Shockingly, a counterfeit factory has produced a 3-nanometer chip.

Chapter 38 Finalizing the Investment

"I think this move could make it a great company, but it's still too slow to develop."

But this happens to be our expertise. Transsion has a market network, on-the-ground sales experience, and low-cost manufacturing capabilities in Africa, and these capabilities are equally applicable in the Chinese and European markets.” Shen Fei cited several examples.

"Furthermore, Huawei is short of money. Its terminal business burns through billions of dollars in R&D expenses every year, and the market is nearing its peak. It urgently needs to open up new businesses, but the mobile phone market does not seem to be going as smoothly as usual."

Transsion lacks technology. In Africa, we can win over customers with cost-effectiveness and localized adaptations, but if we want to enter the European and American markets, this technology is not enough.

Ren Zhengfei, being an excellent listener, nodded attentively, but his expression remained unreadable.

After Shen Fei explained all the technology and some of the bargaining chips, he finally spoke up and said, "So you want to use the money from the telepathic communication to exchange for Huawei's technology."

"Not entirely." Shen Fei put down his teacup.

"I want to establish a deeply integrated partnership."

Transsion's investment in Huawei's terminal business is not a financial investment, but a strategic collaboration to create a better future.

We can share our R&D results, such as our self-developed systems and chips, which Huawei can use normally.

We can even develop the system together, and we can purchase Huawei's communication and high-end technologies at cost price.

When Shen Fei mentioned the self-developed system again, Ren Zhengfei's eyes trembled slightly.

That big mouth had also mentioned the self-developed system to him, but he always felt that he was a little unsure about it.

Especially since the mobile phone business built on Huawei's terminals had not yet taken off, these issues were considered too early, so he temporarily suppressed them.

Although this is the best time.

"Self-developed chips and systems? I've also read the outline of Project Taishan; their ambitions are quite high."

But does Chuanyin currently possess that capability?

"The system isn't available right now, but the chip is perfectly fine," Shen readily admitted.

"Mr. Huang has already poached a lot of technical personnel from abroad on behalf of Huaxin Investment."

Furthermore, we have ample testing grounds in Africa where we can experiment, iterate, and train our own technical personnel.

Even if the chips are substandard, we can still use them. Once we've perfected the chips and systems in the African market, Huawei can use them domestically. With our self-developed chips and systems, we can easily capture the domestic market.

Just as Ren Zhengfei was considering the possibilities, Shenfei presented another important predictive data.

"This is our sales forecast for Transsion for the next three years. By 2011, our annual sales in Africa will exceed 4000 million units, and globally it will exceed 5000 million units."

Total sales over three years will be between 1.2 million and 2.2 million units.

This size is sufficient to support an operating system ecosystem and also sufficient to reduce the R&D costs of chips.

Meanwhile, we predict that starting in 2010, the world will enter the era of smartphones, with operating systems and chips becoming fiercely contested areas.

Ren Zhengfei looked at those numbers and began to think seriously.

Technology is the future; this is the goal within Huawei. The clock on the office wall swings back and forth, and time passes second by second.

"$22 billion, 49% stake, Huawei retains controlling interest."

Ren Zhengfei made up his mind and gave his answer.

"This is the bottom line we've reached through our discussions. Originally, we weren't planning to sell, but Mr. Shen's plan is indeed very suitable. I also have faith in Transsion's self-developed technology, and even more faith in the future you've envisioned."

"If it's 49%, then I can only offer $20 billion. If it's 50%, we can give a higher valuation."

Shenfei also presented its corresponding conditions: "We want an equal voice, but we can sign a consensus agreement. We will provide voice support to Huawei's management on major decisions."

Whatever the decision, as long as there's no risk of bankruptcy, it's acceptable.

Furthermore, we pledge that we will not use capital means to support or seek control.

This condition was still very suitable, which puzzled Ren Zhengfei greatly. Why was Chuanyin unwilling to back down, yet also unwilling to take control?

"I don't care about decision-making power; you paid money, so you should enjoy a certain amount of power. But I'm curious, why do you insist on 50%?"

"Because only deep integration can truly achieve collaboration."

Shen Fei stared at Ren Zhengfei as well: "If we are just a small shareholder, the Huawei terminal team will not open up the real technology to us, and Transsion will not reveal its self-developed chips and systems."

Only when our interests are completely aligned can we work together, back to back, to change the situation of lagging behind in domestic technology.

He gave Ren Zhengfei a moment to catch his breath before offering new temptations.

That's quite a compliment.

"Mr. Ren, you know better than I do that the second half of the mobile phone industry is an ecosystem war. Apple is pushing their iOS system, Samsung is focusing on the entire industry chain, and Google is also promoting their Android system."

Chinese companies must band together if they want to break through the current situation.

"Transsion and Huawei are joining forces. You tackle the signal issues, and we'll solve the corresponding design architecture for our self-developed systems and chips. This is a win-win situation."

Ren Zhengfei didn't say anything, but stood up, walked to the window, and gently lit a cigarette.

He hadn't smoked in a long time, only occasionally having one during important meetings like this.

The view from the window is a panoramic view of the science park. As the most developed place in China, it is now filled with high-rise buildings and seems to be comparable to those abroad.

The rise of this city is due to the continuous efforts of countless companies like Huawei and Transsion.

"The terminal business was a mess to begin with." Ren Zhengfei said to Shenfei with his back to him. "We lost money every year before, and just when we were about to turn a profit, we were hit by the economic crisis."

The team is currently experiencing some turmoil, and the mobile phone products are not competitive. Many people on the board want to sell the company to cut their losses.

"But you don't want to sell." Shen Fei said, seeing Ren Zhengfei pacing back and forth and smoking.

"Because Mr. Ren, you also believe that consumer electronics is the future and the best carrier for communication. If Huawei misses out on the mobile phone market, it will miss out on the next 10 years."

Ren Zhengfei nodded unconsciously, turned around, and looked at him with a complicated expression: "22 billion US dollars, 50% of the shares..."

Mr. Shen, do you know what this means?

Transsion is going to invest several times its own capital to buy a business that is still losing money.

"I know." Shen Fei also stood up and walked to the window.

"But I know even more that if I don't buy it now, I won't be able to buy it even if I spend 400 billion in 5 years."

The true essence of the workplace lies not in the experience of reading financial statements, but in the minds of engineers and in their communication patents.

The future possibilities for the Huawei brand.

Investing is gambling, but I believe I can win.