The Turtle Tycoon: How Lin Baili Built Quanta into a Tech Powerhouse

  On the Forbes Global Rich List on July 13, Lin Baili, chairman of Taiwan Quanta, became the new richest man in Taiwan with a net worth of US$9.4 billion. At the end of 2022, his worth was only US$4.7 billion.
  If calculated on paper wealth, this means that in the past 7 months, he has earned the equivalent of money in the past 30 years. But behind such an explosion, Lin Baili is a “turtle” entrepreneur and entrepreneur who emphasizes slowness rather than fastness. He said, “Go forward step by step, make progress every day, and win in the end.”
invisible king

  Shi Zhenrong, the godfather of IT in Taiwan, China, has a saying: Samsung is the enemy of the world, and Taiwan is the friend of the world.
  Samsung has historically excelled at waging high-stakes, gambling-style competition to eliminate rivals. It successively killed Japan’s panel industry and Taiwan’s memory chips.
  Compared with Samsung, which has no way out for its opponents, Taiwan’s IT industry is indeed like a “gold medal steward”. It has tied up a group of industry giants, doing OEM for everyone, and eating meat for others, and drinking soup for itself.
  But this bowl of soup is sometimes fatter than meat.
  As early as 2003, two companies in Taiwan, China set an astonishing record at the same time, with a revenue of more than 300 billion NT dollars (about 70 billion yuan), and achieved a growth of 100 billion NT dollars within one year. One of them is Hon Hai Group, the parent company of Foxconn, and the other is Quanta Computer.
  But even so, Quanta has been quiet inside. Its founder Lin Baili did not show up for interviews, and the company did not hold any celebrations. The only news is that the employees have received an extra 2,000 yuan in bonuses every month for one year in a row.
  Quanta is so low-key, but at that time, one out of every three notebook computers in the world was produced by Quanta. As the world’s largest notebook computer manufacturer, Quanta deserves its name.

  According to the data for 2021, the global shipment of notebook computers is about 268 million units, while Quanta notebook computer shipments reached 75.3 million units, accounting for 28% of the market share, making it a well-deserved leader in notebook computer manufacturing.
  Although the outside world still does not see many media reports on Quanta. However, Quanta’s status in the industry makes people in the industry really look up to it.
  In 2010, when Chongqing was trying its best to attract investment, a local cadre once described the importance of Quanta in this way:
  ”Once the Quanta project is settled in other cities, Chongqing’s dream of building Asia’s largest notebook computer base will be shattered.”
  This sentence Not exaggerating. In 2001, Quanta established its first base in the mainland in Songjiang District, Shanghai. By 2010, the production value of this production base had reached 200 billion yuan, accounting for half of the total industrial output value of Songjiang at that time.
  However, with Chongqing’s active introduction of Quanta in 2010, Quanta began to transfer a number of projects such as packaging and small parts processing to Chongqing, which actually “caused the industrial development of Songjiang District to be sluggish for a time, and the tax revenue increased, even affecting the whole city of Shanghai”. At that time, Songjiang District had to put forward the viewpoint of “a strong man cuts his wrists and adjusts the structure, and looks at the numbers with a calm mind”.
  In 2020, Quanta’s two subsidiaries in Shanghai and Chongqing, Dafeng (Shanghai) and Dafeng (Chongqing) ranked second and 12th with foreign trade exports of US$17.15 billion and US$10.78 billion respectively, and ranked 12th. One is Foxconn’s Zhengzhou base.
  In this year, the total export value of China’s top 100 foreign trade export enterprises was 460 billion US dollars, and the two subsidiaries of Quanta alone accounted for 6% of the total export value of these 100 enterprises.
  Although slightly inferior, Quanta’s performance scale is still at the same level as Foxconn, but its public information and reports are extremely scarce.
  For example, a simple search on the Internet reveals that Foxconn has more than one million employees in mainland China. However, if you search for Quanta, you can only know some data with unknown language. The few reliable information is only “Quanta Shanghai Manufacturing City with over 40,000 employees” mentioned in April 2022 by “Guangming Net”, “The Paper “News” mentioned in 2020 that “at the beginning of March, Quanta Chongqing had 33,000 active employees”. A global leader in the manufacture of notebook computers, with perhaps close to 100,000 employees, is so low-key and invisible in people’s sight.
turtle spirit

