State-owned Tsinghua Unigroup continues investing in overseas companies in a bid to strengthen its presence in the semiconductor industry. (Photo : www.tech01.us)
State-owned chipmaker Tsinghua Unigroup Ltd. has signed a deal on Friday, Oct. 30, with Powertech Technology Inc. offering to buy $600 million worth of stakes in the Taiwanese company, the Wall Street Journal reported.
The report said that with a 25-percent stake and the new share issue, Tsinghua Unigroup will become the Taiwanese chip packaging and testing company's biggest shareholder.
Tsinghua's recent deal is a reflection of China's expansion in the semiconductor industry by overseas acquisitions and domestic development. China, which lags behind the U.S. in chip technology, has underscored the importance of semiconductors as crucial to national security and vowed to invest billions for development.
Powertech said that Tsingua's investment would be used to expand the company's assembly capacity in Taiwan, develop advanced production processes and recruit talent. Powertech would also become Tsinghua Unigroup's major chip assembly and testing partner, the report said.
According to news released after the close of Taiwan stock exchange trading on Friday, Oct. 30, Powertech's shares rose 3.5 percent to 72 New Taiwan dollars ($2.22).
As Tsinghua Unigroup became China's largest chip design company through acquisitions, it attracted attention this year when it offered to buy U.S. chipmaker Micron Technology Inc. for $23 billion, which would have been the largest Chinese overseas takeover had it succeeded.
Sources said that the Micron talks failed as prospects of U.S. regulatory approval were unclear, sending Tsinghua Unigroup to make other investments overseas.
The report added that by the end of September, an arm of Tsinghua Unigroup has announced that it is ready to pay $3.78 billion for a 15-percent share in U.S. disk drive maker Western Digital Corp. In October, Tsinghua recruited Charles Kau, the head of Taiwan memory chipmaker Inotera Memories Inc.
The report said that Tsinghua Unigroup agreed in May to acquire a 51-percent stake in a networking unit of Hewlett-Packard Co. for $2.3 billion.
