Tag Archives: Unigroup

CHIPS: Seagate Tries Less Production, More Tech Sharing in China Retrench

Bottom line: Seagate’s closure of its Suzhou factory, combined with its earlier formation of a Chinese technology-sharing joint venture, reflect the changing approach away from local manufacturing that western tech firms are taking towards China.

Seagate closes Suzhou factory

New reports are saying that hard disk drive maker Seagate (NYSE: STX) is closing down a factory in the eastern city of Suzhou, as part of a restructuring plan to revive its operations. Such a development isn’t huge news, since the global semiconductor sector is undergoing a major consolidation.

But this particular closure also comes just months after Seagate announced a new tie-up with Chinese partner Sugon to tap the local market for IT products and services. So the bigger question becomes: What’s the meaning of this factory closure and the newer joint venture, and what’s the outlook for semiconductor and high-tech equipment manufacturing in China? Read Full Post…

M&A: China-US Deals Stall as Trump Presidency Nears

Bottom line: A Chinese bid for the Chicago Stock Exchange could get vetoed on concerns about exposure to the US financial system, while a similar bid for chip maker Lattice could get approved due to its relatively small size.

Lattice buyer has Beijing backing

Two cross-border deals involving China M&A in the US appear to be stalling, even before the protectionist-minded Donald Trump becomes the next US president. That certainly doesn’t bode well for either deal, one in the high-tech chip space and the other in the financial sector, since both could easily have Chinese government backing. One of those has a Sichuan-based investor group trying to buy the tiny Chicago Stock Exchange, while the other has a different group trying to buy mid-sized chip design house Lattice Semiconductor (Nasdaq: LSCC). Read Full Post…

CHIPS: SMIC Taps Beijing’s Chip Ambitions with New $10 Bln Plant

Bottom line: SMIC’s new plan for a $10 billion cutting-edge chip plant shows it could be well positioned to find a place on the global stage by tapping strong government support after an overhaul of its own operations.

SMIC announces $10 bln chip plant

I rarely write these days about SMIC (HKEx: 981; NYSE: SMI), since the company once billed as China’s best hope to challenge global chip giants like Intel (Nasdaq: INTC) and TSMC (Taipei: 2330) has been a major disappointment since its Hong Kong listing a decade ago. But the company’s newly announced plan for a $10 billion cutting-edge plant was enough to catch my attention, and shows SMIC could become a company to watch due to Beijing’s sudden determination to build  up a globally competitive chip sector at any cost. Read Full Post…

CHIPS: China Tries New US Chip Buy with Analogix

Bottom line: A Chinese buyer’s plan to purchase US chip maker Analogix for more than $500 million is unlikely to meet with political resistance, and could mark a new template for similar cross-border chip M&A by China.

Chinese group bids for US-based Analogix

After failing at several high-profile attempts to buy US microchip technology, China is trying once again with a newly announced plan to acquire venture-backed chipmaker Analogix Semiconductor for more than $500 million. Unlike previous failed efforts that targeted more mature companies, the acquisition target in this case is much younger, since Analogix was only founded in 2002.

This new deal looks strikingly similar to another one earlier this year that saw the Shanghai-based National Silicon Industry Group purchase a similarly young Finnish chipmaker called Okmetic in a deal that valued the company at nearly $200 million. (previous post) That deal and this latest one don’t appear to be related, though one can never be completely sure due to the vague descriptions of the buyers in both cases. Read Full Post…

BUYOUTS: 21Vianet Divorces Xiaomi, Boosts Tsinghua Ties

Bottom line: 21Vianet could get a new privatization offer from Tsinghua Unigroup by year end, following withdrawal of a previous bid; while Xiaomi chief Lei Jun may start selling non-core assets to raise money for his struggling company.

Buyout group scraps 21Vianet bid

Data center operator 21Vianet (Nasdaq: VNET) has finally done the inevitable and formally scrapped its de-listing plan, becoming the second company to do so among some 40 US-listed Chinese firms trying to privatize from New York. This particular move has been coming for a while now, and signs appeared as early as May that 21Vianet was abandoning its privatization plans. But new Chinese media reports are casting some light on why this particular bid collapsed, and it appears the reasons are linked to struggling smartphone maker Xiaomi, whose chief and co-founder Lei Jun was helping to finance the deal. Read Full Post…

CHIPS: TSMC Offers New Tech Route to Taiwan for China

Bottom line: New remarks by TSMC Chairman Morris Chang could signal a revival of several stalled mainland investments in Taiwan’s microchip sector, with new focus on creating mechanisms to prevent IP theft.

TSMC remarks hint at revival of China-Taiwan chip deals

New reports are citing one of Taiwan’s most influential technology executives saying he welcomes investment from China, offering a tantalizing new path to the island for Chinese high-tech firms who so far have been rebuffed in such moves. The new signals are coming from the chairman of leading Taiwanese high-tech chip maker TSMC (Taipei: 2330), who is saying he could accept a Chinese investor as a strategic stakeholder as long as the company doesn’t require a place on his company’s board. Read Full Post…

MULTINATIONALS: Seagate Joins China Tech Train with Sugon Tie-Up

Bottom line: Seagate’s new partnership with Sugon is the latest tie-up designed to give a major western hardware maker continued access to China’s IT services market, even as such partnerships sharply raise the risk of IP theft.

