Chapter 113: Wolf Pack Tactics

The Japanese companies like Toshiba clearly had it all calculated. Even if they raised prices, Dongling High-Tech had no substitutes, so they dared to do so. They wanted to slaughter Dongling High-Tech like a fat sheep!

This was wanting to replicate the situation of Wan Yan VCD on Dongling High-Tech. Raising prices was definitely just the first step. Just like treating Wan Yan VCD, first constantly raising the price of parts, then selling the parts to other manufacturers making digital cordless telephones, letting them compete with Shenzhou, and finally, the profits were all taken by foreign companies like Toshiba.

Now domestically, VCDs looked hot. The entire industry's annual shipment volume had reached 6 million VCDs, and a 10-billion-level industry had been born from nothing. Didn't it look infinitely glorious?!

But in reality, just in the first half of this year, a bunch of large and small VCD production companies suddenly popped up domestically. There were 10 manufacturers with an annual output of 500,000 VCDs, 3 with an annual output of 1.5 million, and the rest of the small workshops didn't need to be mentioned.

Especially in the Pearl River Delta region, as long as you imported decoding chips, movements, and motherboards from abroad, and then bought other parts, a skilled worker could assemble 10 or 20 VCDs a day. This led to more than 200 VCD brand companies popping up domestically in one go this year. Even though they were mixed, and the quality of the machines depended on luck, the machines produced were all sold out. The frenzied market led to more and more companies killing their way into this market.

But in such a frenzied VCD market, the real profits were all taken away by Gao Bai and Yi Shi, who produced decoders, and Philips and Sony, who controlled the movements. Domestic VCD companies were basically working for these four companies. The more VCDs they sold, the higher the profits of these four companies. They wished that domestic VCD companies would break their heads selling machines. No matter what price domestic VCDs sold for, anyway, Gao Bai, Yi Shi, Philips, and Sony wouldn't lower the price of parts!

"Dongling High-Tech owns more than 70 patents for digital cordless telephones, and more than 30 patents are being applied for. Plus the patents in Ximen' hands, as long as we don't open up patent restrictions with Ximen, digital cordless telephones won't have the same flooded situation as VCDs!"

Ren Yuefeng said with a solemn expression. The biggest difference between Dongling High-Tech and Wan Yan now was that Dongling High-Tech really had patents for digital cordless telephones, while Wan Yan hadn't registered any patents at all.

Patents are sometimes unimportant, but having them is extremely important. Like the patent for electronic pet machines, it was useless to domestic counterfeit and pirated manufacturers, but placed in the overseas market, it had considerable binding force on giant companies like Bandai, Sony, and Nintendo.

Other small companies counterfeiting was no problem, at most small-scale trouble. These giant companies dared to do it—just wait to be sued for compensation. There were plenty of vulture law firms willing to do this. The compensation might be more than the money earned from selling machines!

"Regardless of whether the news Makoto Yamashina said is true or false, we must be prepared!"

Li Dongling pondered for a moment and said, "Currently, the parts Shenzhou telephones import from Japan are mainly chip motherboards, batteries, and backlight screens!

Find domestic manufacturers to cooperate with for batteries. Even if the procurement cost is higher than Sanyo's, as long as the performance and safety can reach the same level as Sanyo batteries, Dongling High-Tech will treat them as backup procurement.

Screens are the same. Find domestic manufacturers to cooperate with, or customize products. I heard that BOE in Yanjing is engaged in screen technology R&D. We can seek cooperation with them. Dongling High-Tech must establish its own industrial chain and parts supply system!"

This step was one Dongling High-Tech would have to take sooner or later, but he didn't expect it to come so quickly. Relying on Dongling High-Tech alone, it was very difficult to compete with the entire Japanese and American systems, so they definitely had to find helpers.

"Other parts, we can find substitutes domestically, but what about the chips for Shenzhou telephones?!" Gao Peng, who was in charge of Dongling High-Tech's procurement, asked with a worried face.

If other parts could still find substitutes from domestic manufacturers, or even customize R&D, then in terms of chips and motherboards, there really weren't any manufacturers domestically that could be brought out.

"Then Dongling High-Tech will develop them itself!"

Seeing the surprised gazes of the group, Li Dongling said, "Dongling High-Tech can't develop computer chips, but it doesn't dare to develop telephone chips?!"

"If we don't develop them now, Dongling High-Tech will never have its own telephone chips and will always be controlled by others!"

Ren Yuefeng and Hu Zi both hesitated to speak. In these years, it wasn't that there weren't domestic manufacturers shouting that they wanted to develop their own chips, but in the end, they all failed. Because this thing was too money-burning, and the probability of failure was greater than the probability of success.

"Perhaps we can also find other chip manufacturers to cooperate with, not only Toshiba, but also Japanese companies like NEC, Panasonic, Hitachi, Fujitsu, Texas Instruments, etc.!"

Ren Yuefeng said to Li Dongling. Currently, in the global chip industry, it hadn't reached the situation where Intel and Qualcomm dominated the computer and mobile phone chip industries like in his previous life. There were still many big and small players. Although buying chips from other overseas manufacturers wouldn't be much cheaper, they could be bought—it was just… a bit expensive.

