130 : Steamed
No matter how much the shipyard is the priority, you should steam it, right?
The era of mechanical engineering began with CNC equipment, and among them, Intel’s MPU was a product that opened a new chapter in CNC.
The adoption of Intel’s MPU was decisive for the Japanese company FANAC to occupy 60% of the global CNC market.
Based on that technology, in the 21st century, it occupied 21% of the industrial robot market and became a company with an operating profit rate of 40%.
CNC market share 60%, operating profit rate 40%… It was a number that made my heart tremble just thinking about it.
Even if I can’t start the CNC business right away, even if I get Intel’s MPU license, it will be a problem for a long time.
“uh? Do you know a company called Intel? They say it’s a new venture…”
Professor Joo Young-gil tilted his head.
“It was because the venture seemed to have great guts to charge such a high price. How good is that? Can I see you now?”
“of course. Let’s go right away.”
I forced myself to calm my excitement and followed.
Perhaps because it was a lab in another lab, after talking with another graduate student for a while, the door finally opened.
“This is it. Isn’t it really a luxury just by looking at it?”
“okay.”
It wasn’t empty talk.
I thought Japanese made machine tools were the best, but in the 1960s, American products were also formidable.
Why have these fancy machines lost their competitive edge?
I wondered if it was because of the exorbitant equipment price of 3.5 million dollars. As expected, the problem with the Americans was that they raised the price too much if they wanted to become more technologically advanced.
“Come on, make it work. I want to see you.”
I pressed on as if nothing had happened.
“It’s very easy. First of all, since I have entered all the figures, let’s make the crankshaft that was previously made.”
Professor Joo Young-gil skillfully operated the equipment.
The control board was also lavishly decorated as if it were in a sci-fi movie in the 1960s.
Click. Weiying.
When the sample was placed and the start button was pressed, the instrument started to run.
It was truly an art to see the crankshaft beautifully cut in three dimensions with the sound of sharpening metal.
Looking at the operation panel, there are 3 basic control units and 9 basic option modules.
It’s just a little slow, it’s hard to believe it’s a machine tool from the 60’s.
“They say that if you add all 20 option extensions to this, it will be 3.5 million dollars…”
Wasn’t this a full option? What’s greater?
“Of course I have to buy it as a full option.”
“Also! The boss knew you would.”
Professor Joo was so excited that his mouth caught on his ears.
With such a variety of options, it seemed that mass production would be sufficient if the speed was increased.
If I imitate it well and increase the size, I think I can shave the tanker crankshaft…
To be honest, if you ask Shim Jae-hong to imitate mechanical parts and servo motors, you will be able to do it right away.
The only technical barrier is the MPU and encoder circuit board.
“It is done now. See you in Korea for more details.”
3.5 million dollars is not a small amount of money, but if you use this as the basis for a domestic CNC, you will be able to break even.
The dream of localization of machinery is approaching as if it is within reach.
I didn’t expect the opportunity to come so soon.
Somehow, Professor Joo Young-gil was like an icon of good fortune.
“hurray! Now I have my own CNC!”
I don’t know if the CNC export license will come out at this time.
The United States is also in the early stages of CNC development, so it seems that there will be no export restrictions.
If it becomes a problem, you will have to borrow the power of General Van Flint. South Korea is an ally, so importing machinery will not be impossible.
“Then, tell me when you will return home.”
“I’ll wrap things up here and return home within a month.”
“I don’t know when I will come back to America, so I have dinner with my classmates. I contact the headquarters directly for the purchase price of CNC and other equipment.”
“Yes, boss.”
I took out the bills from my wallet as soon as I picked them up, handed them to Professor Joo Young-gil, and left the lab.
I wanted to start with Sundstrand, a CNC manufacturer, but Intel was more urgent.
“Please go to a hotel near here. I need to use some telex.”
“Yes, Mr. Wu.”
I climbed into the waiting limousine.
Also, shopping is convenient with a car.
As soon as I arrived at a nearby hotel, I telexed Bill Bain.
“To. Bill Bain’s Chief of Staff.
I want to acquire a stake in a venture called Intel. How much money do you have available?”
