Wed, Jul 27, 2016 - Page 12 News List

Tsinghua Unigroup and XMC merging chip operations to create Chinese giant

Bloomberg

Tsinghua Unigroup Ltd (清華紫光) merged its memory chipmaking operations with the Chinese government-run XMC (武漢新芯集成電路), creating one of China’s largest manufacturers of semiconductors.

The company is folding XMC, also known as Wuhan Xinxin Semiconductor Manufacturing Corp, into its growing portfolio of assets and consolidating their combined production capacity, Tsinghua’s billionaire chairman Zhao Weiguo (趙偉國) said via e-mail.

The newly merged entity is called Changjiang Storage Co with Zhao as chairman, he said.

Tsinghua, an affiliate of the prestigious Beijing university of the same name, harbors ambitions of becoming a global player in semiconductors. It has pursued deals around the globe as the standard-bearer of China’s effort to build a local industry giant and wean the country off foreign technology. Its core business of semiconductors is seen by the nation’s political leadership as vital to national security.

The company is just one of several affiliates of state-backed Tsinghua University, the school that has produced Chinese leaders from President Xi Jinping (習近平) to his predecessor Hu Jintao (胡錦濤). Other arms include Tsinghua Unisplendour Co (清華股份有限公司) and Tsinghua Tongfang Co (清華同方).

Together they have spearheaded a spate of high-profile acquisitions in recent years. Unigroup bought RDA Microelectronics Inc and Spreadtrum Communications Inc (展訊), and came close to a potential US$23 billion bid for Micron Technology Inc.

However, it withdrew from a US$3.8 billion investment in Western Digital Corp in the face of a US security review.

Its latest target, XMC, began operations in 2008 and says it is one of the largest players in domestic semiconductors.

It has unveiled plans to participate in the building of a US$24 billion semiconductor manufacturing mega-complex that the government is establishing in its home province.

An XMC spokeswoman contacted by phone said she was not immediately able to comment.

Closely held Unigroup had sales of 52 billion yuan (US$8 billion) last year with an after-tax profit of 3.9 billion yuan, according to the company.

In its chip design business, profit came to US$200 million on sales of 13.5 billion yuan.

Its target, XMC, began operations in 2008 as a foundry for memory chip and image sensor production.

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