China’s Tsinghua Unigroup buying 25% in Taiwan chip firm Powertech in $600m deal

Chinese state-backed technology conglomerate Tsinghua Unigroup Ltd is buying a 25 percent stake in Powertech Technology Inc for $600 million, becoming the largest shareholder in the Taiwanese chip packaging and testing company.

The alliance, announced on Friday by both companies, is likely to help bolster the development of China’s fledgling chip industry and comes after the Chinese tech group recently hired a veteran Taiwanese semiconductor executive.

“We believe Powertech, with its ability in the assembly and testing industry, will be an important member in the semiconductor industry supply chain of Taiwan and China. We expect to achieve a win-win together following our cooperation,” said Tsinghua Unigroup chairman Zhao Weiguo, in a company statement.

Powertech said that the move will help expand its global market share, including in China, as a chip assembly and tester, and allow it to vertically integrate with the semiconductor businesses of Tsinghua Unigroup.

Tsinghua Unigroup will pay T$75 ($2.31) a share in a private placement of new Powertech shares to gain a 25 percent ownership of the company. The deal still needs to be approved by Powertech shareholders and relevant regulatory authorities.

Powertech’s main operations are in Taiwan and it employs more than 11,000 on the island, which is around 90 percent of the company’s total staffing, Powertech said.

It said it plans to use the funds from the private placement to expand its capacity of advanced assembly and testing services in Taiwan and develop advanced processes for production, as well as recruit staff.

Earlier this month, Tsinghua Unigroup hired Charles Kau, the chief of Micron Technology Inc’s Taiwanese joint venture, as its global executive vice president, a person familiar with the matter told Reuters.

Kau’s hiring came about three months after Tsinghua made an informal $23 billion takeover offer for Micron that was rejected out-of-hand by the Idaho-based company’s leadership, although the Chinese side has not given up on a deal, sources have said.

($1 = 32.4620 Taiwan dollars) (Reporting by J.R. Wu and Yimou Lee; Editing by Muralikumar Anantharaman)

Reuters

 

Pic: FreeDigitalPhotos

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
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