“To. Chairman Woo.
The current available amount is $19 million.”
Well. Also, the financial situation is not so easy.
It seems that the fact that they spent 20 million dollars on the shipyard, that they continued to invest in Incheon Steel and other affiliates, as well as branches, and that they took out 5 million dollars to purchase Goliath crane poles.
“President, I would like to ask why you want to invest in a venture.”
“The product called MPU produced by Intel will be a great competitive advantage for our business.”
“Then, since the goal is the product, request the license before the stake. If you are seen as an investor, there is a high risk of losing your money. It will raise the cost of equity excessively, and if not, you will have to pay additional license fees.”
An urgent message from Telex arrived.
It seems that I am extremely worried that I will be treated as a pawn by an American venture.
As I was reading the full text, the telex came in one after another.
“Unless a venture called Intel is overflowing with investment funds, if they ask for a license, they will use that as an excuse to induce equity investment. Then you can get both cheaply. Of course, please leave the final contract to me.”
That was good advice.
Buying a license and shares at the same time?
“OK. I see.”
“thank you.”
I said I would know, and then a short reply came.
Also from a consulting company, he was an expert in money play.
A consulting company is not a company that provides technology or future strategies.
After exchanging opinions with Bill Bain via telex, I headed straight to Silicon Valley.
Van Flint’s secretary also didn’t show much reaction when he came to MIT, but when he said he was going to go back to San Francisco, he was shocked.
I reassured Van Flint that I would be back by the promised time and went straight to the airport.
**
San Jose, San Francisco.
No matter how heavy-handed I am, I know that Intel is in Silicon Valley.
“Excuse me.”
“welcome. sir. How can I help you?”
Finding Intel wasn’t too difficult.
There were only about 10 buildings in the wide field that could be considered as companies.
“Is this a company called Intel?”
“Yes, Intel is right. How can I help you?”
The front was very active.
Please tell me that you came to buy something.
The situation is urgent. It went very well.
“I came to see the MPU in the CNC machine. I was thinking of signing a supply contract.”
“Oh, come this way.”
Did you schedule a meeting like other companies? Where are you from? I was guided right in without asking questions.
He is also a venture that the world’s Intel has just started. I started a business after receiving investment, but it must be frustrating because there is no business that makes money.
Whether it’s reassuring existing investors or attracting new ones, it’s time to build your business.
It was really great luck that Intel’s MPU caught my eye just at this time.
“hello? This is Intel’s Gordon Moore. Where are you from?”
“My name is CS Woo from South Korea. I am in charge of Joseon.”
“You run a shipyard?”
A slightly puzzled look flowed into his eyes.
Why are you looking for semiconductors in heavy industry? I guess it means
“I saw a CNC machine at MIT. After looking at the specs, the core parts were made by Intel here. I came to check if the supply chain is safe because it is called a venture.”
“Ah, you’re here for the CNC. If it is an MPU that fits there, there is no problem with supply.”
President Moore assured that there was no problem with exaggerated gestures.
It was an extraordinary feeling to see Yangban, who is called the genius of the century in the semiconductor field, with my own eyes.
He felt more like a resourceful businessman than a genius developer isolated from the world.
“It is a piece of equipment that costs 3.5 million dollars, so I can’t help but worry. Honestly, if the MPU is broken, shouldn’t both the controller and the encoder be replaced? At our shipyard, we use machines like this for 10 or 20 years.”
At my words, Mr. Moore looked slightly surprised.
You should have noticed that I have a good understanding of the MPU.
Intel is said to catch aliens and develop them, but I am a 21st century human.
“Of course, expensive things should be used for a long time. Our products are very reliable, so there is no problem even if you use them for 10 or 20 years. And since newer chips come out every year, it’s okay to upgrade.”
upgrade?
It sounds like it’s easy, but it’s quite difficult.
Why do CNC manufacturers go to such trouble?
that reminds me of
“Hmm, you make a new product every year. Currently, the MPU is 4-bit, but when will the 8-bit one come out?”
From the time of applying the original 8-bit MPU, CNC began to gain wings.
