Ts­inghua Un­i­group eyes place at top ta­ble

Par­ent com­pany plans 100b yuan fund to boost pres­ence in in­te­grated cir­cuit in­dus­try

China Daily (Canada) - - LIFE - By MASI masi@chi­nadaily.com.cn

Ts­inghuaHold­ings Ltd, the par­ent com­pany of China’s largest chip­maker Ts­inghua Un­i­group Co Ltd, said on Wed­nes­day it is plan­ning to launch a more than 100 bil­lion yuan fund ($15.45 bil­lion) with its part­ners to ex­pand its pres­ence in the in­te­grated cir­cuit in­dus­try.

The move is the com­pany’s lat­est at­tempt to build Ts­inghua Un­i­group into one of the top three chip­mak­ers in the world, join­ing the league of gi­ants such as In­tel Corp, Qual­comm Inc and Sam­sung Elec­tron­ics Co.

Xu Jinghong, chair­man of Ts­inghua Hold­ings, said in an ex­clu­sive in­ter­view with China Daily: “We are plan­ning to es­tab­lish an in­dus­try fund next year. By team­ing up with our part­ners, the fund will ex­ceed 100 bil­lion yuan, maybe like 200 bil­lion yuan.”

Xu de­clined to of­fer de­tails of the com­pany’s part­ners, but said the new fund will be used to in­vest into new chip projects and make more ac­qui­si­tions to ex­pand its pres­ence in the in­te­grated cir­cuit in­dus­try.

“We will con­tinue in­vest­ing into com­pe­tent chip com­pa­nies. But we will not be the largest stock­holder or the hold­ing com­pany of ev­ery ac­qui­si­tions we make,” he said at the side­lines of the Sec­ond World In­ter­net Con­fer­ence, which opened on Wed­nes­day in­Wuzhen, Zhe­jiang prov­ince.

Ts­inghua Un­i­group’s in­ten­si­fied ef­forts to boost its chiprelated re­sources come as the gov­ern­ment seeks to re­duce the coun­try’s reliance on for­eign tech­nol­ogy, amid wor­ries that it may pose a risk to na­tional se­cu­rity.

“Cur­rently, money is not a prob­lem for us. We can de­ploy more cap­i­tal than what the pub­lic sees to­day. The real chal­lenge lies in how to bring out the largest po­ten­tial of com­pa­nies we have ac­quired,” Xu said.

Ts­inghua Un­i­group has in­vested in a num­ber of Tai­wan-based chip com­pa­nies and US en­ter­prises in the hope of ac­quir­ing more tal­ents and chip tech­nolo­gies. The lat­est in­vest­ment came ear­lier this month when it an­nounced a plan to spend 13.5 bil­lion yuan ($2.1 bil­lion) on buy­ing stakes in two Tai­wan chip pack­ag­ing and test­ing en­ter­prises.

Roger Sheng, a se­nior an­a­lyst at re­search firm Gart­ner Inc, said the lat­est ini­tia­tive will ac­cel­er­ate Ts­inghua Unigoup’s steps to be­come a lead­ing global chip­maker.

“Due to the cen­tral gov­ern­ment’s strong sup­port, both pub­lic and pri­vate cap­i­tal is flood­ing into the in­te­grated cir­cuit sec­tor. So it is not dif­fi­cult for Ts­inghua Hold­ings to launch such a big fund with its part­ners. The new ini­tia­tive will al­low it to chan­nel more re­sources into re­search and de­vel­op­ment.”

But he also warned that the State-owned en­ter­prise has in­vested in too many com­pa­nies in the past two years, which will make it dif­fi­cult to in­te­grate the re­sources it has ac­quired.

“No one can build a chip gi­ant with just money. Tal­ent and tech­nol­ogy are the keys. But in sev­eral cases, Ts­inghua Un­i­group has only bought a mi­nor­ity stake, which is not enough to give it ac­cess to a for­eign chip com­pany’s core tech­nol­ogy.”

“In­stead of ex­pand­ing its pres­ence, I be­lieve it will be a bet­ter idea for Ts­inghua Un­group to con­cen­trate its re­sources in sev­eral units which boasts the great­est po­ten­tial.”

By team­ing up with our part­ners, the fund will ex­ceed 100b yuan, maybe like 200b yuan.”


Teach­ing ro­bots for home use, made by Ts­inghua Un­i­group Co Ltd, on dis­play at an expo in Beijing.

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