China-Based Tsinghua Unigroup to Buy Stakes in Chip-Packaging Companies in Taiwan

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By Jacob Maslow

Tsinghua Unigroup Ltd., the China state-owned company, announced that it plans to buy stakes in two chip-packaging companies in Taiwan. The purchase, worth over $2 billion, is the company’s latest effort to build a chip-making company that can compete on a global level.

ChipMOS Technologies Inc. and Silicon Precision Industries Co. are the two companies Tsinghua is planning to invest in. Earlier in the year, the group announced other investments that totaled over $20 billion, making Tsinghua one of the most acquisitive companies in the chip industry.

Tsinghua’s latest acquisition proposals still require regulatory and shareholder approval.

The company’s move comes at a time when China is looking to grow its chip industry to minimize dependence on foreign companies. The semiconductor industry as a whole is seeing a record year of mergers and acquisitions, with chip deals exceeding $120 billion this year alone.

Tsinghua plans to spend 11.1 billion yuan on a 24.9% stake in silicon precision industries, which equates to 55 Taiwan dollars per share (a 20.9% premium over its closing price on Friday).

The company also proposes purchasing a 25% stake in ChipMOS Technologies Inc. for a total of 2.4 billion yuan.

As recently as May, Tsinghua purchased a 51% interest in the China unit of Hewlett Packard (HPQ) for $2.3 billion.

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