  As the founder of Quanta, Lin Baili is also a low-key and even invisible existence. Li Kunyao, chairman of BenQ, once boldly said that he is a tiger and his peers are cats. Guo Taiming likes to talk about his business philosophy of “the devil is in the details”, but Lin Baili rarely speaks out in this regard.
  Facing Li Kunyao’s “cat and tiger remarks” and Guo Taiming’s “Quanta Big Brother”, Lin Baili just responded lightly: Why don’t you think more about how to win Samsung and LG, just do your own thing, it’s boring to compare .
  On May 9, 1988, after experiencing two entrepreneurial twists and turns, 39-year-old Lin Baili officially founded Quanta Computer Company and chose to enter the field of notebook computers.
  In the notebook computer manufacturing industry at that time, most of the pioneers were dead. Many people think that it is not a good time to enter this field, and it should be a desktop computer that is on the rise to make more money.
  Lin Baili ignored the opinions of the outside world. He set the “three no’s” principle of not participating in exhibitions, not accepting interviews, and not conducting diversified operations, and devoted himself to his own business.
  This situation continued for ten years, until 1997, when a piece of news broke the sky—Quanta defeated more than a dozen companies participating in the competition at one stroke, and successfully won the order from Dell, the world’s leading notebook brand.

  Two years later, Quanta successfully entered the capital market again. According to common sense, it is really difficult for such an enterprise to continue to keep a low profile.
  But Quanta is still the same as before, in order to avoid media hype about good things. Lin Baili chose to send all the stocks to CHEP without making any transactions. But the media has already flocked to it, and the major technology rich rankings are scrambling to include Lin Baili in their own lists.
  Facing the interview, Lin Baili neither had any ambitious big words, nor did he have an imposing blueprint. When Liang Cizhen, the general manager of Quanta at the time, made an exception for the interview, before he could sit still, Lin Baili seriously told him what he could say and what he couldn’t say, emphasizing many times “don’t give others a trick”.

  But as Quanta became more and more famous in the industry. Many stories are still slowly surfacing. In the early years, in order to get new orders, Lin Baili often took his computer to show customers. Back then, one laptop weighed seven or eight catties. Lin Baili carried one, and his colleagues carried two. In addition, they also brought a printer. As long as the customer showed any tendency, he would immediately print out a brand new quotation.
  At that time, Lin Baili walked around the streets with a computer on his back during the day, and lived in a motel with a strong smell at night. After a whole day, Lin Baili and his colleagues had purple and black suspender marks on their shoulders.
  A customer once threw a Quanta computer on the ground in front of Lin Baili, but he picked it up politely and said with a smile, “Look, the things designed by Quanta can’t be broken if you drop them like this, which shows how good the quality is. . ”
  Among the companies that were constantly “annoyed” during that time, Dell, the world-class laptop brand, was one of them. Originally, Dell didn’t need to pay attention to the unknown Quanta at all, but Lin Baili still came to sell it again and again. Dell’s business managers even saw Lin Baili several times a month.

  In 1997, a partner of Dell had a quality control problem, and the founder of Dell, Michael Dell, had to go to Taiwan to find a foundry again. The business manager of Dell, who was already familiar with Quanta, introduced Lin Baili, who was still persevering at the time. . Lin Baili lived up to this opportunity. Relying on Quanta’s technological capabilities, he caught up with the foundry technology level required by Dell in just a few months. The following year, Quanta shipped one million notebook computers.
  This kind of inspirational story, combined with the low-key style of Lin Baili and Quanta, has ushered in such evaluations in the industry – Lin Baili and Quanta act like turtles, only seeing the goal step by step, without revealing it , but firmly bite on it.
love each other

