Ts­inghua read­ies chip move

China Daily (Canada) - - FRONT PAGE - By CHINA DAILY

Ts­inghua Hold­ings Co Ltd, a tech­nol­ogy con­glom­er­ate backed by Ts­inghua Univer­sity, plans to in­vest at least 30 bil­lion yuan ($4.76 bil­lion) in de­vel­op­ing mo­bile chip tech­nol­ogy, high­light­ing the com­pany’s am­bi­tion to chal­lenge Qual­comm Inc’s dom­i­nance in the coun­try’s chip mar­ket.

“To catch up with Qual­comm as soon as pos­si­ble, we will pour 30 bil­lion yuan, and prob­a­bly even more, into the re­search and de­vel­op­ment of mo­bile chips in the next few years,” Xu Jinghong, chair­man of Ts­inghua Hold­ings, told China Daily in an in­ter­view on Tues­day.

Ts­inghua Hold­ing said a cer­tain pro­por­tion of the money will come from gov­ern­ment fund­ing and its part­ners. In Fe­bru­ary, its unit Ts­inghua Un­i­group Ltd said it has re­ceived 10 bil­lion yuan from gov­ern­ments to in­vest in chip com­pa­nies.

“Frankly, com­pared with global com­peti­tors, we are still three-to-five years be­hind in tech­nol­ogy, es­pe­cially in cut­ting-edge 4G and 5G prod­ucts,” Xu said, “but if we don’t close the tech­no­log­i­cal gap, we will never win.”

The com­ment came af­ter Ts­inghua Un­i­group Ltd filed a plan to buy US chip­maker Mi­cron Tech­nol­ogy Inc for $23 bil­lion. Xu said ear­lier it was still in dis­cus­sions for a po­ten­tial deal.

“We will con­tinue to ex­pand our pres­ence in the in­te­grated cir­cuit in­dus­try through both ac­qui­si­tion and self-re­search,” he said, adding chips will be one of the fo­cuses of the Bei­jing-based com­pany.

Roger Sheng, se­nior an­a­lyst at re­search firm Gart­ner Inc, said the gov­ern­ment’s em­pha­sis on the semi­con­duc­tor sec­tor is the big­gest ad­van­tage for Ts­inghua Un­i­group.

“Few tech com­pa­nies in China have such a large amount of cap­i­tal at their dis­posal as Ts­inghua Hold­ings does,” Sheng, said adding “de­spite its cur­rent tech­no­log­i­cal weak­ness, it has am­bi­tions and is act­ing very quickly”.

Ts­inghua Hold­ings’ in­ten­si­fied ef­forts to boost its chiprelated re­sources come as the Chi­nese gov­ern­ment seeks to re­duce the coun­try’s re­liance on for­eign tech­nol­ogy, on wor­ries that it may hurt na­tional se­cu­rity.

The com­pany evolved into the largest chip firm in China af­ter it ac­quired Spread­trum Com­mu­ni­ca­tions Inc, the world’s third-largest mo­bile phone chip maker, and RDA Mi­cro­elec­tron­ics Inc, the fourth-largest, in 2013.

“If we can man­age to catch up with Qual­comm tech­no­log­i­cally, our in­no­va­tion ca­pa­bil­ity, the huge smart­phone mar­ket in China as well as the la­bor cost, which starts ris­ing but is still lower than that of the US, can of­fer us con­sid­er­able com­mer­cial op­por­tu­ni­ties,” Xu said. Ma Si con­trib­uted to this story.

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