"We can try to contact companies like NEC and Texas Instruments, but Dongling High-Tech needs to establish its own chip semiconductor company!"

Li Dongling wanting to develop Dongling High-Tech's own chips wasn't an act of anger, but something that must be done. Not only for the Shenzhou series telephones to use now, but also because in the future, whether they wanted to enter the computer, mobile phone, or other industries, they would need chips. Just say the next product Shenzhou was preparing to launch, the Xiaolingtong, and the Feiyan mini radio, also needed chip motherboards. They couldn't always be controlled by others, or even sometimes want to buy but couldn't buy the goods!

However, Dongling High-Tech developing its own chips wasn't necessarily a doomed situation. How did MediaTek develop in his previous life? At the beginning, it didn't do mobile phone chips, but did VCD, DVD, MP3, and counterfeit machine chips, growing up step by step.

Dongling High-Tech entering the chip industry, like MediaTek, the first thing it had to do was chip design. The most important thing in the chip industry was that the designed and developed chips had to have products and machines to be loaded on, and the goods had to be sold to have money to survive!

MediaTek in his previous life relied on products like VCD, DVD, MP3, radios, and counterfeit mobile phones to survive. Hisense Semiconductor, established by Huawei in 2004, also relied on mobile phones loaded with Huawei's own brand to complete its turnaround.

Compared to MediaTek, HiSilicon, and Ximen' Infineon, if Dongling High-Tech established its own chips, as long as the developed chips weren't too rotten, and didn't ask for them to be too advanced, as long as the performance was stable, it would be enough. Li Dongling was confident that he could make them appear on products like Shenzhou telephones and Feiyan radios.

Even for this, they could launch products like VCD, DVD, MP3, MP4, repeaters, point-reading machines, children's watches, etc., and let these products be sold loaded with Dongling High-Tech chips to earn R&D funding for it. In his previous life, MediaTek relied on VCD, MP3, and counterfeit mobile phones to survive. There was no reason Dongling High-Tech's chips couldn't survive. If one product couldn't support Dongling High-Tech's chips, then launch a group!

Seeing that Li Dongling had made up his mind to let Dongling High-Tech establish its own chip semiconductor company, Ren Yuefeng and others, although they were all somewhat worried, began to get busy according to Li Dongling's instructions, looking for domestic parts suppliers and preparing to build Dongling High-Tech's chip department.

Ning Wenge, who saw today's scene, looked at Li Dongling blankly. Facing the raised butcher knives of several world-class giant companies like Toshiba, Sharp, and Panasonic in Japan, how many companies in the Asian region dared to resist?!

But today, Ning Wenge saw one. Dongling High-Tech not only dared to resist this butcher knife, but Li Dongling actually wanted to establish Dongling High-Tech's own chip brand. This kind of determination and courage was something Ning Wenge had never seen in Hong Kong.

"Ning Zong, thank you for your support this time!"

Until Li Dongling appeared in front of her, Ning Wenge reacted, avoided Li Dongling's gaze, and looked out the window, which finally calmed her heart, "Ning's Trading Company and Dongling High-Tech are partners, so we should naturally support each other!"

"Li Zong really has great courage. In Hong Kong, the mainland, and even Taiwan, there aren't many companies that dare to engage in chip R&D. Even South Korea only started R&D with the support of America!" Ning Wenge turned her head and looked at Li Dongling.

"Man proposes, God disposes!"

Li Dongling looked at Ning Wenge, "Some things, if you don't do them, you will never have a chance!"

"Please stay, Ning Zong. Actually, there is one more thing I want to discuss with you."

Hearing Li Dongling's words, Ning Wenge showed some surprise, "Please speak!"

Looking at Ning Wenge in front of him for a few moments, Li Dongling took out a document and pushed it in front of Ning Wenge, "Dongling High-Tech is prepared to establish its own sales channels in Europe. I hope Ning's Trading Company can be with Dongling High-Tech."

Pulling Ning's Trading Company to do it together was mainly to use Ning's Trading Company's name. Ning Wenge flipped through the document in her hand. Seeing the acquisition of France's Boulanger electrical appliance mall, plus dozens of retail stores, with a total cost of nearly 200 million USD, Ning Wenge was also taken aback.

Then she kept calculating this acquisition in her mind. Li Dongling's plan was definitely risky. In reality, it was betting on whether Dongling High-Tech and domestic home appliance and electrical appliance companies could develop. If they could develop, then this acquisition would be a profit, selling domestic electrical appliances overseas. If they couldn't develop, they might lose a large sum of money in the end.

"Ning's Trading Company is willing to join this acquisition, but not just by name. Ning's Trading Company is willing to invest 20 million USD. If the acquisition is successful, Ning's Trading Company hopes to get 15% equity in this electrical appliance chain mall in Europe!"

Li Dongling looked at Ning Wenge in front of him. Ning Wenge also responded with burning eyes. In the end, it was Li Dongling who moved his gaze away, "Ning Zong, the risk of this acquisition is very high. I cannot guarantee that we will definitely make money in the end!"

"I know!"

(End of chapter) ===== CHAPTER 114 =====