Haresh PatelHaresh Patel
https://hareshpatel.ai/
It was 1998, and I was VP of Worldwide Sales at PMC-Sierra during the dot-com boom. We were Wall Street’s darling, building the semiconductors that powered the internet’s backbone. Our chips were the brains behind the routers connecting the world.
But there was one market we refused to touch: China.
“They’ll steal everything we’ve built.” The executive team feared IP theft and reverse engineering. But I watched Huawei and ZTE grow at a blistering pace. I knew we were missing the opportunity of a lifetime.
After months of fighting, I convinced Bob, our CEO, to let me build a China sales team.
We penetrated deep into both Huawei and ZTE. Our semiconductors became the brain of their routers. While the old guard designed technology with thousands of engineers over years, Huawei and Cisco used our chips with hundreds of engineers and brought routers to market in months. They moved at internet speed while dinosaurs sat in committee meetings.
Revenue was pouring in.
Then the whispers started: Huawei was reverse engineering our technology.
Bob pulled me aside. “Find out what’s happening.”
What we uncovered wasn’t courtroom-ready, but damning enough. We decided fast.
I drafted a letter to Huawei’s CEO: We were stopping all chip sales immediately. Since we were their sole source, we’d shut down their growth overnight. No chips, no routers. No routers, no revenue.
The response came within hours.
Their CEO personally flew to California for an emergency meeting.
We met at the Santa Clara Marriott. Neutral ground where billion-dollar relationships get made or broken.
Myself, Bob, my sales manager Tony, and Huawei’s CEO sat across a conference table. His opening was textbook: chips were too expensive, no motivation to steal. We both knew the stakes. They needed us far more than we needed them.
We hammered out a minor price concession. They signed a memorandum immediately ceasing any reverse engineering.
No lawyers. No legal review. No weeks of back-and-forth.
We drafted it in that conference room. Both parties signed, shook hands, walked out. One afternoon. Old-school dealmaking.
We continued selling tens of millions for several years. Eventually, they replaced our technology—inevitable. The question was whether we’d capture the growth phase or watch from the sidelines.
But here’s the real victory: Nortel, Ericsson, Nokia—getting clobbered by Huawei and Cisco’s speed—finally abandoned their “not invented here” mentality and started using our chips.
We won both sides of the war.
The lesson wasn’t about IP protection or China strategy. It was about leverage, timing, and courage to make bold moves when you hold the cards. We could have lawyered up and spent years in litigation. Instead, we sat their CEO in a Marriott and reminded him we were the sole source powering his rise.
Sometimes the most powerful negotiation happens when you’re willing to walk away entirely, and making someone fly 6,000 miles.
