Rebirth of the Internet Overlord

{Time: February 20, 2004}

{Location: London, United Kingdom}

The people at the top of the mountain and the people at the bottom of the mountain look at each other. No matter how different the scenery they see, they are equally insignificant in each other's eyes.

So Ning Zimo never realized that people with clear goals need to care about the opinions of passers-by. After all, before there is a clear result, geniuses are just madmen in the eyes of everyone.

Ning Zimo doesn’t think he is a genius,

But I don’t care what others think,

Because, he has no time to care about others.

He had too many things to do, especially with something as important as the arm, which made him feel like he couldn't be distracted.

…

Speaking of ARM, this company, which was originally called CPU in 1979, gradually entered the track of business, so it changed its name to Acorn Puter Ltd.

By 1981, the British Broadcasting Corporation BBC planned to broadcast a program to improve the popularity of computers throughout the UK. They hoped that Acorn could produce a matching computer. This plan was very ambitious, and the British government was also involved (the purchase fee was

Half of it will be funded by the government) and once purchased the computers will be in every classroom in the UK.

However, the acorn company that took over this task found that the hardware design of its products could not meet the demand. At this time, the development trend of central processing units was changing from 8-bit to 16-bit. However, the Motorola 16-bit chip they selected was expensive and

Slow, but Intel, which is at its peak, coldly rejected their need to develop central processing units.

In a fit of anger, acorn decided to do it themselves. At that time, acorn's developers found a simplified instruction set for a new type of processor from the University of California, Berkeley. This instruction set just met their design requirements. Based on this, they came from the University of Cambridge.

Computer scientists Sophie Wilson and Steve Furber finally completed the microprocessor design.

The former is responsible for instruction set development, and the latter is responsible for chip design. For this chip, acorn named it acorn risc machine. acorn is the company name, machine is the machine, and risc simplifies the addressing method by streamlining the types and formats of cisc instructions.

Achieve the effect of energy saving and high efficiency.

But the arm that Ning Zimo wanted to acquire was not the arm company, but a company called arm (advanced risc machines) that Acorn established in 1990 to cooperate with Apple.

In this joint venture ARM company, Apple invested 1.5 million pounds, chip manufacturer vlsi invested 250,000 pounds, and Acorn itself invested 1.5 million pounds in intellectual property rights and 12 engineers. In the years after its establishment, ARM's performance was mediocre, and engineers

We are also panic-stricken, afraid that at any time

Will lose their jobs. In this case, arm decided to change their product strategy. They no longer produce chips, and instead transfer chip design solutions to other companies in a licensing manner, that is, the "partnership" open model. Unexpectedly, it is exactly this model

, creating a new era for arm.

ARM adopts an ip (intellectual property, intellectual property) licensing business model, charging one-time technology licensing fees and royalties as the main source of income. In addition, it is the income from software tools and technical support services. For arm company

Generally speaking, the one-time technology licensing fee is between 1 million and 10 million US dollars, and the royalty rate is generally between 1% and 2%.

With the help of this model, arm launched a series of chips such as arm7, which were licensed to more than 165 companies. With the explosive popularity of mobile phones, arm made a lot of money and was very happy. On April 17, 1998, business

The rapidly growing arm holding company is listed on both the London Stock Exchange and NASDAQ.

At this time, Apple, in the post-Jobs era, gradually sold its ARM shares and invested funds in the development of iPod products.

Ning Zimo remembers this brain-twitching behavior clearly. He also remembers that in the world of his previous life, microprocessor applications based on ARM technology accounted for more than 75% of the market share of 32-bit RISC microprocessors. ARM technology has penetrated into

to all aspects of people's lives. Therefore, Apple, which sold ARM's shares after ARM went public in 1998, wanted to make an acquisition for US$8.5 billion in its previous life in 2010, but was rejected by the board of directors.

Obviously, ARM's board of directors was unhappy with Apple's move to sell its own shares and simply refused. Arm's development was out of control. It wasn't until 2016 in the previous life that Masayoshi Son's SoftBank Group really won the deal at a price of US$30.9 billion.

arm.

