China's Unigroup to Pay $600 Million for Taiwan Chipmaker Stake

  • Tsinghua Unigroup agrees to take 25% stake in Powertech
  • Unigroup says Powertech will expand market share in China

Tsinghua Unigroup Ltd., the investment arm of China’s Tsinghua University, has agreed to pay about $600 million to become the largest shareholder in Taiwanese chip testing and assembly provider Powertech Technology Inc.

Unigroup, which is unlisted, will purchase a stake of about 25 percent in Powertech for NT$75 ($2.30) per share, according to a statement posted on the mainland Chinese company’s website on Friday. Powertech could expand its market share in China and reinforce its leading role in the global market after the deal, the statement said.

The stake purchase is another step forward in the Beijing-based company’s expansion into the $80 billion global memory market. Unigroup is said to have considered bidding for Micron Technology Inc. and also said to be close to a deal for Tongfang Guoxin Electronics Co. This month, an affiliate agreed to buy a stake in Western Digital Corp, while Unigroup hired Taiwanese industry veteran Charles Kau, chairman of a venture between Nanya Technology Corp. and Micron Technology, as one of three global executive vice presidents.

Taiwan hasn’t an received application for the Powertech deal, Taiwan’s Ministry of Economic Affairs said in a separate statement on its website, adding that it would consider the impact of Unigroup’s global purchases on Taiwan while examining the deal.

Taiwan’s Advanced Semiconductor Engineering Inc., the world’s biggest chip assembler and tester, said in August it planned to buy a stake of as much as 25 percent in Siliconware Precision Industries Co. for about NT$35.1 billion. Profits of Taiwan technology companies are coming under pressure amid increased global competition and weaker economic growth.

Powertech’s shares gained 3.5 percent to close at NT$72 on Friday in Taipei, adding to a 33 percent gain this year.

— With assistance by Miaojung Lin, and Alfred Cang

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