Tech Giants: Starting from Bankrupt Companies

221: Chapter 221 The Four-Pole Layout, the Nobles Bow DownMeeting Room 2 was minimalist in style, with a map of Southeast Asia hanging on the wall.

The Malaysian delegation was led by Digital Minister Azmin, a fifty-year-old technocrat who spoke directly.

’Mr. Zhang, let’s get straight to the point,’ Azmin said, his English carrying a Malay accent. ’Malaysia doesn’t want to work for the foundries in Taiwan forever. We want to become the electronics manufacturing hub of Southeast Asia and build our own brand.’

He pulled up the data:

Current electronics industry in Malaysia: accounts for 25% of GDP, but 90% is OEM.

Major clients: Apple, Dell, HP.

Profit margin: 3-5% on average.

Goal: Within ten years, increase the share of independent brands to 30%.

’Spark’s technology is the ladder for us to skip ten years,’ Azmin said. ’We provide the money, the land, and the policies; you provide the technology, the brand, and the management.’

Specific plan:

Malaysian state-owned capital invests 500 million USD, holding a 20% stake.

Provide 300 mu of industrial land in Penang, tax-free for 10 years.

Spark transfers mid-to-low-end mobile phone production line technology and some communication protocols.

Products can enter the ten ASEAN countries (population 650 million) tax-free.

The focus of the negotiation was the scope of technology transfer.

The Malaysian side wanted 14nm chip technology, but Zhang Yang firmly refused: ’That is a strategic asset and will not be transferred. However, we can provide authorized designs for 16nm chips, as well as secondary manufacturing technologies for camera modules, batteries, and screens.’

’16nm is enough,’ Azmin said pragmatically. ’It’s one generation more advanced than the 28nm we are currently using. But we want the complete technology package, including training engineers and establishing an R&D center.’

’That’s fine,’ Zhang Yang said. ’We will build a ”Spark-Malaysia Joint Research Institute” in Penang to train local engineers.’

’There is one more condition,’ Azmin said. ’Five years from now, the Malaysian factory must have the ability to independently design mid-range mobile phones. You need to teach us, not just let us assemble things.’

Zhang Yang thought for a moment: ’That’s fine. But for the products designed, the brand must be ”StarFire-Malaysia,” and Spark has the right of first refusal for procurement.’

’Deal.’

As the two sides shook hands, Azmin remarked with emotion: ’Thirty years ago, Japanese companies came to Malaysia and only let us do the lowest-end assembly. Twenty years ago, Taiwanese companies came; it was a bit better, but still a technological blockade. Today, Spark is willing to teach us real technology. This is the difference in vision.’

Zhang Yang said earnestly: ’Because Spark believes that only when our partners are strong can we be stronger. We are not doing colonial-style expansion; we are doing symbiotic development.’

This sentence was recorded by Malaysian reporters and became the headline the next day.

Meeting Room 3 had the most distinctive feature—vodka and caviar were placed on the long table.

The Russian delegation was of a very high level: Minister of Industry Denis led the team in person, followed by the Mayor of Moscow, the Governor of Kaliningrad Oblast, and the Vice President of Rostec.

’Mr. Zhang, we are a fighting nation, and we speak directly,’ Minister Denis, in his fifties with a burly build, said in forceful Russian-accented English. ’Russia has resources—oil, natural gas, minerals. We have a market—140 million people. We have land—Siberia, as much as you want. But we don’t have consumer electronics brands.’

He poured two glasses of vodka and handed one to Zhang Yang: ’The West sanctions us, but we do not kneel. You have also been sanctioned by America; we are in the same boat. Let’s cooperate to counter hegemony.’

Cooperation plan:

The Russian side invests with land, energy concessions, and tax exemptions, holding a 20% stake.

Build a ’Spark-Russia Innovation Industrial Park’ on the outskirts of Moscow, with the first phase covering 1,000 mu.

Initial production of mobile phones, televisions, drones, and wearable devices.

Spark transfers low-end chip design capabilities and basic communication technology (specifically transferring 28nm technology and providing authorized designs for 16nm chips).

Products can enter the Eurasian Economic Union (Russia, Belarus, Kazakhstan, etc., population 180 million).

’We have one more advantage,’ the Mayor of Moscow added. ’Russia’s education in mathematics and physics is strong, and our engineers are of high quality. You provide the technology, we provide the talent, and we can engage in joint R&D.’

Halfway through the negotiation, Minister Denis suddenly lowered his voice: ’Mr. Zhang, let me ask you privately: your drones... can you come to Moscow to build a factory?’

Zhang Yang understood immediately: ’What are you referring to?’

’Our northern border line is too long, and it’s minus fifty degrees in winter. It’s very hard for soldiers on patrol,’ Denis said. ’We need drones that can work in extreme environments, with long endurance, anti-jamming capabilities, and preferably... some ”military capabilities.” We hope to emulate your cooperation model with Saudi Arabia and establish a defense company in Moscow to produce military equipment.’

Zhang Yang nodded: ’We can cooperate. But we need to coordinate with Xingchen Military Industry. You can discuss this in detail with others after the exhibition ends in a few days.’

’Can the ”thunderbird 3” reconnaissance drone, ”wasp m2” intelligent attack drone, and ”rhino a2” heavy attack drone technologies be licensed for cooperation?’

