China to pour $47 billion into chip industry

A deal could be finalized as early as the end of this month, he said.

A version of this article appears in print on November 17, 2015 of The Himalayan Times.

However, buying a majority stake in the U.S. firm was unlikely as it was too “sensitive” for the USA government, Zhao said without disclosing any further details. “There is an enormous market out there”, he added.

The top five chipmakers control more than 90 per cent of the global NAND chip market after years of boom-and-bust squeezed out smaller players.

Tsinghua Unigroup, which is controlled by the Tsinghua University, looks to be part of China’s long term plans of not relying on foreign semi-conductors as the country plans to convert its military to more modern, digitized armed force.

Facing the increasing threat from China’s emerging “red supply chain” – the fast-growing cluster of high-tech components cultivated by the Chinese government – Taiwan’s semiconductor industry must collaborate with Chinese companies to stay afloat, Taiwanese industry representatives said Sunday. Amid fear of cyberspying, it has also turned its attention to the development of local semiconductor as well as server and network equipment industries.

When China Daily reached out to Unigroup for the “top three” comment, a public relations officer tried to avoid direct comparison with Qualcomm, saying “a leading global chip vendor” would be more in line with the company’s strategy.

The sheer size of Tsinghua Unigroup’s planned investments is nearly equal to Intel’s $50 billion chip revenue past year and could disrupt the NAND chip industry.

That’s according to Reuters, which interviewed Tsinghua chairman Zhao Weiguo, who said China wants to become the third biggest semiconductor manufacturer in the world.

“We don’t have plans for DRAM at the moment”, Zhao said, referring to dynamic random access memory (DRAM) chips that are used mostly in personal computers. The company has also purchased a 15% stake in Western Digital, a US-based data storage firm.

State-owned Tsinghua Unigroup continues investing in overseas companies in a bid to strengthen its presence in the semiconductor industry.