China has taken its biggest step toward creating a national champion in global semiconductors with a planned US$13 billion private placement by an affiliate of Tsinghua Unigroup Ltd (清華紫光) to build a chip plant and fund expansion.
Raising cash will bankroll a move into the mainstream memory market for China, given Taiwanese producers lack enough capital for expansion, Tsinghua Unigroup president Zhao Weiguo (趙偉國) said in an e-mailed response to questions.
Affiliates of state-backed Tsinghua University, including Unigroup, are becoming the vehicle for China to wean itself off foreign semiconductor technology with an acquisition spree that includes a stake in Western Digital Corp.
As the country bulks up homegrown technology, the global chip industry is undergoing a seismic shift, with more than US$100 billion in deals pending or completed this year, according to data compiled by Bloomberg.
“The chip sector is entering the era of giants, with accelerating integration,” billionaire Zhao said. “During the process, capital will play an important role.”
China’s move to develop its technology is seen by the government as crucial to national security and is also intertwined with moves to make its economy less dependent on the smokestack industries that have underpinned its ascendance.
While the recent deals give Tsinghua scale, China’s ability to seriously challenge Samsung Electronics Co, Toshiba Corp and Micron Technology Inc in memory will come down to accessing technology, analysts at China International Capital Corp (CICC, 中國國際金融) said.
“China is capable of manufacturing semiconductors, but lacks mainstream DRAM and NAND flash technologies, which are possessed by international giants,” CICC analysts led by Andrew Lin (林榮彥) yesterday said in a report.
Tsinghua affiliate Tongfang Guoxin Electronics Co (同方國芯電子) will sell 80 billion yuan (US$13 billion) of stock to eight companies and employees in the placement, the company said in a filing to the Shenzhen Stock Exchange on Thursday.
Of the proceeds, 60 billion yuan will go toward a memorychip plant.
Among the eight companies buying shares, six are controlled by Tsinghua Holdings Co (清華控股), which will remain the controlling shareholder of Tongfang Guoxin after the deal, according to the filing.
The companies will purchase the shares with cash.
The money being raised is four times Tongfang’s 20 billion yuan market value when its shares were suspended last month. The stock yesterday surged by the 10 percent daily limit in Shenzhen.
“The new Tongfang Guoxin will be the only listed platform for semiconductors,” Zhao said. “In the future, it will be an important platform for Unigroup’s chip sector. Our goal is that we will develop Tongfang Guoxin as a global chip giant.”
Tsinghua’s acquisitive ways has seen it consider bidding for Micron, people familiar with the matter said in July.
Deals that have reached a formal stage include Tsinghua Unisplendour Corp’s (紫光) purchase of a US$3.8 billion stake in Western Digital and Unigroup’s acquisition of Spreadtrum Communications Inc (展訊) and RDA Microelectronics Inc (銳迪).
HORMUZ ISSUE: The US president said he expected crude prices to drop at the end of the war, which he called a ‘minor excursion’ that could continue ‘for a little while’ The United Arab Emirates (UAE) and Kuwait started reducing oil production, as the near-closure of the crucial Strait of Hormuz ripples through energy markets and affects global supply. Abu Dhabi National Oil Co (ADNOC) is “managing offshore production levels to address storage requirements,” the company said in a statement, without giving details. Kuwait Petroleum Corp said it was lowering production at its oil fields and refineries after “Iranian threats against safe passage of ships through the Strait of Hormuz.” The war in the Middle East has all but closed Hormuz, the narrow waterway linking the Persian Gulf to the open seas,
Apple Inc increased iPhone production in India by about 53 percent last year and now makes a quarter of its marquee devices there, reflecting the US company’s efforts to avoid tariffs on China. The company assembled about 55 million iPhones in India last year, up from 36 million a year earlier, people familiar with the matter said, asking not to be named because the numbers aren’t public. Apple makes about 220 million to 230 million iPhones a year globally, with India’s share of the total increasing rapidly. Apple has accelerated its expansion in the world’s most populous country in recent years, bolstered
HEADWINDS: The company said it expects its computer business, as well as consumer electronics and communications segments to see revenue declines due to seasonality Pegatron Corp (和碩) yesterday said it aims to grow its artificial intelligence (AI) server revenue more than 10-fold this year from last year, driven by orders from neocloud solutions clients and large cloud service providers. The electronics manufacturing service provider said AI server revenue growth would be driven primarily by the Nvidia Corp GB300 server platform. Server shipments are expected to increase each quarter this year, with the second half likely to outperform the first half, it said. The AI server market is expected to broaden this year as more inference applications emerge, which would drive demand for system-on-chip, application-specific integrated circuits
PROJECTION: TSMC said it expects strong growth this year, with revenue in US dollars projected to grow by about 30 percent, outperforming the industry Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) yesterday reported consolidated sales last month reached NT$317.66 billion (US$9.98 billion), the highest ever for the month of February, driven by robust demand for chips built using the company’s advanced 3-nanometer (3nm) process. Last month’s figure was up 22.2 percent from a year earlier, but fell 20.8 percent from January, the world’s largest contract chipmaker said in a statement. For the first two months of the year, TSMC posted cumulative sales of NT$718.91 billion, up 29.9 percent from a year earlier. Analysts attributed the growth to sustained global demand for artificial intelligence (AI) products
RSS