China: Chip maker Tsinghua Unigroup faces bankruptcy. Could AliBaba be its white knight?

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https://asia.nikkei.com/Business/Tech/Semiconductors/Alibaba-emerges-on-shortlist-to-rescue-chipmaker-Tsinghua

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Chinese Giant Goes Bankrupt – is Chip Market in For a Shock?

The chip market may face another shock. All because of the bankruptcy of Tsinghua Unigroup, an important Chinese producer of the aforementioned components.

hardware & software 19 July 2021, 16:09

author: Przemyslaw Dygas

Tsinghua Unigroup is a company supported to a large extent by the Chinese government. There were hopes with the manufacturer would enable China to become independent from foreign supplies of semiconductors. Its bankrupcy is therefore likely to be a severe blowy. The situation may also affect the entire global chip market, which has been struggling for a long time.

Together with the bankruptcy of Tsinghua Unigroup, its subsidiary Unisoc is also in trouble. This is a company that until May was considered to be the fifth largest manufacturer of chips used in the production of smartphones. Therefore, difficulties may also occur on the mobile device market.

The company’s insolvency is related to bad investments and the way it is financed. Tsinghua Unigroup relied heavily on government subsidies that guaranteed conditions for development. At the same time, in addition to investing in the production of semiconductors, the company allocated large funds to unprofitable business sectors including real estate, online gambling and foreign smartphone manufacturers.

One of the sources of Nikkei Asia revealed, however, that the problems are unlikely to threaten the company. The Chinese government still wants independence from foreign chip suppliers. Tsinghua Unigroup was the most heavily subsidized local semiconductor manufacturer. Politicians responsible for these plans do not want these investments to be wasted.

https://www.gamepressure.com/newsroom/tsinghua-unigroup-goes-bankrupt-a-shock-for-the-chip-market/za360a

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Tsinghua Unigroup Co. Ltd. is on a fast track for asset restructuring under pressure from creditors as the once high-flying maker of computer chips is mired in a nearly two-year debt crisis. At stake are nearly $46 billion of assets and one of China’s most ambitious semiconductor investment projects.

Unigroup, majority owned by Tsinghua University in Beijing, was once at the forefront of China’s drive to develop a domestic semiconductor industry. The company embarked on a series of acquisitions and investments in the capital-intensive integrated circuit sector between 2013 and 2019, forging partnerships with Intel Corp. and HP Inc. and emerging as a major player. But it failed to generate income quickly in an industry famous for huge costs of entry and long payback periods. Since late 2020, the company has defaulted on a raft of bonds amid an escalating capital crunch.

https://www.caixinglobal.com/2021-09-06/cover-story-rescuing-chinas-would-be-chipmaking-champion-101769204.html

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