There are few books or files on the shelf behind Lee's desk, located in one of Silicon Valley's office complexes. Hanging on the wall next to a round table are notes written on a whiteboard from the last meeting; outside his office 30 employees are huddled behind partitions. This is ApaceWave, the third major businesses undertaking of the Silicon Valley ethnic Chinese entrepreneur.

Lee's name has frequently appeared of late in Taiwan financial news. In July there were changes in the board of directors of CyberTan Technology at the Hsinchu Science-Based Industrial Park. The Foxconn group, a major shareholder in CyberTan, sent Lee, originally an independent CyberTan board member, to take over as board chairman. As a result, he will certainly be increasing his trips between the Bay area and Taiwan in the future.

Lee Gwong-yih's second company, TransMedia, was named by the San Jose Mercury News as one of the nine brightest, new start-up companies in the US. Sniffing out technological change, Lee Gwong-yih once again traveled the path to the creation of a new company.

Communication craze

Between the time he turned over his second business and began his third, Lee took a one-year respite. "For a time I thought about taking it easy and traveling, but I felt it was too early, that retirement would be boring," says the 51-year-old. Friends his own age were still working, and older friends couldn't afford it. In the blood of the entrepreneur lay hidden the gene of a "courier horse" whose legs would not be stilled.

The name of the new company was ApaceWave, meant to convey the idea of catching the wave and rising up with it. Lee saw the changing network technology trend and once again reached out and took the matter in hand.

Last August he got the "feeling" a major change in the world of global communications was coming, and at year's end the US Institute of Electrical and Electronics Engineers agreed on WiMax as the platform for wireless network access for a new generation of communications. The hope was gradually to replace the WiFi wireless area network and 3G (cellphone) technology that had come of age in the 1990s in order to solve the problem of long-distance wireless data transmission.

After setting up ApaceWave in September 2005, Lee raised US$14 million within four months. This capital came from diverse sources, including Venrock (the venture capital arm of Rockefeller of the US), Doll Capital, the Silicon Valley Chinese ethnic company Trident Microsystems, Taiwan's WK Technology Fund and Fu-Shin Venture Capital, as well as China's Huahong Group. Obviously, many venture capital companies had a great deal of faith in him. But how did he persuade his investors to dig into their pockets?

"WiMax has 40% more bandwidth than 3G. More important, with WiMax, unlike with 3G, you don't have to pay Broadcom a high licensing fee. We see an excellent situation as far as this technology and its market are concerned," says Lee. Telecommunications companies around the world, including Chunghwa Telecom, US BellSouth and British Telecom, are all paying great attention to this market sector.

Lee's new company specializes in designing microchips for mobile communication that meet WiMax specifications and will be used in base stations, cellphones, notebook computers and handheld telecommunications products. Lee analyses the scene and says that currently the two world leaders in communication microchips are Intel and Japan's Fujitsu, but they are still using the telecommunication standards of 2004. If you want to create a business, you must get out in front of the big guys.

Opportunity

Lee Gwong-yih, a graduate of the Department of Control Engineering at National Chiao Tung University, obtained an MS in electrical engineering in 1980 from the State University of New York, Stony Brook and went off to the west-coast paradise of Silicon Valley.

"From the very first day I started work, I thought of beginning my own company," says Lee. Everywhere in the Valley the earlier generation of ethnic Chinese entrepreneurs had left their imprint, and, he supposes, the time now was ripe for opportunities. The telecoms industry was just at the key stage of the switchover from analog to digital and Lee developed a small, inexpensive and powerfully integrated microchip that was technologically very innovative.

In 1994 Lee's 40th birthday present was the purchase of his company, Digicom, by Singapore's Creative Labs for US$40 million. Lee remained three years with Creative as general manager of its digital communications business unit.

In 1997 Lee began his second company, TransMedia, with US$7.5 million. Again, he had "sniffed out" a business opportunity.

In 1996 the US greatly relaxed its telecommunications laws, permitting telecoms, broadcasting and TV companies to engage in cross-sector operations. Telecoms, cable TV and telephone companies thus entered into a period of competition and consolidation and it wasn't long before a significant merger occurred when US telecom leader AT&T bought cable TV operator TCI.

This time Lee saw the great wave approaching that would integrate voice communications, networks, cable TV and data services. His company developed a "multimedia network switch" that could receive different kinds of signals, aggregate them and then send them on quickly over the Internet. The primary customers for this media gateway technology, telephone companies and ISPs, could utilize it to allow consumers simultaneously to use the same cable to view TV, make phone calls and conduct Internet videoconferences.

But small companies have their problems. Although technology is flexible, customers always worry about the manufacturing schedule, supporting capital requirements and the quality of after-sales service. To guard against future problems, the customer might recommend a well-known major manufacturer add the innovative company to its list of acquisitions. TransMedia's reputation began to circulate at Northern Telecom, Ericsson, Cisco and 3Com.

Finally TransMedia was "plucked" by network communications equipment manufacturer Cisco. From the founding of the new company through the development of its products to the final purchase by Cisco for US$500 million took just 15 months. Each of the 66 employees was valued at some US$7 million. Those venture capitalists who had invested with Lee couldn't have been happier. Within a very short time they had made several hundred percent in profit on their investment.

Biding time

Worthy of mention is that Cisco's opening bid was about US$180 million. Cisco's calculation was based on multiplying US$3.5 million by the number of engineers to come up with a figure representing the total value of the company.

But Lee felt this formula was not entirely reasonable and actually punished the company for its "efficiency." Lee says his hole card in the negotiations was to tell Cisco his company had other potential buyers as well as to say to them, "We use the minimum number of the best talent to raise efficiency and then you go ahead and emphasize quantity over quality. If I were to use several times more people to produce our products, do you mean to say our company would be worth more?" Finally Cisco made a new valuation and signed a contract for US$500 million.

Lee Gwong-yih Lee became Cisco's general manager for the "TransMedia" business unit. He later rose to the position of senior director of global solutions and helped develop marketing strategies for the Asian market. Because of the "non-competion clause" in his contract, Lee was almost literally "tied up" for three years, just waiting to retire from the company. In the end, this did not sit well with his personality, and after his contract ran out his lively business start-up gene began to stir.

Although his rewards in the start-up wars had been great, Lee says he doesn't want to lend support to the image of "ethnic Chinese entrepreneurs all beginning companies and then selling them off. The ultimate value in industry is still sustained operations."

Asked what is different in his mind about this third start-up company compared with the first two: "Although the challenge of finding financing and a good team were met, and I was already familiar with the process of starting a company and integrating technology, I knew also that in light of previous successes, this time the hopes of investors, of the team and of myself were higher than ever--and so was the pressure," he says with a smile, noting that in the last six months he has put on at least 20% more gray hair.

Lee Gwong-yih, with his elegant demeanor and seemingly gentle personality, also has his ambitious and insistent side. He says in order not to disappoint the board of directors' expectations, if a member of the team does not take consensus seriously, as a tough taskmaster he is "fully capable of chewing someone out." In another few months some new products will be announced. How far in the future and how big is the businesses opportunity Lee sees with his "telescope"? Let's just wait and see.