Chinese Technology Group to Make a US$23 Billion Bid for U.S. Company
Published By : 15 Jul 2015 | Published By : QYRESEARCH
For many years the Chinese government has been supporting moves that will contribute towards the nation’s domestic abilities to produce high technology products. However, China’s dependence on foreign technology makers has been a sore spot for the country’s leaders due to the monetary and security related reasons. For example, last year China invested more in importing chips than importing oil. The nation spend more than US$231 billion on importing chips in the year 2013. This prolonged underdevelopment of the country’s chip segment and can derail the nation’s economic upgrade and suppress its competitiveness.
At present, a China technology group is making a bid worth US$23 billion to take over the United States based memory and semiconductor firm called Micron. If the company is successful, then the Tsinghua Unigroup Limited bid from China will be the largest recorded takeover of a United States based firm by a Chinese firm. This bid is expected to represent approximately 20 per cent premium over the firm Micron’s stock price, however, this was not officially announced.
The Tsinghua Unigroup from China is controlled by Tsinghua University, which is the country’s most prestigious university in science and engineering. Though this group is a state owned one, Intel Corporation bought a 20 per cent stake in the group last year. The group’s bid for the U.S. firm comes after the group bought two domestic chip making companies last year. These companies are called Spreadtrum and Microelectronics.
To reduce the reliance on foreign technology, domestic innovation is considered to be part of the solution. However, the possibility that China will be able to completely remove this dependency seems unlikely in the coming few years. Hence, several firms in China are adopting the policy of buying international technology companies that have good prospects. And semiconductor market has become a major target for these initiatives.