Tsinghua Group’s strategic acquisitions

So far in this series, we discussed China’s (FXI) changing semiconductor landscape as well as a recent offer made by Tsinghua for Micron’s (MU) acquisition. However, Micron isn’t the first company that has attracted the interest of China-based Tsinghua Unigroup. In May 2015, Tsinghua Holdings subsidiary Unisplendour acquired a 51% stake of Hewlett-Packard (HPQ) in H3C Technologies.

This acquisition will likely make the company a leading vendor in China’s server and storage market. As the above chart shows, Huawei leads the enterprise hardware space with an 18.50% market share. The company is followed by H3C with a 16.50% market share. IBM (IBM), Dell, Cisco (CSCO), and Lenovo are some of the other prominent players in this space.

China Is Getting Huge Interest from Global Semiconductor Players

Lately, Tsinghua Unigroup has been on an acquisition spree to strengthen its presence in the fabless chip space. In 2013 and 2014, Tsinghua Unigroup acquired mobile chip companies Spreadtrum Communications and RDA Microelectronics for $1.78 billion and $910 million, respectively, to target the smartphone space. Spreadtrum chips are widely used in Chinese smartphones and tablets. RDA Microelectronics makes radio-frequency chips for mobile and broadcast devices.

Global semiconductor players strengthen their roots in China

China is a key Asian market for the majority of technology companies. Hewlett-Packard also sold its 51% stake in H3C to Tsinghua Holdings to brighten its growth prospects in China. It also wanted access to a politically connected partner.

Leading semiconductor players Samsung Electronics (SSNLF), SK Hynix, and Intel (INTC) possess chip factories in China. Lately, they’ve geared up to forge investments and joint ventures with the aim to penetrate the Chinese market. This trend will likely improve and enhance local expertise in semiconductor manufacturing and design.

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