Seagate in new China tie-up

The steady stream of US tech firms bowing to Beijing’s tough new rules for doing business in China has just gained a new member, with word that data storage specialist Seagate (Nasdaq: STX) has just formed a new local joint venture. This particular tie-up comes just a half year after Seagate’s new partner, a company called Sugon (Shanghai: 603019), formed another similar cloud computing partnership with VMWare (Nasdaq: VMW), a unit of data storage giant EMC (NYSE: EMC).

The new Seagate alliance and slightly older VMWare venture come as most major US high-tech hardware makers, including the likes of IBM (NYSE: IBM), Hewlett Packard Enterprise (NYSE: HPE) and Cisco (Nasdaq: CSCO), have all formed similar tie-ups in a new love affair with Beijing. Of course I’m being slightly facetious in calling it a love affair, since these companies really didn’t have any choice in the matter. Read Full Post…

China News Digest: April 19, 2016

The following press releases and news reports about China companies were carried on April 19. To view a full article or story, click on the link next to the headline.
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  • Alipay Owner Ant Financial to Start Shanghai IPO Process as Soon as 2016 (English article)
  • Tencent (HKEx: 700) CEO Ma to Donate 100 Mln Company Shares Towards Charity (company announcement)
  • Chinese Group Wants to Seal AC Milan Takeover by June (English article)
  • Siliconware Precision (Taipei: 2325) Says $1.7 Billion Tsinghua Deal Is on Hold (English article)
  • Alibaba (NYSE: BABA) Boards Paramount’s ‘Ninja Turtles,’ ‘Star Trek’ (English article)
  • Latest calendar for Q1 earnings reports (Earnings calendar)

CHIPS: Unigroup Eyes Lattice, in Smaller Approach to Global M&A

Bottom line: Unigroup’s cautious approach to the potential acquisition of a small US chip maker reflects political realities that make larger purchases difficult, dealing a setback to China’s dreams of quickly building a chip-making giant.

Unigroup buys into Lattice Semiconductor

After being rebuffed several times in the US and Taiwan, China’s ambitious Tsinghua Unigroup is back in the chip acquisition headlines with word that it’s exploring a possible purchase of smaller US chip designer Lattice Semiconductor (Nasdaq: LSCC). Unlike the earlier failed deals that were either outright acquisitions or purchases of major stakes worth billions of dollars, this latest deal is quite small both in dollar terms and stake size.

That would seem to indicate that Unigroup and its affiliated sister companies, all housed at the prestigious Tsinghua University, are shifting to a more cautious approach targeting smaller companies in their global M&A strategy. We saw a similar move earlier this month, when a Shanghai-based government-backed buyer bid for Okmetic (Helsinki: OKM1V), a Finnish chip design house with a market value of about $200 million. (previous post) Read Full Post…

CHIPS: Beijing Eyes Finnish Chip Maker, New Approach Needed

Bottom line: China’s latest plan to buy Finnish chip maker Okmetic could get vetoed on national security concerns, reflecting foreign government concerns about selling technology companies to government-backed entities.

Finland’s Okmetic gets buyout bid from China

China’s ambitions of building a world-class high-tech microchip industry were in the headlines again last week, when the small Finnish chip maker Okmetic (Helsinki: OKM1V) revealed it had received a takeover bid from a government-backed company based in Shanghai. Beijing’s ambitions are understandable, since China currently buys over 60 percent of the world’s microchips to feed its vast manufacturing complex that makes everything from smartphones to computers and home appliances.

But recent resistance in the US and Taiwan has also highlighted reluctance by overseas governments to seeing their companies purchased by the big state-run vehicles that Beijing has recently set up to achieve its aims. Historically speaking, China has also achieved mixed results when the government backs big microchip projects, which often fall victim to government agendas that limit their ability to quickly respond to the fast-changing market. Read Full Post…

CHIPS: Western Digital, Taiwan Threaten Tsinghua Chip Dreams

Bottom line: Chinese buyers may be forced to abandon their pursuit of chip makers in the west and Asia, following the latest collapse of a deal for a stake in Western Digital over concerns of a national security veto by Washington.

Unigroup scraps Western Digital investment

Globally acquisitive chip makers Tsinghua Unigroup and sister company Unisplendour are quickly becoming the belles at the ball who can’t find a mate despite their huge dowries. That’s the bottom line in this tale of China’s dream of building a global semiconductor chip giant, which has just received a major setback with word that Unisplendour has formally dropped its bid to buy 15 percent of US hard drive maker Western Digital (Nasdaq: WDC).

If Unisplendour and Unigroup are the wealthy belles at the ball in this story, then the character intent on spoiling any potential unions is Washington, which worries such marriages could threaten national security by giving Beijing sophisticated technology. Taipei is also looming as another potential spoiler, as other headlines say the government there will give unprecedented scrutiny to a series of similar proposed stake purchases of local chip makers by Unisplendour and Unigroup. Read Full Post…