Before that, the worker had to calculate hard with a scientific calculator and enter the numbers one by one, but starting from 8-bit, if you only put in the main numbers, the rest was calculated on its own.
In the meantime, he performed calculations like an early computer and went beyond the level of a scientific calculator.
“It is thrilling to meet someone who can see through our company vision. We’re aiming for CPUs with arithmetic and memory, not just 8-bit MPUs. When the CPU comes out, the customer is the first to deliver it. ha ha ha.”
I answered my question alumni, but I didn’t ask because I also wanted a proper answer.
8-bit MPUs came out in the early 70s, so they were still years away.
It was an exploration of what each other knew and how much they knew each other, and it was a time to say what they really wanted.
“MPU? CPU? Whatever it is, it seems that we need a license for the product as we have to make CNC equipment. Can we make a contract?”
“Do you also make CNC machines in your shipyard? Or rather, you want a product license?”
“We are a large shipyard with close to 50 CNC units, so we plan to make our own equipment. If a license agreement is not possible, it is a situation where even a Japanese company has to contact.”
“5… 50s?”
President Moore was surprised when he told me that I used 50 CNC machines.
How can I check if my words are bluffing or not?
In this case, you have to kill the opponent first.
“Honestly, if we develop a small control device in addition to the CNC, the MPU consumption will be much higher than that. If so, it is not a large quantity for Intel, so we want to secure supply and demand stability by signing a license agreement.”
If the volume is small, it is common to buy the entire license for the product.
I would call it a made-to-order B2B transaction.
“If you purchase a license for a product, it is our company’s natural duty to continuously produce that product. However, the license price is not too expensive.”
“Would that be half a million dollars? I want to try exporting by making a CNC with Intel parts.”
“Are you even trying to export?”
If there is an export record, Intel is also easy to do business with.
Since MPU is the predecessor of CPU, it is also a very important business item for them.
“I am still thinking about it. Intel’s products are good, but if you start prematurely and then change the specifications or discontinue the product, it will be very difficult. In order to go safely, I wonder if I should use Fairchild Korea’s existing products in Korea.”
I mean, any businessperson would agree.
There is no customer in this world who would take the risk of being dragged around by a parts supplier. Product licensing agreements were very important for Intel, which is known for making fools of its customers.
“Fairchild. Our products are far more advanced. If you want such a stable license, how about investing in our company?”
bingo! As we were talking, as Bill Bain said, the story of equity jumped out.
“Equity investment? That’s a bit… It’s a license fee, so you can just blow it away, but it’s not a penny or two for equity investment.”
I pretended to be in trouble and waved my hand.
“If you are exporting as well, wouldn’t it be better to directly request product specifications as a major shareholder?”
“The mainstream group specializes in heavy industries, not semiconductors. Not even an investment company.”
I crumpled this meat.
If you’re acting like this, you know enough that I’m not interested in management rights, right?
Sell only the shares you can sell, then it’s mutually beneficial.
“Then, take a 7.5% stake for $5 million without exaggeration. Then you become a major shareholder with 10 times the license fee. It won’t be too expensive in exchange for securing a stable parts supply.”
what? 7.5% stake for $5 million?
It’s completely free.
To Moore, $5 million might be of a different value, but to me it really felt like a pittance.
Anyway, 7.5% was just half of the 15% stake that the major shareholder had to report.
That’s enough to defend management rights, that’s it.
“Well, MPU and CPU licenses for 5 million dollars… And the 7.5% stake is a bonus.”
“sure! sure.”
On the day Intel goes public, my 7.5% stake will be a huge amount of money.
“Today, I will only make a temporary contract and send my secretary to sign the main contract. We’ll coordinate the details then. Are you okay?”
“Of course. If you become a major shareholder of Intel, wouldn’t you try your best to sell our products? This is a win-win.”
The basic contract alone made Moore very excited. In fact, I would have been more excited.
ate it completely
Eating a 7.5% stake in Intel for 5 million dollars will be one of the most important events in the history of the trend.
“Then, please send the engineer who designed the MPU and circuit for CNC to Korea. As a major shareholder, can you ask for that much?”
“of course. of course.”
Intel’s alien developer has also been recruited.
Don’t roll it as far as you can.