China merged its two big semiconductor companies into one under the catchphrase “Rise of Chinese semiconductor.” It draws much attention whether or not a Chinese semiconductor giant will be born.
On July 26, the Wall Street Journal reported that Tsinghua Unigroup took of the half of equities in XMC, a government-run semiconductor company. Tsinghua Unigroup founded Changjiang Storage Co. by combining its semiconductor production business and XMC.
Tsinghua Unigroup holds a 50-plus percent stake in Changjiang Storage Co. while the remaining stake belongs to the National IC Investment Fund of China and the Wuhan City Government. Recently XMC announced its plan to invest a total of US$24 billion for the localization of semiconductors. The company will produce NAND flashes first and then, DRAM production facilities and finally, other parts in three steps. In addition, Tsinghua Unigroup decided to build a memory semiconductor plant with an investment of US$1.2 billion.
This merger is expected to expedite the localization of semiconductors in China. Tsinghua Unigroup has broadly expressed its will to take over a semiconductor company. Although the Chinese company suggested US$23 billion in an effort to take over Micron Technology, a DRAM market leader, last year, US regulators applied the brake to the plan. Early this year, the company attempted to indirectly take over SanDisk, a NAND flash company in the form of investment in Western Digital. But US regulators thwarted its attempt once again.
Such repeated takeover failures compelled the company to take over six-percent equities in Lattice Semiconductor and make some investment in Marvell Technology.
With regard to this, the Korean semiconductor industry is in a mood to stay alert to the Chinese financial power even though it says that Chinese semiconductor companies have grown quantitatively only. “There has been no managerial performance or technology development by Chinese semiconductor manufacturers,” said a representative of the semiconductor industry. “But we will keep our eyes out for them in the future.”