BEIJING/HONG KONG: China’s Tsinghua Unigroup Ltd. plans to invest 300 billion yuan ($47 billion) over the next five years in a bid to become the world’s third-biggest chipmaker, the chairman of the state-backed technology conglomerate said.
Chairman Zhao Weiguo also said in an interview in Beijing that the company controlled by Tsinghua University, which counts President Xi Jinping among its alumni, was in talks with a US-based company involved in the chip industry.
A deal could be finalized as early as the end of this month, he said. He declined to give more details but said buying a majority stake was unlikely as it was too “sensitive” for the US government.
“If you can’t be the top-three giant, it will be very hard to develop your business in the chip industry,” Zhao said, citing reports that China imported more chips than crude oil every year.
“The next five years is key... There is an enormous market out there.”
Currently, Qualcomm Inc. holds the No.3 position in the global chip rankings, behind Samsung Electronics Co. Ltd. and market leader Intel Corp, which has a market capitalization of $151.5 billion.
The sheer size of Tsinghua Unigroup’s planned investments is almost equal to Intel’s $50 billion chip revenue last year and could disrupt the NAND chip industry. The top five chipmakers control more than 90 percent of the global NAND chip market after years of boom-and-bust squeezed out smaller players.
Tsinghua Unigroup’s investment drive comes after a two-year deal-making campaign to bolster China’s fledgling chip industry, seen as a strategic priority for the Chinese government.
Beijing is keen to end China’s reliance on foreign semiconductors as it seeks to build a modern, digitised armed forces capable of matching other advanced militaries.
It has also attached strategic importance to the development of domestic semiconductor, server and networking equipment industries amid fears of foreign cyberspying.
Tsinghua Unigroup has spent more than $9.4 billion making acquisitions and investments at home and abroad over the past two years, including the purchase of stakes in US data storage company Western Digital Corp. and Taiwan’s Powertech Technology Inc.
In August, it made an informal $23 billion takeover offer for US giant Micron Technology Inc. that was rejected out-of-hand by the Idaho-based chipmaker amid concerns a deal might endanger national security.
Tsinghua’s failed bid to buy Micron suggests it is serious about expanding in NAND chips, used for storing music, pictures and other data on mobile devices.
The global chip market was worth $355 billion last year, according to research firm IHS Technology.
Tsinghua Unigroup, which had revenue last year of about 12.3 billion yuan, was also in talks about cooperating with a “world-class memory chip giant” to build a new chip factory in China, Zhao said, a move that could help his company acquire intellectual property needed to manufacture memory chips.
The 90-billion-yuan factory would help meet fast-growing demand of NAND memory chips.
“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.
“We need to take one step at a time.”
The company was also suspending plans to invest in Taiwanese tech firms due to regulatory hurdles, after agreeing to take a stake in Powertech Technology Inc. and expressing interest in more cross-strait deals.
Industry analysts had expected Tsinghua Unigroup to make further investment in Taiwan, sparking fears on the island that its chip sector may fall prey to China’s state-backed drive to become a world-class player.
“The regulations do not allow it, so what’s the point of talking (to Taiwanese firms)?” Zhao said, adding that Tsinghua Unigroup was focused on investing in the US.
Tsinghua Unigroup to invest $47bn to build chip empire
Tsinghua Unigroup to invest $47bn to build chip empire
Emerging markets should depend less on external funding, says Nigeria finance minister
RIYADH: Developing economies must rely less on external financing as high global interest rates and geopolitical tensions continue to strain public finances, Nigeria’s finance minister told Al-Eqtisadiah.
Asked how Nigeria is responding to rising global interest rates and conflicts between major powers such as the US and China, Wale Edun said that current conditions require developing countries to rethink traditional financing models.
“I think what it means for countries like Nigeria, other African countries, and even other developing countries is that we have to rely less on others and more on our own resources, on our own devices,” he said on the sidelines of the AlUla Conference for Emerging Market Economies.
He added: “We have to trade more with each other, we have to cooperate and invest in each other.”
Edun emphasized the importance of mobilizing domestic resources, particularly savings, to support investment and long-term economic development.
According to Edun, rising debt servicing costs are placing an increasing burden on developing economies, limiting their ability to fund growth and social programs.
“In an environment where developing countries as a whole — what we are paying in debt service, what we are paying in terms of interest costs and repayments of our debt — is more than we are receiving in what we call overseas development assistance, and it is more than even investments by wealthy countries in our economies,” he said.
Edun added that countries in the Global South are increasingly recognizing the need for deeper regional integration.
His comments reflect growing concern among developing nations that elevated borrowing costs and global instability are reshaping development finance, accelerating a shift toward domestic resource mobilization and stronger economic ties among emerging markets.
