Apple."
"Apple, VLSI, Industrial Technology, Texas Instruments, Qualcomm, etc., have shares in this company. None of these companies are the controlling shareholders."
"This company is listed in London and Nasdaq. Their current market value is about 2.6 billion GBP, and their annual profits are less than 200 million GBP. My team had contacted Acorn Computer, and they agreed to sell to us. But they want a 30% premium. "
"Texas Instruments and the other companies' demands were even more outrageous. They wanted us to pay a 33% premium. Even the Fruit Company wanted to buy them, but the price offered by the Fruit Company was almost the same price, so they were rejected."
"Feng, do you think a 30% premium is worth it? The profits were too low, only 200 million pounds a year. But my team told me that we can produce our own processor cores and sell them for money. Just like Intel and AMD, we can definitely make money. "
Kirilenko had seen Feng Yu buying those semiconductor companies at high prices, and in the end, Feng Yu got high profits from those companies.
But when Feng Yu acquired those companies, most of them were non-listed companies. The market value of a listed company was obviously inflated.
Feng Yu had said that two years later, many listed companies' share prices will plunge again, and next year will be the peak of many companies' market value. Would it be a loss to buy it at this time?
"Brother Ki, my suggestion is to become the biggest shareholder of this company. But don't chase away all the other companies. Maintain cooperation and facilitate the company's technology authorization. I can ask AMD and the other companies to buy some shares, and you will have full control of the company. "
This is ARM. Not only is it developing mobile phone processors, but it is also developing STB, smart TVs, tablets, and many other products. ARM is the leader in this field.
Just the patent authorization alone was enough to guarantee them a lot of profits. Ericsson is one of the top mobile phone manufacturers in the past. But slowly, it stopped producing mobile phones.
In the future, Ericsson will specialize in the research and development of communications technologies. They will rely on patent authorization to generate high profits, and it will be safer with low risks.
"Feng, why don't you become the controlling shareholder?" Kirilenko is unhappy. Even if he cannot be the sole shareholder, he should at least acquire the company to be the controlling shareholder.
Controlling more than two-thirds of the company's shares and more than 50% of the company's shares are different.
"Brother Ki, you should know that ARM's business model is different from Intel, AMD, etc. ARM does not produce their own processors and only designs the cores. They make money from the authorization of the patents. "
"How can we authorize more companies? We cannot be boycotted by other companies. That's why ARM needs more allies. "
"This way, your patents can be authorized to more companies and be adopted by more companies. The more companies buy the authorization of ARM's patents, the more profits you will get. "
"Also, this company's operating costs will be very low. I guess the company has less than 2,000 employees now. Think about it. How many employees does Intel have? "
"There is another benefit to having a small number of employees. You will be able to withstand risks. Regardless of the rising prices of materials or other risks, as long as people are still using mobile phones and other electronic products, you all will not have to worry about profits."
"Also, the profits will be rising. The more patents you all have, the more profits you will get. This is a long-term investment and not a one-time investment."
"My investment is to help you have absolute control of the company. If you are not satisfied, I can sell these shares to you in two years' time."
Kirilenko immediately replied. "Feng, what do you mean by this? You had brought me to invest in many of the good projects you discovered. Why should I reject you if you want to invest in this company? Since you said this is more reasonable, then I will trust you. "
"How about this? I will negotiate with Acorn Computer first, and we will acquire some of the other companies' shares together. In the end, we can also let AMD and the other companies invest in us. This will expand our alliance. "
"Feng, if the Japanese companies want to buy our patents, will you sell them?"
"Of course! Why not?!" Feng Yu immediately replied. "Anyway, we are only authorizing the patents, and we are not selling them all at once. In the future, they will have to follow our architecture to produce their processors and other products. Even if they do not make money, we will still make money. "
"This way, they will slowly rely on our product architecture and lose their ability to develop their own products. Their lifeline will be in our hands."
"Brother Ki, this company's market value might increase a few times in a few years. You will not lose out if you buy it now!"
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