  Although they are located in the same place, the competition between Lin Baili’s Quanta and Guo Taiming’s Hon Hai has never stopped.
  Quanta was once the largest customer of Hon Hai’s notebook computer connectors, and Lin Baili and Guo Taiming were also very friendly, often having dinner and drinking together.
  At a dinner party in 2004, Guo Taiming even hugged Lin Baili from behind suddenly, and directly called Lin Baili “big brother” in front of the media. In 2005, Guo Taiming even directly vowed that as long as Quanta was there, he would never enter the notebook computer OEM market.
  Unfortunately, only three years later, Lin Baili ushered in a real “sneak attack” by Guo Taiming.
  In 2008, when the economic crisis broke out, sales of desktop computers declined, but sales of notebook computers grew at a rate of 15%. At that time, half of the desktop computers in the world were basically produced by Hon Hai.
  When Hon Hai’s revenue myth of relying on desktop computers was no longer there, Guo Taiming had to break his oath and began to enter notebook computers.
  In March 2009, a senior deputy general manager of Quanta, together with nearly 60 Quanta employees, were successively poached by Hon Hai.
  Seeing this situation, Lin Baili said bluntly: “None of our good employees were poached away, and there was no success in poaching them.” After that, the employees who were poached were changed from “resigned” to “dismissed”.

  But this is just the beginning. On the one hand, Lin Baili began to collect evidence on Hon Hai’s actions in the notebook computer market, and was ready to fight at any time. The one billion yuan MacBook order was snatched back.
  The audience was pinching hard, but the stage still maintained a superficial harmony. After a period of time, Guo Taiming and Lin Baili attended the dinner event of the Ministry of Industry and Information Technology of China at the same time. Guo Taiming held Lin Baili’s hand tightly and kept saying to the spotlight: “You see our fingers are intertwined, this is my forever big brother. ”
  But back to the stage, the fight is even worse. In 2010, during Quanta’s final banquet, Lin Baili, dressed as Monkey King, uttered cruel words on stage: “I will not go to the blue sea, because one day it will become a red (Hong) sea, and I will go to the cloud.” Soon
  , Including Facebook and Google have become Quanta’s major customers in the field of cloud server equipment.
Definitely mainland

  What followed was an all-round fight between Quanta and Hon Hai. In 2014, Hon Hai signed a contract with Hewlett-Packard to enter the cloud server OEM, and then, from the cloud to medical care and then to electric vehicles, the layout of both parties followed suit.
  On the main battlefield, with the rise of Apple, the fight between Quanta, Hon Hai and other supply chain companies has become more intense.
  According to Quanta’s annual report, after 2015, although the revenue has continued to rise, the net profit margin has remained low. In 2015, it happened to be the same year that Apple Watch was launched. In the following years, Apple Watch was exclusively produced by Quanta.
  Quanta is clearly dissatisfied with some of Apple’s foundry business, which has low gross profit and drags down financial reports. In 2019, there were sudden rumors in the market that Quanta would withdraw from “Apple Watch assembly”. Lin Baili said meaningfully: “Do what makes money. Others are not important. Making money is the most important thing.”

  In 2020, Quanta will gradually spin off its Apple business, leaving only MacBook assembly. On the other hand, Hon Hai chose the path of being more closely bound with Apple.
  In October 2022, Apple’s supply chain market reported that due to the impact of the Sino-US trade war, Apple intends to set up a Mac production line in Thailand.
  At the same time, the supply ratio of Apple’s main Mac suppliers, Quanta and Hon Hai, also changed from 8:2 to 6:4.
  Among them, there is Quanta’s deliberate alienation. But another reason cannot be ignored. Although Lin Baili and Guo Taiming both seized the opportunities in the mainland to rise, it is obvious that Lin Baili is more determined than Guo Taiming.
  Today, affected by the Sino-US trade war, Foxconn has established supply chain factories related to Apple in Vietnam, India, Mexico, the Czech Republic, Hungary, the United States and other places, either because of Apple’s requirements or because of low-cost needs.
  Since 2020, Vietnam has become the main manufacturing location for Apple Airpods Bluetooth headsets, and this year it has also begun to manufacture iPads. In April 2022, the factory located near Chennai, India has started producing iPhone 13.
  Although this does not mean that Foxconn will really break away from China, it seems to be a trend.

  In contrast to Quanta. On August 13, 2019, regarding the relocation of the production line out of the mainland, although Lin Baili, the chairman of Quanta, said at the legal person briefing: “I have always been cautious and prepared.” But when it comes to specific plans, Lin
  Baili However, Li is only vague: “Going to Southeast Asia is a certain option, but it has not been decided when to move in. At present, all factories in Southeast Asia have been visited, and the specific location is still being evaluated.” Follow-up reports are even rarer. According to ”
  Thailand According to the information in October 2021 in the Development Report, Quanta invested approximately NT$2 billion (approximately US$63.6 million) in Thailand, and the factories opened in Thailand only added thousands of jobs.
  As a horizontal comparison, Foxconn only needs 300 million US dollars to invest in a new factory in Vietnam.

