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Asean & Global Updates
POSTED | 22:20 PM | 27-03-2016

Korean chipmakers face Chinese threat

China’s aggressive move to increase its foothold in the world’s chip sector is becoming a threat to Korean manufacturers, including Samsung Electronics and SK hynix.

Tsinghua Unigroup told Bloomberg in a recent interview that the company would invest a whopping $30 billion in order to grow its semiconductor business in the coming years.

The figure far exceeds Samsung’s projected investment spending amounting to $11.5 billion for this year. 

Market watchers expected that the Chinese firm’s new investment, if made, will further fuel competition in the chip industry, which has suffered from the game of chicken in which firms try to absorb losses long enough for their rivals to buckle, The Korea Herald reported on Sunday (27 March 2016).

Over the past years, the Chinese government-affiliated private equity firm funded by Tsinghua University purchased Chinese mobile chipmakers Spreadtrum and TRA Microelectronics.

The company’s efforts to get into the top echelon of the world’s chip sector include stake purchases in Chinese mobile chipmaker Spreadtrum and TRA Microelectronics, Taiwanese chip companies SPIL and ChipMOS and Taiwanese chip-packaging company PowerTech.

It also has begun eyeing takeovers of global chipmaking powerhouses, including Micron Technology and Western Digital. 

The acquisition plan for Micron Technology fell through reportedly due to the intervention of the US authorities, and the Chinese firm has also scrapped the takeover plan of Western Digital, concerned that the US government will block the acquisition deal.       

                                                                                                                        

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