GloFo Chengdu fab site could pass to Tsingua Unigroup
Struggling Chinese chip conglomerate Tsinghua Unigroup could be about to take on Globalfoundries’ wafer fab site in Chengdu, China, according to Digitimes.
Digitimes reports that Chengdu has reportedly gone to Tsinghua Unigroup asking it to takeover the 300mm wafer fab and that in exchange the city government will invest in the company.
Globalfoundries announced plans to invest US$10 billion, along with Chengdu city authorities, in May 2017. However, in August 2018 Globalfoundries announced a radical change of direction, suspending all development work at 7nm. It then cancelled the investment in the Chengdu plant and by early 2019 had cleared out the installed equipment. In 2020 the last employees on site were laid off leaving Chengdu with an empty shell.
On one level the move makes sense because Tsinghua has experience of running wafer fabs. On the other hand, the debt-laden Tsinghua has been close to bankruptcy and had to be bailed out by Beijing Zhiguangxin Holding in July 2022. This provided a number of subsidiaries with a life line for continued operation. These firms include Unisoc – the merger of Spreadtrum Communications and RDA Microelectronics – and Yangtze Memory Technology Co. (YMTC), which is one of China’s most successful startups.
At the time Beijing Zhiguangxin Holding was supported in its buy-out by Foxconn with a 9.8 billion yuan (about US$1.5 billion) investment, through its Shanghai-listed subsidiary Foxconn Industrial Internet (see Tsinghua Unigroup buy-out keeps Unisoc alive with Foxconn tie). However, Foxconn has since sold its stake and been fined by Taiwan’s government (see Foxconn to sell stake in Tsinghua Unigroup, faces fine).
Beijing Zhiguangxin Holdings is a joint venture between two asset management companies, JAC Capital and Wise Road Capital that frequently act as agents of Chinese state policy. With Foxconn’s exit it again holds 100 percent of the Tsinghua Unigroup stock and probably looking for a partner to share the risk.
Meanwhile the chip design subsidiary Unisoc (Shanghai) Technologies Co. Ltd. is reportedly planning to raise 10 billion yuan (about US$1.5 billion) in a funding round that will value the firm at about 70 billion yuan (US$10.3 billion), according to a Reuters report. The funding round would be a stepping stone towards a domestic IPO, the report said.
Related links and articles:
News articles:
Foxconn to sell stake in Tsinghua Unigroup, faces fine
Tsinghua Unigroup buy-out keeps Unisoc alive with Foxconn tie
Tsinghua Unigroup creditors call for restructure
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