With a slight delay, Beijing Jianguang Asset Management or JAC Capital, a Beijing-led consortium, rescued Tsinghua Unigroup in early April. The investment fund specializing in semiconductors has injected 8.62 billion euros into the company to partially cover an abysmal debt.
Beijing to the rescue of one of its flagships
On March 31, the future of Tsinghua Unigroup was hanging by a thread. In debt of more than 27 billion euros, the company declared itself insolvent in July 2021 and was placed in receivership. She had until the end of March to repay her creditors, a deadline finally shifted to April 1, when the funds from JAC Capital finally arrived.
Data Cloud Summit 22′: what’s new presented by Google Cloud?
For Beijing, it was unthinkable to let Tsinghua Unigroup sink. The conglomerate was born in 1988 from a public-private partnership with the prestigious eponymous university, based in the Chinese capital.
It has established itself as a global giant in electronic memory and semiconductors. The Register notes that in 2015 Tsinghua was still trying to buy the American Micron Technology for 23 billion dollars, without success.
The conglomerate ended up crumbling in debt. In January 2022 a Chinese court authorized the implementation of a rescue operation accompanied by a reorganization plan.
With autonomy in the semiconductor industry becoming a strategic priority for China, Tsinghua was able to avert disaster. In the country where investments in chipmakers are multiplying at all costs, the juggernaut Alibaba has offered a first offer to bail out the company.
The Chinese giant was refused, deemed incompetent in the matter. It may have suffered from the poor image it enjoys in Beijing or from its dominant position in the e-commerce and cloud computing sector. It was ultimately the JAC Capital fund, owned by Beijing, which led the bailout of the national flagship.
The survival of Tsinghua Unigroup unanimously applauded?
The Chinese government is not the only one who can breathe a sigh of relief. Several U.S. companies have strong ties to Tsinghua entities, as found The Register.
Hewlett Packard Enterprise owns 49% of New H3C Technologies, a joint venture that provides servers and associated technical service to the Chinese branch of HPE. It is also on the American blacklist for participating in the modernization of the People’s Liberation Army. Intel, meanwhile, owns 20% of UNISOC Communications, another Tsinghua company. It manufactures chips for smartphones.
Tsinghua’s rescue is also good news for Apple. According to Bloombergthe apple brand wants to diversify its NAND flash memory suppliers, after an accident at the Japanese Kioxia, its inventor holding 20% of world production.
Yangtze Memory Technologies is the only Chinese player to master the development and production of NAND flash memory. Talks, tests would be underway between the structure and Cupertino. Its owner is easy to guess. The rescue of Tsinghue Unigroup will make more than one happy.