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.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, booked its first-ever profit from its Arizona subsidiary in the first half of this year, four years after operations began, a company financial statement showed. Wholly owned by TSMC, the Arizona unit contributed NT$4.52 billion (US$150.1 million) in net profit, compared with a loss of NT$4.34 billion a year earlier, the statement showed. The company attributed the turnaround to strong market demand and high factory utilization. The Arizona unit counts Apple Inc, Nvidia Corp and Advanced Micro Devices Inc among its major customers. The firm’s first fab in Arizona began high-volume production
VOTE OF CONFIDENCE: The Japanese company is adding Intel to an investment portfolio that includes artificial intelligence linchpins Nvidia Corp and TSMC Softbank Group Corp agreed to buy US$2 billion of Intel Corp stock, a surprise deal to shore up a struggling US name while boosting its own chip ambitions. The Japanese company, which is adding Intel to an investment portfolio that includes artificial intelligence (AI) linchpins Nvidia Corp and Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), is to pay US$23 a share — a small discount to Intel’s last close. Shares of the US chipmaker, which would issue new stock to Softbank, surged more than 5 percent in after-hours trading. Softbank’s stock fell as much as 5.4 percent on Tuesday in Tokyo, its
COLLABORATION: Softbank would supply manufacturing gear to the factory, and a joint venture would make AI data center equipment, Young Liu said Hon Hai Precision Industry Co (鴻海精密) would operate a US factory owned by Softbank Group Corp, setting up what is in the running to be the first manufacturing site in the Japanese company’s US$500 billion Stargate venture with OpenAI and Oracle Corp. Softbank is acquiring Hon Hai’s electric-vehicle plant in Ohio, but the Taiwanese company would continue to run the complex after turning it into an artificial intelligence (AI) server production plant, Hon Hai chairman Young Liu (劉揚偉) said yesterday. Softbank would supply manufacturing gear to the factory, and a joint venture between the two companies would make AI data
The Taiwan Automation Intelligence and Robot Show, which is to be held from Wednesday to Saturday at the Taipei Nangang Exhibition Center, would showcase the latest in artificial intelligence (AI)-driven robotics and automation technologies, the organizer said yesterday. The event would highlight applications in smart manufacturing, as well as information and communications technology, the Taiwan Automation Intelligence and Robotics Association said. More than 1,000 companies are to display innovations in semiconductors, electromechanics, industrial automation and intelligent manufacturing, it said in a news release. Visitors can explore automated guided vehicles, 3D machine vision systems and AI-powered applications at the show, along
RSS