Zhao Weiguo (趙偉國) knew the only way to avoid a future raising pigs and herding sheep in rural China was education. Thirty years after enrolling in Tsinghua University, the billionaire is using the backing of his alma mater to build a technology empire.
Deals to buy chip designers, along with partnerships with Hewlett-Packard Co and Intel Corp, have helped his Tsinghua Unigroup Ltd (紫光集團) assemble a business spanning cloud computing, mobile and semiconductors. Now the company is said to plan offering US$23 billion for Micron Technology Inc to take on Samsung Electronics Co in the hotly contested memorychip industry.
Tsinghua Unigroup’s acquisition spree comes as Chinese President Xi Jinping’s (習近平) government tries to move China away from a heavy reliance on foreign technology, with semiconductors seen as vital to national security.
Zhao said his strategy is driven by the needs of building a sustainable business, rather than any political agenda.
“I am an entrepreneur. My main job is to manage well the operation of our enterprise,” he said in an e-mail to media, declining to comment on Micron. “Food should be eaten piece-by-piece. The road should be hit step-by-step. Our decisions will be combined with industry trends and Unigroup’s own conditions.”
His company, the investment arm of Tsinghua University, has announced more than US$4 billion of acquisitions in the past two years, according to data compiled by Bloomberg. Tsinghua Unigroup has not commented on Micron and the Boise, Idaho-based company said it has yet to receive an offer.
Zhao’s emergence as a tech billionaire is a long way from his birth in remote Xinjiang in northwestern China, a region that borders Mongolia and Kyrgyzstan. His childhood home in a small village is closer to Kabul than Beijing or Shanghai.
“I raised pigs and herded sheep for living. I knew that only education could change my fate,” he wrote.
The 48-year-old paid his way through college by fixing televisions and writing computer software. After graduation, he found a job in Beijing’s Zhongguancun area, which has gained a reputation as China’s Silicon Valley with companies including Lenovo Group Ltd (聯想) and Baidu Inc (百度) calling it home.
Tsinghua founded what later became Unigroup in 1988, acting as an investment arm of the university. In a 2010 privatization, a firm controlled by Zhao became Unigroup’s second-biggest shareholder after the university.
“Zhao Weiguo has his unique way for investments. When he targets a company, he considers it for a long time and then makes an offer very quickly,” said Gu Wenjun (顧文軍), chief analyst at iCwise (芯謀諮詢), a Shanghai-based consulting company. “He has said that China lacks a memorychip business, so this is a chance here.”
While the potential takeover of Micron comes less than two months after Zhao cautioned that the valuations of Chinese chipmakers are becoming too expensive and entering a “serious bubble,” he rejected suggestions that he had changed his mind.
“I never changed my passion and determination for the chip business,” he wrote. “I like to choose positively, rather than passively accept.”
Tsinghua Unigroup in February said it received 10 billion yuan (US$1.6 million) of state-backed funding over five years to invest in chip companies, while one of its affiliates agreed in May to buy control of Hewlett-Packard’s Chinese networking and server businesses for US$2.3 billion.
Other deals from Tsinghua include the acquisition or RDA Microelectronics Inc (銳迪科微電子) and Spreadtrum Communications Inc (展訊通信).
This week, the company also invested US$100 million for a minority stake in software startup Acadine Technologies(明辨科技), adding smartphone operating systems to its stable of chips and servers.
Acadine is building a competing operating system called H5OS, based on the HTML5 software technology used in Web browsers and employed by Mozilla Corp in its development of Firefox OS. A unit of Tsinghua Unigroup is likely to be the sole investor in the first round of funding, taking a non-controlling stake.
Zhao has amassed a fortune of at least US$2 billion, according to the Bloomberg Billionaires Index.
He said he has already donated US$100 million toward education and pledged the bulk of his fortune to his 104-year-old alma mater in Beijing, which counts Xi and former Chinese president Hu Jintao (胡錦濤) among its alumni.
“Education has changed my life so I have passion for the education sector,” Zhao wrote in the e-mail. “I have promised to donate 70 percent of my personal wealth to Tsinghua University.”
MULTIFACETED: A task force has analyzed possible scenarios and created responses to assist domestic industries in dealing with US tariffs, the economics minister said The Executive Yuan is tomorrow to announce countermeasures to US President Donald Trump’s planned reciprocal tariffs, although the details of the plan would not be made public until Monday next week, Minister of Economic Affairs J.W. Kuo (郭智輝) said yesterday. The Cabinet established an economic and trade task force in November last year to deal with US trade and tariff related issues, Kuo told reporters outside the legislature in Taipei. The task force has been analyzing and evaluating all kinds of scenarios to identify suitable responses and determine how best to assist domestic industries in managing the effects of Trump’s tariffs, he
TIGHT-LIPPED: UMC said it had no merger plans at the moment, after Nikkei Asia reported that the firm and GlobalFoundries were considering restarting merger talks United Microelectronics Corp (UMC, 聯電), the world’s No. 4 contract chipmaker, yesterday launched a new US$5 billion 12-inch chip factory in Singapore as part of its latest effort to diversify its manufacturing footprint amid growing geopolitical risks. The new factory, adjacent to UMC’s existing Singapore fab in the Pasir Res Wafer Fab Park, is scheduled to enter volume production next year, utilizing mature 22-nanometer and 28-nanometer process technologies, UMC said in a statement. The company plans to invest US$5 billion during the first phase of the new fab, which would have an installed capacity of 30,000 12-inch wafers per month, it said. The
Taiwan’s official purchasing managers’ index (PMI) last month rose 0.2 percentage points to 54.2, in a second consecutive month of expansion, thanks to front-loading demand intended to avoid potential US tariff hikes, the Chung-Hua Institution for Economic Research (CIER, 中華經濟研究院) said yesterday. While short-term demand appeared robust, uncertainties rose due to US President Donald Trump’s unpredictable trade policy, CIER president Lien Hsien-ming (連賢明) told a news conference in Taipei. Taiwan’s economy this year would be characterized by high-level fluctuations and the volatility would be wilder than most expect, Lien said Demand for electronics, particularly semiconductors, continues to benefit from US technology giants’ effort
‘SWASTICAR’: Tesla CEO Elon Musk’s close association with Donald Trump has prompted opponents to brand him a ‘Nazi’ and resulted in a dramatic drop in sales Demonstrators descended on Tesla Inc dealerships across the US, and in Europe and Canada on Saturday to protest company chief Elon Musk, who has amassed extraordinary power as a top adviser to US President Donald Trump. Waving signs with messages such as “Musk is stealing our money” and “Reclaim our country,” the protests largely took place peacefully following fiery episodes of vandalism on Tesla vehicles, dealerships and other facilities in recent weeks that US officials have denounced as terrorism. Hundreds rallied on Saturday outside the Tesla dealership in Manhattan. Some blasted Musk, the world’s richest man, while others demanded the shuttering of his
RSS