Of course, we cannot forget the hardships Hua Wei said in his previous life, which forced Hua Wei to come up with the Classic of Mountains and Seas to sweep the entire mobile Internet hardware ecosystem.

Ning Zimo laughed heartily every time he thought about this period of Apple's history.

It is now early 2004. Arm has not really launched its Cortex series products, and smart phones have not yet appeared. Arm company is still just a fledgling. Although Arm company's openness allows Ning Zimo to have another option: purchase a license.

There is still a way to develop his own chips. But Ning Zimo sees it very clearly. Instead of developing his own chips, it is better to seize this last opportunity to win the standard of the ARM architecture, and then let ARM get on its own express train and let others follow.

Eat ashes behind you.

In fact, regarding the acquisition of ARM, it is best to talk to ARM's board of directors while silently acquiring the shares from small shareholders, achieving a two-pronged approach.

Before coming to the UK from Germany this time, Ning Zimo had secretly completed the US$150 million acquisition of ARM shares in just one month.

Of course, this only completed 1/4 of Ning Zimo's plan.

So to

…

"Gentlemen, I currently hold only 16% of ARM's shares. Although it does not reach the British mandatory tender offer line of 30% for domestic listed companies. But for every additional 1%, I will have to submit a request to the British Monetary Authority (

It is too troublesome to apply for fsa). So this time, I want to formally discuss something with you. That is how I can win arm in one fell swoop once and for all, and at the same time, let you keep the opportunity to continue to develop in arm company.

Passion.”

Ning Zimo said this to Sophie Wilson and Steve Fibre, representatives of the ARM core technical team during the interview. These two people are the most critical people Ning Zimo found in the entire ARM team.

On April 17, 1998, ARM announced that it would be officially listed on the London and Nasdaq stock exchanges. The issue price was 5.75 pounds per share (the Nasdaq issue price was US$29.17). The market value that year had already reached

264 million pounds, this market value is already as high as 483 million US dollars in US dollars. After 6 years of steady development, even after experiencing the impact of an Internet bubble, ARM's current market value has steadily risen to 800 million US dollars.

When it comes to acquiring a listed company in London, England, in the continental European legal system, it is no longer enough to rely on Elon Musk's attorney or a single legal representative like Zhang Miaoying to handle the matter.

Therefore, Ning Zimo specially invited Cameron McKinnon Law Firm, which has rich M&A experience in Europe, to handle the important business of acquiring ARM. The previous US$150 million acquisition of 16% of ARM's minority shareholders

They have always managed the shares. But now, Ning Zimo is no longer satisfied with continuing to absorb small shares from small and medium-sized shareholders, and must report to the British Monetary Authority for every 1% received, which is a cumbersome operation.

Therefore, when it comes to arm projects, you must be simple and crude, and even faster!

"But, Ning, although we have heard of your reputation in the Internet industry, you have a blank slate in terms of hardware, especially low-power CPUs. Even if we put this issue aside, acquiring arm will have a big impact on your Internet industry.

What's the point?" Sophie Wilson wondered.

Sophie Wilson had heard about the name of the young man in front of her. After all, skrpe originated in Luxembourg, Europe. As a corner of the European continent, it is located in the arm of the British Isles. The name of the founder of skrpe is still unknown.

Heard something.

A young man who created an Internet miracle in 18 months now has assets of 5.6 billion US dollars, which is enough to buy 6 and a half ARM companies. But he first bought Glass Slag, a well-known company in the gaming industry.

Game company, that is to say, this young man who started in the Internet industry first got involved in the game industry, and then became interested in ARM?

What exactly does he want to do?

Sophie Wilson couldn't understand.

"It's very simple. Just like I am optimistic about the development of game pages, I am also optimistic about the future development of low-power processing platforms."

Ning Zimo stood up, still staring at Sophie Wilson who asked the question. Ever since he stared down at Meg Whitman during the skrpe acquisition negotiations, Ning Zimo became more and more fond of this oppressive attitude.

