YM778.TV Chapter 1034 - Hardware
The PC industry will develop rapidly, and the profits will be high in the coming few years. Feng Yu owns Lenovo Group’s shares now, but he is not satisfied with their current progress.
Lenovo Group is currently ordering components from hardware manufacturers, and they are producing some unimportant components like cooling fans. How much can they earn?
Lenovo Group’s PCs are selling fast, and after they had controlled the Chinese market, they set their sights on the overseas market. Their first target is Southeast Asia and a few developed countries in Asia.
Lenovo’s PC business was growing fast and had made some profits. However, a company’s profitability can be seen from the company’s market value.
Intel is currently worth over 400 billion USD and is the leader in the hardware industry. Lenovo’s market value is nowhere close to them.
This also means that the more PCs are sold, the more Intel earns. Intel controlled the processor, the most expensive component of a PC.
Why does Feng Yu want to acquire Nvidia? It is because he wants to have control over the critical hardware components of a PC. This will lower Lenovo’s cost and increase their competitiveness.
Feng Yu’s original plan is to acquire a company that produces Processing Units. But the market is controlled by the top two processors producers, Intel and AMD. Intel’s market value is over 400 billion, and AMD is worth over 50 billion.
Feng Yu cannot afford to buy out or buy the majority stake in any of these two companies. But Feng Yu will start acquiring AMD’s shares after he sells away his Microsoft shares next year.
Also, Feng Yu had invested and built his Crystalline silicon factory, and this factory can cooperate with AMD. He has plans to set up the world’s biggest Crystalline silicon factory and control the price of semiconductors. This way, he can suppress Intel.
Feng Yu’s next target is a hard disk, and he had contacted a company. This is a Fortune 500 company, and he is not going to acquire this company or buy a stake in it. This company is doing well now, and no shareholders will sell their shares.
But this company is planning to develop and enter the tape technology industry. Thus, they are selling their hard drive business.
Feng Yu had sent his men to talk to them before he comes to the US, and his original plan is to buy this company’s hard drive’s technologies, including the related patents.
But the company wants to sell its hard drive division to Feng Yu. This includes the production, development, sales, etc. and all related technologies and patents as a package. Or else, they will not sell it!
This company is Quantum and will be very successful in the future.
Their hard drive technologies are quite advanced, and they wanted a reasonable price of 120 million USD for their hard drive division. Ralph had evaluated Quantum’s hard drive division, and it is worth around 100 million USD.
Quantum’s hard drive technologies are not as good as Western Digital, Seagate Technology, Maxtor, and Samsung. Still, they are on the same level as Hitachi and Toshiba.
Feng Yu is satisfied with the price as he wanted the technologies. He will bring these technologies back to China and set up factories to produce hard drives.
Feng Yu will not suffer any losses as Lenovo require hard drives for their PC, and he can also use the technologies from this company for his USB drive.
Lenovo had bought the mouse and keyboard technologies, and Feng Yu does not need to worry about that.
Wind and Rain electronics and Philips LCD technology are currently one of the world’s most advanced technology, and only a few companies like Sony, Samsung, Panasonic, can compete with them.
But Feng Yu is confident that these few companies will fail as he has a plan to lead these companies down the wrong path.
One week later, Feng Yu bought all the companies he wanted. Although he had spent a lot, he felt his money are well spent!
Feng Yu decided to start a PC revolution with Lenovo Group. They will lower the prices of the desktop by 20%, and PC manufacturers without enough funds will be in trouble.
If PC manufacturers continue to manufacture PCs, they might not make money or even suffer losses. But if they stop production, all their efforts over the past few years will be in vain.
When the PC manufacturers are in a dilemma, Lenovo will seize the opportunity to become the world’s top-selling PC manufacturer.
In Feng Yu’s previous life, Lenovo will become the world’s largest PC vendor by unit sales many years later. But in this life, Feng Yu will shorten the time. As long as Lenovo’s PC has better specs, their sales will increase. His target is to make Lenovo the number one PC manufacturer within eight years!
Of course, to achieve this target, Feng Yu must ensure all his hardware companies have the most advanced technologies in the world with the least cost.
Feng Yu’s next step is to set up a few large production plants in China to produce these hardware products. This will also bring in income for China, and China’s labor cost is still lower.
There are other countries with lower labor costs, like Brazil, India, etc. but the security there is quite bad. Feng Yu still feels his country is the better option.
Of course, Feng Yu will keep the factories in the US. Once the production costs had been lowered to a certain extent, labor cost might be lower than the transportation costs. This is the reason why AIWA had set up more than a dozen factories all over the world to save on transportation costs. Also, some products will be damaged during transportation.
PCs are more expensive than Walkman and are more fragile. Feng Yu must have factories in Europe and the US.
Other than the CPU, the monitor is the next most important hardware of a PC. Feng Yu has plans to start production for monitors. In the past, Wind and Rain LCD monitors were contracted out to Philips. It is fine if the volume is little, but if Feng Yu is going to produce in high volume, it will be cheaper to set up a factory himself.
But at this moment, Feng Yu encountered a problem.
Advanced Micro Devices, Inc. (AMD)