Chinese conglomerate wants to supply flash memory for domestic market
Chinese conglomerate Tsinghua Unigroup has revealed its ambition to become the world’s third largest silicon vendor.
The chairman of the state-backed venture Zhao Weiguo told Reuters that it plans to spend $47 billion over the next five years in order to grow its semiconductor manufacturing capabilities. A portion of the funds will be invested into companies in the US.
Chip manufacturing is a strategic priority for China, a country which currently imports the overwhelming majority of flash memory it uses from overseas.
Tsinghua Unigroup previously attempted to acquire American memory specialist Micron Technology for $23 billion but the deal didn’t go through, derailed by concerns about national security.
3D NAND wafer
Tsinghua Unigroup is a subsidiary of Tsinghua Holdings, a commercial organization that was established in 2003 to manage businesses spun out of Tsinghua University. It owns a very wide range of subsidiaries across China’s technology industry.
In 2013, Tsinghua Unigroup acquired domestic chip designers Spreadtrum Communications and RDA Microelectronics, prompting suggestions that the company was used as a vehicle to consolidate smaller silicon vendors across China and build them into a single entity that could compete on the global stage.
Weiguo said Tsinghua Unigroup is currently in talks with a major US chip vendor about a stake in its business. He said a deal could be reached before the end of the month.
Tsinghua Unigroup is also planning to collaborate with an unknown US company on a $14 billion chip manufacturing facility in China.
The world’s largest semiconductor vendor is Intel, followed by Samsung and San Diego-based Qualcomm – and it is Qualcomm Tsinghua Unigroup is planning to overtake.
According to Weiguo, the company is mostly interested in NAND chips for flash memory, and has no plans to make DRAM chips.
Tsinghua Holdings figured in the recently announced acquisition of SanDisk by Western Digital. Unisplendour Corporation – another subsidiary of Tsinghua Holdings – agreed to invest $3.8 billion into Western Digital in exchange for a 15 percent stake in the company, enabling WD to bid almost $19 billion for flash specialist SanDisk.