Various types of semiconductors are used in mobile phones.
In particular, starting from memory semiconductors to communication semiconductors, all were necessary to make smartphones.
It would not be wrong to say that to make CDMA-based smartphones, it was essential to use Qualcomm's semiconductors.
A technological monopoly.
Qualcomm's technological prowess was set to monopolize the CDMA market.
Before smartphones became popular, making a patent agreement with Qualcomm was the only way to secure favorable terms.
That is why I flew directly to the United States.
I headed straight to the SAVE investment company to inquire about the progress.
"How are the negotiations with Qualcomm going?"
He was a team leader who had come to the U.S. a few days before me.
He was handling Qualcomm-related matters alongside David.
"Acquiring shares in Qualcomm wasn't difficult.
Until last year, the stock price hit a ceiling at $88, but now it has slightly risen to around $35."
"At the last Wall Street gathering, you also acquired a small amount of Qualcomm shares, right?"
"We currently hold about 12% of Qualcomm's shares."
Qualcomm was one of the biggest victims of the IT bubble.
If this continued for a few more years, Qualcomm's stock price would drop to the low $10 range.
"What is the share structure like?"
"Qualcomm holds only about 20% of the shares, while the remaining 80% are held by Wall Street and individual investors."
"With just 8% more, our shareholding would surpass Qualcomm's."
"We can buy shares immediately.
Right now, Wall Street is desperate to sell off IT stocks."
Although Qualcomm's stock is currently priced at $35, once the era of smartphones fully opens, the price is expected to rise at least threefold.
So, there was absolutely no reason not to buy.
"If we're going to buy, let's go all out. Try securing up to 50%."
"Although Qualcomm's stock price has dropped significantly, its market capitalization still exceeds $40 billion. To raise the stake to 50%, at least $16 billion must be invested."
"Don't we have that much available capital?
Investing just the money earned from IT derivatives should be enough."
"That may be true, but isn't it too risky?"
"It will be tough for a while, but in a few years, it will definitely turn into a profitable asset.
So, don't worry and secure the stake."
"Understood. I'll circulate through Wall Street and secure as many shares as possible."
After smartphones were released, no matter how much money was offered, securing Qualcomm's shares would be difficult.
But right after the dot-com bubble burst, it was possible.
***
A few days later,
I visited a quiet sandwich shop near Washington.
The door was firmly closed, perhaps because it was late.
I knocked on the door.
Knock, knock, a very soft sound echoed, but I received a quick response.
Click!
A burly man opened the door.
He was all muscle, hardly resembling a chef.
"Please wait inside."
He guided me into the restaurant.
Someone was having a meal at one of the tables.
"Sorry for the late hour. I won't have time to meet you otherwise, so please understand."
"That's not a problem. In a few days, you will become the President-elect of the United States.
Naturally, I have to adjust to your schedule."
The person in the restaurant was George Bush.
Because the election battle had been so fierce, his face showed many signs of strain as he offered me a seat.
"This place makes excellent sandwiches. My father introduced me to this spot. The bacon sandwich here is especially outstanding."
"Then I'll have the same."
Since it was a simple meal, the sandwich arrived in just a few minutes.
Bush was staring intently, so I had no choice but to take a bite.
It was an ordinary sandwich with bacon, tomato, and lettuce.
"How does it taste? There aren't many places in America that make proper sandwiches."
"Thank you for introducing me to such a good place."
"I'm the one who should thank you. Without SAVE investment company, the campaign funds wouldn't have been this plentiful. But what made you trust me enough to support me with such a huge sum? What if I don't get elected?"
There were two days left until the election.
Yet Bush was showing signs of anxiety because the polling gap was still very narrow.
"SAVE investment company has never failed in its investments before. Stocks, bonds, futures, even people."
"Do you believe I will definitely be elected president?"
"If it weren't to meet the President of the United States, why would I come to a sandwich shop at this late hour?"
"You sound more confident than my own staff.
Still, hearing you say that puts my mind
somewhat at ease. Thank you."
For Taewoo Group to expand globally, help from the United States was necessary.
Not just help, but it was enough that the U.S. did not interfere.
That's why we invested so much in Bush, and why he absolutely had to become president.
"I have already prepared a gift for your election victory."
"Haha, a gift already? You're getting ahead of yourself, but I'm curious about what you've prepared."
"Taewoo Group has decided to build a factory worth $10 billion in the United States. We will build the factory in any location the President desires."
Taewoo Motors and Taewoo Electronics needed new factories.
With rising sales in the United States, it was necessary to build new factories in America as well.
If we were going to build, wouldn't it be better to boost the President's morale in the process?
"You've prepared a very nice gift. I will prepare something in return that won't be lacking."
"The thought alone is enough."
The meeting with Bush ended shortly.