Negotiation method. As for whether it is sharp or gentle, it only needs to be supplemented by the corresponding temperament. skrpe, after the glass slag, he continued to summarize, and now it is very comfortable to use it in arm negotiations.

Seeing that Sophie Wilson and Steve Fibre's pupils shrank because of him getting up, Ning Zimo slowed down his speech appropriately.

"You can think of me as an investor who is optimistic about ARM, because I am optimistic about the future development of 64-bit processors on low-power platforms." Ning Zimo paused, raised the corner of his mouth and said with a smile, "Unlike Intel,

You have focused on low-power processors from the beginning. In my opinion, arm will always have considerable potential in some field in the future.

The important thing is that unlike Intel, which manufactures CPUs itself, ARM focuses its efforts on the position of standard setter of microprocessors. This kind of licensing of microprocessor design solutions (IP) to partners, partners use ARM's I particularly value the way arm obtains licensing fees and royalties by integrating its own technology and launching various chips.

Because I did an in-depth research on your company before acquiring arm.

ARM is mainly engaged in the research and development of high-efficiency, low-power chip (microprocessor) architecture, usually in a 2-3 year cycle. This is also the cost generation stage of ARM, and then choose ARM to pay an entry-level license for the partner company. Obtain the design plan for free.

And develop its own products based on the arm solution, this cycle will take 3-4 years, and then when the partners' chips begin to be shipped, arm can obtain 1-2% royalties from each chip based on its architecture, and each An ARM design solution is suitable for a variety of terminal applications, and each application can obtain royalties and cash flows for many years, with significant scale effects.

Or to put it another way, it is more straightforward to understand the commercial value of arm. Arm's business model is similar to partners outsourcing microprocessor design to arm, that is, R&D outsourcing. Compared with independent research and development within the enterprise, this kind of authorization +Royalty R&D outsourcing can reduce corporate costs to a certain extent. Outsourcing the entire industry's processors to a single company is obviously more economically efficient than independent development, diluting R&D expenses, lowering end product prices, and in turn further promoting technology. progress."

Ning Zimo opened up the topic, and what he said was so accurate that Sophie Wilson and Steve Fibre felt incredible.

They themselves are the founders of ARM, so they naturally have a very clear understanding of the company.

But this young Internet entrepreneur understands Arm’s business so clearly?

Now, can they still regard the young man opposite as a layman who only understands the Internet and does not understand their industry?

Noticing the change in the eyes of the two men, Ning Zimo did not respond.

There are only R&D expenses for the microprocessor design team, but no production-related hardware and personnel expenses. It can be said that arm is a solution-based design company focusing on low-power processing R&D. This kind of light-asset but high-output company , in fact, it should be the company that a certain type of investor likes to invest the most.

However, in this era when the future situation is unclear, no one has such a "far-sighted" vision. In the history of Arm's development, far-sighted leaders like Apple have given up investing in Arm.

In this era, besides myself and within the industry, who else would pay attention to ARM before it takes off?

Sophie Wilson and Steve Fibre looked at each other, and both nodded slightly.

Steve Fibre turned to look at Ning Zimo and said, "Ning, I now believe what Mr. Charles once said. You are indeed an investor who knows Arm Company very well."

"As long as you can convince other shareholders, we are willing to accept your investment." Sophie Wilson also nodded.

Ning Zimo smiled and turned to nod to Charles, who was leading the team from Cameron McKinnon Law Firm.

Charles stood up knowingly and pushed the two documents in front of him, "Two gentlemen, the entire arm research team currently holds 28% of the shares, and the remaining shares are in Juhard and other companies and investors.

Now that you agree to Ning’s investment, we will issue a takeover offer to the remaining share holders of Arm Company on behalf of Mr. Ning.”

Without waiting for Sophie Wilson and Steve Fibre to pick up the documents, Ning Zimo said with a smile: "In terms of the offer price, I will increase the current stock price by 10%. I hope this transaction can be completed within three months."

Completed within a month.”

"As for the acquisition review, we will handle it for Mr. Ning."

Charles stood up, and a group of other representatives from the Cameron McKinnon law firm around him also stood up.