Chapter 47 Lowest Price Supply Agreement

"Other suppliers can't, but Ricoh can!" Lin Qi said seriously, "90% of the production capacity of your chip production line is idle, and the loss caused by annual depreciation expenses is conservatively estimated at 10 million US dollars, right?"

Kentaro Ichimura was silent when he heard this, and the idle capacity of Ricoh's chip factory was a thorn in his heart. Pen | fun | pavilion www. biquge。 infoIf this problem is not properly resolved, his position as president may not be stable.

"If we provide an order for 10 million chips, we can make you fully produce and sell within two years, and the annual output of 5 million will be amortized into each chip, and each chip will only add $2 to the depreciation expense. Lin Qi smiled and said, "If you ignore the depreciation cost of the machine, the cost of MOS technology companies in the United States has been as low as 2~3 US dollars to produce one! Ricoh's production line, the yield rate may not reach the level of MOS technology, but 100% of the production capacity is utilized, and the cost of $7 a piece should be able to do it. The most important thing for you now is to earn back the depreciation expense of the equipment, and then seek profit after preserving the capital. And the opportunity to make the whole production line save capital and turn around losses is in front of you, it depends on whether you can accept this order!"

"......," said Kentaro Ichimura, a little displeased, "You're right!

Lin Qi shook his head and said, "We are not angels, we are here to do charity to help you turn around the loss-making production line." Our company also has its own considerations, and we must lower the chip to $7 in order to ensure our own interests!"

"Can you give me a few days to think about it?" said Kentaro Ichimura, "The scale of the funds involved in this cooperation is too large, and I will not count if I agree to it, and I still need to hold a board meeting to discuss it!"

"If we can't sign a formal contract within three days, then we'll probably need to find a second supplier. Lin Qi said categorically that looking for Ricoh is not because Ricoh is the most suitable, but because Lin Qi knows the current situation of Ricoh's production line, so he took the opportunity to reduce the price.

If you are a veteran semiconductor company with a stable market and orders, you will definitely not agree to Lin Qi to keep the price so low!

……

Three days later.

Kentaro Ichimura finally relented, and, using the reasons given by Hayashi Qi, persuaded the entire board of directors of Ricoh to approve the project.

This year, the 6502 chip is the most common chip in the world, and it is the representative of the cabbage price CPU!

With the licensing of MOS technology companies to global manufacturers, the 6502 chip, as well as compatible chips based on this chip, has been proliferating around the world.

Oversupply is the basic status quo of this industry.

The right of buyers in this industry has surpassed that of suppliers!

In particular, buyers who can provide 10 million chips are enough for sellers to agree to the most demanding terms without losing money!

The two sides signed a formal supply agreement, which stipulates that Ricoh will supply no less than 400,000 6502 chips per month to Xinchuang Electronics Company from October 1980 ~ October 1982, with a total supply of 10 million.

The payment method is cleared every month, and the payment for the previous month is settled at the beginning of each month.

Of course, the amount on the contract is in dollars, and the yen will appreciate in the future.

If the yen agreement is signed, won't the new startups have to pay more and more expensive costs as the yen continues to appreciate?

In order for the agreement to be binding, the amount of liquidated damages will reach $20 million if either party breaches the contract.

After the completion of the 10 million order, Xinchuang Electronics has the right of priority to renew. In the case of equal prices, Ricoh must give priority to the supply of new start-up electronics companies.

With the completion of the contract.

Both sides smiled excitedly.

Ricoh is happy because with this order, the chip factory finally has hope of turning around its losses.

Lin Qi is happy that he has obtained the supply channel of 6502 chips cheaply. Moreover, the right of priority supply is also a pit dug by Lin Qi for Nintendo.

After the signing of this agreement, Ricoh can only supply to Xinchuang Electronics at the same price.

And if Nintendo wants to get supplies, it will have to pay more expensive costs. Even if the cost of each FC increases by $1, it can be considered an ambush for future competitors.

After signing the agreement, Lin Qi left a few employees and established a branch of Shinsho Electronics (Japan) in Japan.

Because Japan is very wary of foreign investment, it has set a high threshold. For example, in the early stage of the preparation of the joint venture, the Japanese side must own 50% of the equity, and the sole proprietorship needs to be approved by multiple departments of the Japanese government after demonstration, so the new venture electronics (Japan) branch had to choose a joint venture with Ricoh, and both parties invested 5 million yen each to build the company's framework.

Three years later, Ricoh sold the equity of the joint venture to Shin Chi Electronics based on the valuation of the JV's assets, allowing Shin Chi Electronics (Japan) to become a wholly-owned subsidiary again.

This is also to bypass the Japanese government's policy restrictions on wholly foreign-owned enterprises, which must be a joint venture at the beginning, and the Japanese side needs to have half of the equity, but after 3 years, it is not subject to this restriction.

Soon after the establishment of the new company, Lin Qi asked Hong Kong to ship 1,000 units of "China Cube" arcade products, so that the Japanese branch quickly entered the state and promoted "China Cube" arcade machines to major game halls and shopping malls.

Although, the Japanese arcade market is highly competitive, and there are a bunch of established arcade manufacturers.

However, "Chinese Cube" puts the target customers in the non-game hall market, and convinces the mall through the sales staff to let the mall operate for free for three days, and then, if the mall feels that it is profitable to put an arcade machine in the idle space, then it can be officially purchased.

If the mall is reluctant to introduce arcade machines, then the sales staff will also be happy to move the samples.

This sales model allowed "Chinese Cube" to quickly open up a new market that was ignored by Japanese arcade manufacturers. Moreover, the game "Chinese Cube" is very casual, not a heavy game, and can better integrate into the atmosphere of any shopping mall.

Therefore, the Japanese branch of Shinsho Electronics quickly opened up sales channels, and 1,000 arcade machines were quickly sold out. Orders increased rapidly, and the Japanese branch soon placed an additional order of 5,000 units for the Hong Kong head office......

Seeing the popularity of the arcade products of the new venture electronics company, Ricoh is full of confidence in the handheld machine that the new venture electronics company is about to go public.

The market prospect of handheld computers is broad, which means that Ricoh's order for 10 million chips is completely reliable.

Kentaro Ichimura couldn't help but feel a little proud, and said in his heart: "When the performance of the chip factory stabilizes, Ricoh will issue new shares, and give equity incentives to the technical backbone of the chip factory, so that they can subscribe for equity at a low price." Reduce the shareholding ratio of those old guys, and gradually drive the old guys who have the most opposition out of the company one by one!"