A consortium led by Alibaba Group Holding Ltd (阿里巴巴) has emerged as the frontrunner to take over Tsinghua Unigroup Co (清華紫光), a deal that could fetch more than 50 billion yuan (US$7.8 billion) to help keep China’s indebted chip champion afloat.
The Chinese government is leaning toward the Alibaba-led offer given the e-commerce giant’s financial heft and the potential synergies with its own cloud and semiconductor business, people familiar with the matter said.
The consortium, which includes funds backed by the Zhejiang Provincial Government, is edging out several competitors for Beijing-based Unigroup, several other people said, asking not to be identified as the information is private.
Photo: Reuters
A successful deal could help avert one of China’s biggest potential corporate failures, while securing for Alibaba valuable chip know-how and a supply of semiconductors to fuel the country’s largest cloud computing platform.
While the transaction is expected to be completed as soon as next month, negotiations are ongoing and details on timeline, deal size and a final buyer could still change, they said.
Billionaire Jack Ma’s (馬雲) empire is mostly known for its e-commerce leadership, but the Hangzhou-based firm that he cofounded has in the past few years made enormous headway into computing and last month unveiled one of the country’s most advanced chips.
A deal could help Alibaba score points with Beijing, which punished the e-commerce giant for monopolistic behavior, but also wants to reduce its reliance on the US for chips.
Any deal is likely to include conditions for restructuring more than 100 billion yuan of onshore and offshore debt that Unigroup has, another person familiar with the discussions said.
Alibaba representatives had no immediate comment, while a Unigroup spokesperson did not immediately respond to requests for comment.
Aside from the Alibaba-led consortium, several state-backed companies, including semiconductor investment fund JAC Capital (建廣資產管理), Wuxi Industry Development Group Co (無錫產業發展集團) and Beijing Electronics Holding Co (北京電子控股) also weighed bids, the people said.
The Beijing-based company, which is affiliated with China’s Tsinghua University, remains a linchpin in a race for technological supremacy with the US.
The Chinese semiconductor titan last year defaulted on a bond and in July a court ordered it to overhaul its debt, prompting it to invite strategic investors with deep pockets as well as the capability to run a major chip-making and cloud business.
Confidence that Unigroup’s distressed assets would not get left in limbo grew after a debt-workout plan in May for its peer, Peking University Founder Group Corp (北大方正集團).
Under the plan, Founder, which is linked to another of China’s academic institutions, is to receive billions of dollars from strategic investors, including a state-owned property developer.
Shares of contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) came under pressure yesterday after a report that Apple Inc is looking to shift some orders from the Taiwanese company to Intel Corp. TSMC shares fell NT$55, or 2.4 percent, to close at NT$2,235 on the local main board, Taiwan Stock Exchange data showed. Despite the losses, TSMC is expected to continue to benefit from sound fundamentals, as it maintains a lead over its peers in high-end process development, analysts said. “The selling was a knee-jerk reaction to an Intel-Apple report over the weekend,” Mega International Investment Services Corp (兆豐國際投顧) analyst Alex Huang
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is expected to remain Apple Inc’s primary chip manufacturing partner despite reports that Apple could shift some orders to Intel Corp, industry experts said yesterday. The comments came after The Wall Street Journal reported on Friday that Apple and Intel had reached a preliminary agreement following more than a year of negotiations for Intel to manufacture some chips for Apple devices. Taiwan Institute of Economic Research (台灣經濟研究院) economist Arisa Liu (劉佩真) said TSMC’s advanced packaging technologies, including integrated fan-out and chip-on-wafer-on-substrate, remain critical to the performance of Apple’s A-series and M-series chips. She said Intel and Samsung
TRANSITION: With the closure, the company would reorganize its Taiwanese unit to a sales and service-focused model, Bridgestone said Bridgestone Corp yesterday announced it would cease manufacturing operations at its tire plant in Hsinchu County’s Hukou Township (湖口), affecting more than 500 workers. Bridgestone Taiwan Co (台灣普利司通) said in a statement that the decision was based on the Tokyo-based tire maker’s adjustments to its global operational strategy and long-term market development considerations. The Taiwanese unit would be reorganized as part of the closure, effective yesterday, and all related production activities would be concluded, the statement said. Under the plan, Bridgestone would continue to deepen its presence in the Taiwanese market, while transitioning to a sales and service-focused business model, it added. The Hsinchu
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has approved a capital budget of US$31.28 billion for production expansion to meet long-term development needs during the artificial intelligence (AI) boom. The company’s board meeting yesterday approved the capital appropriation plan for purposes such as the installation of advanced technology capacity and fab construction, the world’s largest contract chipmaker said in a statement. At an earnings conference last month, TSMC forecast that its capital expenditure for this year would be at the higher end of the US$52 billion to US$56 billion range it forecast in January in response to robust demand for 5G, AI and
RSS