Chinese Chip Giant Tsinghua Unigroup to Build Memory Factory
November 05 2015 - 12:00PM
Dow Jones News
BEIJING—Tsinghua Unigroup Ltd. plans to plow more than $12
billion into a new memory chip plant and semiconductor
acquisitions, as the Chinese state-owned company continues a drive
to build a globally competitive chip maker.
Months after an unsuccessful effort to acquire U.S. memory chip
maker Micron Technology Inc., Tsinghua Unigroup will build a memory
chip factory and make further acquisitions through a newly acquired
subsidiary, Tongfang Guoxin Electronics Co., according to a
Tongfang Guoxin filing on the Shenzhen stock exchange Thursday.
The investments will be Tsinghua Unigroup's latest in a buying
spree this year. They come as China's leaders have made it a
national priority to reduce the country's dependence on western
technology and build domestic technology champions.
"The integrated circuit sector has obtained strong support from
national policy," said Tongfang Guoxin in the filing, in discussing
its reasons for building the plant.
"Guoxin" means "national microchip" in Chinese.
Tongfang Guoxin said in the filing that it will raise 80 billion
yuan ($12.6 billion) in a private placement, with the majority of
the funds coming from Tsinghua Unigroup and an investment company
controlled by Tsinghua Unigroup's chairman Zhao Weiguo.
Unlisted Tsinghua Unigroup announced Monday it would buy a
controlling 36.4% stake in Tongfang Guoxin, a listed sister company
in the same influential state-owned conglomerate Tsinghua Holdings
Co. But Tsinghua Unigroup's and Mr. Zhao's combined share of
Tongfang Guoxin will climb to around 88% after the private
placement, just shy of the 90% threshold that would require
delisting from the Shenzhen stock exchange, two people familiar
with the deal said. The transaction consolidates two chipmaking
rivals within Tsinghua Holdings.
Of the new funds, 60 billion yuan will go toward a new memory
chip plant, and 16.2 billion yuan toward acquisitions "upstream and
downstream in the microchip supply chain." The remaining 3.8
billion yuan will go toward Tsinghua Unigroup's purchase of a 25%
stake in Taiwan's Powertech Technology Inc., which was announced on
Friday.
Tsinghua Unigroup has been active as of late. In October, it
hired Charles Kau, the head of Taiwan memory chip maker Inotera
Memories Inc., a joint venture between Micron and Taiwan's Nanya
Technology Corp. The company struck a deal in September to buy a
15% stake in U.S. disk drive maker Western Digital Corp. It
acquired a controlling stake in Hewlett-Packard Co.'s China
networking gear unit earlier in the year.
Write to Eva Dou at eva.dou@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires
(END) Dow Jones Newswires
November 05, 2015 12:45 ET (17:45 GMT)
Copyright (c) 2015 Dow Jones & Company, Inc.
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