  In 2022, Huang Jiantang, chairman of Quanta (China) Manufacturing Headquarters, said bluntly: “How can we agree to let the company leave Shanghai and the mainland?”
  Lin Baili said in an interview in the early years: “I think that China’s Hope to be in mainland China. Because they have national self-confidence, and their self-confidence comes from the rise of the market.” In
  2000, the State Council approved the pilot construction of 15 export processing zones, and Shanghai’s Songjiang District was one of them.
  At that time, Quanta happened to be considering building a factory in mainland China, and had just completed an investigation and negotiation in a southern city. After hearing the news from Songjiang District in Shanghai, Quanta personnel made a phone call with the attitude of “riding a donkey to find a horse”.
  Unexpectedly, a phone call was warmly received by the Shanghai Investment Promotion Commissioner. For several months at that time, the investment promotion specialists in Shanghai took turns to watch over the fax machine. Whenever there was a request from Quanta, they would sit down and discuss collectively to ensure that a solution could be given as soon as possible.
  In the end, Lin Baili chose Shanghai and shouted the slogan “build a factory in 100 days”. With the strong cooperation of Songjiang District, the factory was actually built in 100 days. Li Guosui, the person in charge of Quanta Shanghai Manufacturing City, recalled that he was shocked by both the speed of the “100-day factory construction” and the strength of the subsequent cooperation.
  In April 2005, Compal unexpectedly grabbed some orders for Dell notebook computers that had been controlled by Quanta for a long time, and the pressure on Quanta to break through the performance of US$12 billion increased sharply.

  Lin Baili made up his mind to completely shut down the production line in Taiwan, China, and decided to move all related equipment to Shanghai in mid-May.
  After that, the factory area of ​​Quanta Shanghai Manufacturing City was expanded to nearly 1,000 mu, the living area was nearly 500 mu, and the number of employees once reached 80,000. Even now, many old Songjiang people still talk about the hot scenes of the “Quanta 100,000 Army” commuting to and from get off work.
  In 2001, which was the first year when Quanta officially established a factory in the mainland, Lin Baili told reporters in substandard Mandarin: “I hope to use Chinese philosophy to make Quanta an internationally influential company. computer company.”
  Quanta has indeed become an internationally influential company by virtue of its “Chinese philosophy”.
  Today’s Quanta is no longer the company that was only involved in notebook computer OEMs back then. After years of transformation, the cloud business has become an important part of Quanta, contributing approximately 40% of revenue each year. Major cloud customers include international companies including Meta and Google, which account for 17% of the global cloud server market. .
  In the fields of 5G and AR/VR, which have also been popular in recent years, Quanta has also done well. In terms of 5G business, in addition to assisting Rakuten and Panasonic, Quanta has business in South Korea, Singapore, Germany, the United States and other places. In the field of AR/VR, Quanta has formed a research and development team of thousands of people, and it is also rumored that Quanta will win the OEM order of Apple’s AR glasses.
  But what really made Lin Baili explode was his advanced layout of AI. As early as 2004, Lin Baili led a team to the Massachusetts Institute of Technology to learn about AI, and has been attaching great importance to and tracking the development of the industry.
  Lin Baili sensed the new trend as early as 2004, when he quickly sent people to the Massachusetts Institute of Technology to study AI, and since then launched related business layout. In 2016, Quanta took the lead in helping the current global AI giant Nvidia to manufacture the first AI supercomputer, and thus became an important supply chain partner of Nvidia.
  In 2019, Lin Baili stated directly that AI is the future of Quanta. With the support of AI, Quanta will grow faster in the next 10 years than in the past 30 years.
  Also officially relying on AI, Lin Baili, who was worth only US$4.7 billion at the end of last year, doubled his wealth to US$9.4 billion within 7 months, becoming the new richest man in Taiwan.
  Quanta’s achievements are remarkable, but as an entrepreneur who doesn’t like to show his face, Lin Baili has not explained clearly what the “Chinese Philosophy” management thinking he is talking about is. It can be a low-key and pragmatic “walk your own way and do your own thing”, or it can be a forbearance of “keep it secret and persevere”.
  But no matter what, it is enough to be awe-inspiring.

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