ARM's development in the past two years has been very fast, which can be seen from its market capitalization, in just two or three years, ARM's stock price has reached $30 from the lowest point of $3.3 now, and then began to fluctuate back and forth in the year of last year (2011). Zhou Shi originally wanted Galaxy to acquire ARM, but there was great resistance from the United Kingdom, the United States and the ARM board of directors, so he had to give up and promised to stick to the stock. Of course, Spreadtrum is able to enjoy the same treatment as Qualcomm.

Galaxy Capital's funds, which are scarved of money, also sold most of their shares last year, leaving only 8 percent of the shares to secure their place on ARM's board of directors. Galaxy Capital, which has made a profit of more than one billion US dollars, has more room to maneuver. Originally, it was ready to take the opportunity to acquire MIPS when Microsoft and Google competed for Motorola last year, but unfortunately it was finally stopped.

MIPS is the world's second-largest semiconductor design IP (intellectual property) company and the world's largest analog IP company. ARM is the world's No. 1 semiconductor design IP company. However, the gap between the first and second is unimaginable. ARM has a market capitalization of nearly $15 billion, while MIPS has a market capitalization of just under $500 million. Historically, the company was spun off and acquired in the second half of this year, with a total cost of only $410 million. Of course, he doesn't have a lot of employees, only about 150 people.

Zhou Shi is interested in MIPS because the company's architecture is the most mature reduced instruction set architecture in addition to the ARM architecture. Huaxia's Loongson and Ingenic are both developed based on MIPS. The core assets of MIPS are his patents and talents, of which 82 core patents are directly related to the MIPS architecture and are required to design MIPS-compatible CPUs, and the other 498 are general-purpose and may be used in the design of CPUs of any architecture. It can be said that some of them are patents related to MIPS architecture, and some of them are patents related to CPU design. This patent is very valuable, for example, ARM's 64-bit architecture is newly defined, has no inheritance relationship with ARM32, and is probably 70-80% similar to MIPS64. From this, we should be able to see some of the value of MIPS! Of course, Zhou Shi is interested in more than these.

A few years ago, Zhou Shi wanted to push Peking University and the Chinese Academy of Sciences to launch their own open-source architecture instruction set, but unfortunately no one was willing to do it, thinking that it didn't make much sense. Now the University of Berkeley is working on a reduced instruction set architecture called RISC-V, and if nothing else, in a few years they will become a big star in the open source market, and perhaps the future of artificial intelligence, Internet of Things, edge computing processors. RISC-V, while good, is a very open instruction set, which can cause serious fragmentation. For example, Google's Android has such a problem, and the user experience has been much worse than Apple's IOS and Time Android for a long time. Besides, without the support of the application ecosystem, RISC-V still has a long way to go. Zhou Shi doesn't want to wait so long, who knows what the world will be like after 2018? He wants to establish Yahoo's lead before then, and he also wants the future trade war between China and the United States not to have too much impact on his company, and an open source instruction set architecture needs to be launched in advance, which is why he is staring at MIPS.

"With the acquisition of MIPS, if done right, we can get the full cost of the acquisition from companies like ARM with patent licensing, at almost zero cost, and we can also win the future with open source initiatives. Zhou Shi persuaded the company's management before proposing to acquire MIPS.

As an Internet company, it is a bit too sensational to want to buy a chip design company, there is almost no correlation between the two, and there is no complementarity in the business model. Except for Zhou Shi's Chinese identity, perhaps because of political factors, he made such a decision, and he couldn't see any reason for acquiring this company.

"Artificial intelligence and cloud computing, and even open computing projects need special chips, we can't expect anything from others, Yahoo must have the spirit of a pioneer, just like when the Internet first started, we are the pioneers of the future world, not the keepers! Yahoo's name has shown that we can only have the future if we bravely face the unknown world. Zhou Shi bewitched everyone, and finally, as the majority shareholder of Yahoo, Zhou Shi forcibly approved the acquisition.

"With the acquisition of MIPS, we will probably offer the ISA for free, but charge for the actual processors it generates based on that architecture. Or companies can charge a support fee, which is something that open-source software companies have been doing for years. How to open source needs to be discussed by everyone at that time, but our determination to promote MIPS, please believe that whether it is an open computing project, artificial intelligence and cloud computing, MIPS has a wide range of applications, and our good cooperative relationship with companies such as Amazon, Time, Guoke and Spreadtrum can ensure the future of MIPS," Zhou Shi persuaded the person in charge of MIPS

Prior to this, MIPS, which had poor performance, was also frequently rumored to be sold, and AMD and Google were potential acquisition targets. In particular, Google, which has acquired Motorola, is considered to be the best target for the acquisition of MIPS. After all, in terms of both capital and company size, Google is the best candidate.

"Yahoo is in the adjustment stage, but Microsoft and Google are at their peak, how much room for their upside is there? Can they reach a market value of $300 billion or $500 billion? It can't be a trillion! At least Yahoo's growth space is more imaginative, although we are adjusting this year, and there is a great possibility of loss this year and even next year, but our development this year is obvious to all, and for us, there is almost no suspense about reaching a market value of $100 billion. "Chen Shouzong is so foolish

"We can buy with cash and stock!" said Tim Morse, who said that an acquisition of less than $500 million is really nothing for a company with a market value of nearly $40 billion. Although there is competition, Google, Apple and Microsoft have reached a tacit agreement in the last Motorola acquisition, MIPS ceded to Zhou Shi, AMD is sluggish, and now Yahoo is the most sincere.

After several negotiations, as Zhou Shi became Time Magazine's Person of the Year, MIPS shareholders finally agreed to Yahoo's acquisition, using cash and stock to buy MIPS for $450 million. The funds involved in this acquisition are less than 5% of the company's market capitalization, and it does not need to be announced as soon as possible, waiting for the approval of the relevant departments before it is too late.

However, the acquisition agreement was reached so quickly, mainly because the acquisition premium was 50%, and Yahoo also successfully joined a trust called the Enterprise Security Alliance with the help of this acquisition. In addition to ARM, this Delaware organization also has Cisco, Ericsson, Google, HP, IBM, Intel, Verizon and other well-known companies. Its mission is to observe high-tech patents for sale in the market, wait for opportunities to buy, and then provide licenses to members of the organization and third-party companies.

(End of chapter)