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China’s Tsinghua Plans To Invest $47 Billion To Become Global Leader In Chip Manufacturing

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In a bid to become the world’s third-biggest chipmaker and further cement China’s already stronghold on the electronics market, China’s Tsinghua Unigroup Ltd has drawn plans to invest $47 billion in a time span of five years and meet the never halting chip demands on the country, reports Reuters.

China imports chips from other countries more than any other resource. It largely relies on Qualcomm to supply chips to be integrated to its in-house developed devices.

China’s Tsinghua wants to eradicate this dependency upon foreign organizations and take over the responsibility of supplying chips to Chinese organisations. The intentions are not just limited to Chinese perimeter, they extend to foreign boundaries as well.

Tsinghua Chairman Zhao Weiguo

If you can’t be the top-three giant, it will be very hard to develop your business in the chip industry.

Intel, Samsung and Qualcomm hold the first three positions in semiconductor companies worldwide. Tsinghua intends to make itself an elite position and is pouring an hefty amount of money to do so.

Tsinghua already intends to buy Mediatek and US memory manufacturer Micron. However, Taiwanese and US governments have announced such acquisitions as invalid in a bid to protect local manufacturers.

The top five chipmakers control more than 90 per cent of the global NAND chip market. Small players couldn’t survive the cut throat battle and ended up with a very low proportion of the market.

Tsinghua Unigroup has spent more than $9.4 billion making acquisitions and investments at home and abroad over the past two years, including the purchase of stakes in U.S. data storage company Western Digital and Taiwan’s Powertech Technology.

Tsinghua even tried to strike a deal to buy Micron for $23 billion, but it ended up in a failure. Chairman Zhao Weiguo  said that the company was engaged with a US based chip manufacture for quiet long and hinted that a deal might be finalized by the end of this month.

China has always been furious to promote in-house development and has extended support to organizations in infinite ways. China has managed to set up a bunch manufacturing plants and slumped its dependency upon foreign companies. With Tsinghua taking the responsiblity to develop chips, China’s vision would become stronger and prove to be a major accomplishment for the country.

Senior Writer