Our next meeting would probably be at the presidential inauguration.
The next stop was Apple.
I traveled to California and visited Apple's headquarters.
Steve greeted me with an awkward smile.
"Thanks for coming all this way. And I'm sorry.
The iPhone launch keeps being delayed."
"It's not too late yet."
Steve's perfectionist nature was truly remarkable.
Despite Apple's stock price plummeting due to the dot-com bubble, he kept delaying the iPhone launch to upgrade its performance.
"We can't delay the launch any longer. We'll reveal it at next year's CES (Consumer Electronics Show)."
"When do you plan the official launch?"
"By June at the latest, we intend to officially launch."
"That leaves less than eight months now. Your production schedule must be tight."
"I'm a bit worried, but I think we can meet demand through contract manufacturing."
Steve had already signed a contract with a specialized contract manufacturer in China.
If I had stepped in, Taewoo Electronics could have taken on the contract manufacturing.
But since it wasn't profitable, I stepped back.
Apple only paid 3% of profits as contract manufacturing costs, so the margins didn't work for Taewoo Electronics.
However, if it was not contract manufacturing but a parts supply contract, there would be a margin.
That was also the reason I visited Apple.
"We want Taewoo Electronics to supply all the semiconductors used in the iPhone."
"Did Taewoo Electronics also have a semiconductor company? I was planning to sign contracts with Samsung Electronics, Hyundai Semiconductor, and a Japanese semiconductor company."
"We plan to acquire Hyundai Semiconductor's semiconductor division soon. The acquisition can be completed by the end of this year at the latest."
"If you acquire Hyundai Semiconductor, it's certainly possible. But you can't sign a contract with just one company. You have to spread the risk."
It was advantageous to source parts from multiple suppliers.
If parts were sourced from only one company, production problems could occur in the event of a major accident like a fire.
But if parts were sourced from several suppliers, production might be slightly disrupted but would never be completely halted.
"I fully agree with your point. Even though we plan to acquire Hyundai Semiconductor, it's still risky to sign an exclusive contract when we don't know if Taewoo Electronics can properly manufacture semiconductors."
"Then why did you make such a proposal?"
"For the future of Apple. Taewoo Electronics does not produce phones. So, there is no competition with Apple. But companies like Samsung Electronics or the Japanese semiconductor companies produce phones themselves."
Technology leakage.
Steve had gathered all of Apple's capabilities to make the iPhone.
Among that technology, some were patented by Taewoo Electronics, and many originated from my own ideas.
But if we signed contracts with competitors,
inevitably, technology leakage would occur.
Of course, it would be impossible to copy all the technology, but it would still mean sharing part of the smartphone manufacturing technology.
"You make a good point. They can't make smartphones similar to the iPhone right now, but eventually, they will produce competing products."
"Taewoo Electronics does not compete with its customers. That's how customers can feel safe signing contracts with us."
Not competing with customers.
This was not my original idea.
I quoted what a Taiwanese semiconductor foundry company had said.
And it was the direction that Taewoo Electronics' semiconductor division would take.
"Are you planning to grow Taewoo Semiconductor into a foundry company?"
"Yes. Starting with Apple, we are planning to sign a contract with Qualcomm soon as well."
This was also why I had purchased Qualcomm shares.
If we could secure exclusive contracts with both Apple and Qualcomm, we could immediately cover the losses of Hyundai Semiconductor.
"I understand your intention, and I agree. But can you really trust Hyundai Semiconductor's technological capabilities?
Looking at the semiconductor company rankings, Hyundai Semiconductor doesn't even make the top ten, does it?"
"If we judge only by revenue, it's outside the top ten. But its technological capability is by no means lacking. Also, Taewoo Electronics plans to invest over $5 billion annually in semiconductors."
"Hmm. For now, I will sign a contract with Hyundai Semiconductor first. However, if there are any issues with product performance or production volume, I will have no choice but to make additional contracts with other companies."
I got a firm answer from Steve.
Although there were conditions attached, I was confident I could satisfy the requirements he set.
In fact, I didn't even need to persuade Steve.
Because I owned the majority of Apple's shares, I could have easily secured an exclusive contract with Taewoo Electronics if I had pushed.
But I didn't.
It could have been like killing the golden goose.
"There won't be any problems with performance or production volume. Even if Taewoo Semiconductor suffers billions of dollars in losses, I promise to keep my word."
"Are you seriously thinking of printing semiconductors with money?"
"The semiconductor industry is one that requires money and time to be invested initially.
If necessary, I am even prepared to use my personal fortune."
"That's a reassuring answer. Then I will leave the semiconductor issue to Taewoo."
Steve must have some vague idea of the assets I hold.
That's probably why he gave a satisfied smile.
But I didn't intend to rely solely on money to push through.
Money and time are important, but outstanding talent can bring even greater change.