China's Tsinghua to Spend $2.1 Billion on Taiwan Chip Testers

  • Tsinghua Unigroup buying 25 percent stakes in SPIL, ChipMOS
  • SPIL using funds from Unigroup to expand Taiwan facilities

Tsinghua Unigroup Ltd. will spend $2.1 billion on stakes in two Taiwanese chip testers, marking further steps in China’s efforts to build its own semiconductor industry.

Tsinghua will invest NT$56.8 billion ($1.7 billion) in Siliconware Precision Industry Co. and NT$11.97 billion in ChipMOS Technologies Inc., according to separate announcements. Tsinghua will own 25 percent of each company after the deals close.

China is trying to reduce a reliance on foreign suppliers as part of President Xi Jinping’s efforts to elevate the nation’s technology industry. Affiliates of state-backed Tsinghua University are becoming a vehicle for China to wean itself with an acquisition spree that includes a stake in Western Digital Corp.

“The investment will help SPIL expand in China’s growing semiconductor market,” SPIL Chairman Bough Lin said at a briefing.

Tsinghua Unigroup will buy 1.033 billion new shares of SPIL at NT$55 apiece, Siliconware said in a statement. That represents a 33 percent dilution in existing shares, with the deal expected to close by June, Lin said.

Foxconn Bid

SPIL this year has already failed in its attempt to fend off Advanced Semiconductor Engineering Inc.’s unsolicited bid for a 25 percent stake, while a subsequent offer from Foxconn Technology Group was defeated at a shareholder vote in October.

SPIL will use the funds from Unigroup to invest and expand its Taiwan facilities.

Unigroup, an affiliate of China’s prestigious Tsinghua University, said its deal will comply with relevant Taiwan regulations regarding investment from China in the semiconductor sector, which require an industry cooperation plan and a declaration not to obtain control over SPIL.

Separately, Tsinghua said it will buy 299.3 million shares of Hsinchu-based ChipMOS Technologies at NT$40 each.

ASE, a supplier of components used in Apple Inc.’s smartphones and watches, this year won a tender for SPIL shares that gave it a 25 percent stake.

Siliconware then sought to outflank ASE by turning to Foxconn’s Terry Gou, betting that teaming with the assembler of iPads and iPhones would help it win orders. SPIL shareholders rejected the plan to sell stock to Gou at a discount.

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