’As long as the conditions you offer are suitable, these can all be discussed,’ Zhang Yang replied.

After the business was discussed, the two sides clinked glasses.

The vodka was downed in one gulp.

Denis patted Zhang Yang on the shoulder: ’Zhang, you Chinese people value ”a friend in need is a friend indeed.” When the West sanctioned us, only Chinese companies dared to come and invest. Russia will remember this kindness.’

Zhang Yang also said sincerely: ’Spark’s principle is: when friends come, there is good wine; when jackals come, there are shotguns. Russia is a friend.’

This sentence was widely reported by Russian media later and became a golden phrase for China-Russia technological cooperation.

Meeting Room 4 was the largest and most formal.

The European Union delegation had a luxurious lineup: French Minister of Economy Jean-Pierre, Deutsche Telekom CEO Timotheus Höttges, Ericsson Global President Börje Ekholm, new Nokia CEO Pekka Lundmark, the Spanish Minister of Industry, and others, totaling more than twenty people.

The atmosphere was a bit subtle at the beginning.

French Minister Jean-Pierre, 58, with his silver hair meticulously combed, began with a French arrogance:

’The European market has the strictest environmental standards, data privacy laws, labor protection, and product quality requirements. Many Asian companies have failed here. But Europe is also willing to accept true innovators—if you can meet our standards.’

Zhang Yang was neither servile nor overbearing: ’All of Spark’s products have passed EU CE certification, RoHS environmental certification, and GDPR data privacy assessments. Our factories comply with the ISO14001 environmental management system. Mr. Minister, please rest assured.’

The French representative was the first to propose cooperation conditions.

First item: Build a factory in France.

Jean-Pierre promised: The French government will provide 500 mu of industrial land in Lyon and cover all infrastructure construction costs (roads, water, electricity, network). Spark only needs to bring in equipment. For the first five years after the factory goes into production, corporate income tax will be fully exempted.

’Products can be labeled ”Made in France,”’ Jean-Pierre emphasized. ’This is very important for opening up the European market. European consumers recognize the quality and taste of ”Made in France.”’

’Agreed,’ Zhang Yang said. ’But we require management and control of the factory.’

’That’s fine, but the French side must hold a 25% stake.’

’15%.’

’18%.’

’Deal.’

Second item: Technology licensing.

Nokia CEO Pekka was the first to challenge: ’We need the imaging algorithms and battery management technology of the Huaxing Mobile Phone. We also want to purchase Spark’s chips, camera modules, screens, and batteries.’

Zhang Yang: ’Algorithms can be licensed, but the core code will not be opened. Hardware can be purchased, but there is a minimum annual purchase requirement.’

Ericsson President Börje: ’We need the right to secondary development of 5G base station chips, as well as authorization for some 5G communication technologies.’

Zhang Yang: ’chips can be customized, but the architecture will not be open. 5G patents can be cross-licensed, but Spark’s core patents are not included.’

Deutsche Telekom CEO Timotheus: ’We need a batch of customized phones, pre-installed with our service packages, to be sold by us in Germany.’

Zhang Yang: ’That’s fine. Minimum order is 1 million units.’

The negotiation was deadlocked for two hours.

The key disagreement was on ’technology openness’.

The European Union wanted Spark’s 7nm chip technology, AI algorithm core, and military-related technology.

Zhang Yang’s bottom line was very clear: Absolutely not open.

’This is our lifeblood,’ Zhang Yang said firmly. ’Just like Airbus won’t open its aircraft engine technology, and ASML won’t open its EUV lithography machine technology. We can cooperate, but we cannot hand over the core.’

Jean-Pierre finally compromised: ’Fine. But you must set up an R&D center in Europe, hire European engineers, and put some R&D work in Europe.’

’That’s fine,’ Zhang Yang nodded. ’We plan to build an AI algorithm research institute in Munich and establish a mobile phone design center in Paris.’

Third item: Market access.

The five European Union countries (France, Germany, Italy, Spain, Netherlands) promised: As long as the Lyon factory goes into production, Spark products will immediately enter the market under the ’Made in EU’ standard and enjoy duty-free treatment.

Fourth item: Patent exchange.

Nokia opened its 2G/3G basic patent pool in exchange for authorization of some of Spark’s 5G patents. This is a win-win—Spark gains basic patents, and Nokia gains advanced patents.

The negotiation lasted from 3 PM to 6 PM, and a package framework agreement was finally reached.

When signing the memorandum, Jean-Pierre suddenly said: ’Mr. Zhang, I heard you are working on rockets?’

Zhang Yang was stunned: ’Yes, Star Rocket.’

’Europe has Arianespace,’ Jean-Pierre smiled. ’Perhaps... we can talk about space cooperation. Europe’s market in exchange for some of your aerospace technology.’

Zhang Yang was shocked, but calm on the surface: ’This needs to be decided by Mr. Su. I will convey it.’

As he left, Deutsche Telekom CEO Timotheus sighed to his assistant: ’Twenty years ago, we taught the Chinese how to do communications. We sold equipment, and they bought it. Today... it’s the other way around. They sell technology, and we beg for cooperation.’

The assistant asked in a low voice: ’Then... have we lost?’

Timotheus shook his head: ’No, this is called adapting to a new era. Stubborn nobles will decline, and flexible merchants will survive. Spark is the former, and we are learning to be the latter.’