A little-known Chinese company that styles itself one of the world’s biggest smartphone manufacturers is to acquire Dutch chipmaker Nexperia for 25.2 billion yuan (US$3.63 billion), a megadeal that needs US approval at a time when US concerns about China’s rise run high.
Wingtech Technology Co (聞泰科技) would effectively acquire 75.86 percent of Nexperia, which NXP Semiconductors NV sold to a consortium of Chinese investors in 2016.
It is to consolidate control of the Dutch chipmaker under a company that assembles devices for smartphone brands from Huawei Technologies Co (華為) to Lenovo Group Ltd (聯想) and Xiaomi Corp (小米).
China has been trying to free itself from a reliance on foreign technology, investing billions of dollars in the semiconductors considered vital to national security.
However, the deal for Nexperia requires approval from the US Committee on Foreign Investment, an agency that has already torpedoed a number of high-profile deals over the past year.
Concerns about China’s acquisition of technology have grown since US President Donald Trump accused the world’s second-largest economy of unfairly getting its hands on valuable intellectual property.
BRANCHING OUT
Wingtech itself is not a name that travels beyond tech industry circles.
It was founded in 2006 by Zhang Xuezheng (張學政), a former engineer-turned-executive at ZTE Corp (中興) — the telecoms gear giant that incurred US ire this year for violating export sanctions.
Like iPhone assembler Hon Hai Precision Industry Co (鴻海機密), Wingtech makes devices on behalf of other brands, such as Xiaomi’s low-end Redmi.
However, it is now trying to build up its semiconductor capabilities, including in chip design, manufacturing and packaging, and has said that it would grow its research and development arms in Shenzhen, Xian and Shanghai.
Wingtech has not fully outlined how is to bankroll the acquisition of Nexperia, which supplies automotive and industrial clients with components from diodes to logic packages.
The Chinese company in a filing on Thursday said that it would raise 4.63 billion yuan by issuing up to 127.45 million shares — still a fraction of the intended outlay.
Its shares have been suspended from trade since April, when it disclosed an outline of the deal and its market value stood at 19.4 billion yuan. The company reported about 16.8 billion yuan in revenue last year.
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