The Chinese high-tech conglomerate Tsinghua Unigroup confirmed on Friday that it had received a notice from a Beijing court informing one of its creditors to request bankruptcy protection for a debt company. According to statistics, as of mid-2020, Tsinghua Unigroup owes approximately US$31 billion and has US$8 billion in cash and cash equivalents. Reuters.
Tsinghua Unigroup is the owner of many Chinese semiconductor companies, including China’s only 3D NAND manufacturer Yangtze River Storage and mobile SoC designer Tsinghua Unigroup Zhanrui.After moving Reported that YMTC will postpone its 128-layer NAND production, But industry observers believe that bankruptcy is unlikely to disrupt the operation of these assets.
More than 30 billion U.S. dollars in debt
Tsinghua Unigroup is owned by two major investors: Tsinghua Holdings, a wholly-owned subsidiary of Tsinghua University, and Beijing Jiankun Investment Group, a private investment group founded by Zhao Weiguo. Zhao Weiguo is the chairman of the Unigroup. In recent years, Tsinghua Unigroup has conducted several high-profile acquisitions funded by the government and sold bonds to creditors including the state-owned Huishang Bank listed in Hong Kong.
According to reports, the bank has requested the Beijing No. 1 Intermediate People’s Court to initiate the bankruptcy proceedings of the group because the group has repeatedly missed the bond payment deadline since November. Nikkei AsiaAccording to statistics, as of mid-2020, Tsinghua Unigroup owes approximately US$31 billion in arrears and has US$8 billion in cash and cash equivalents. Reuters. As of mid-2020, Tsinghua Unigroup owes approximately US$31 billion and has US$8 billion in cash and cash equivalents. The news agency said that by the end of 2020, the company had defaulted or cross defaulted on seven bonds worth 3.6 billion US dollars. Tsinghua Unigroup said it will cooperate with the court.
“[We] The company will fully cooperate with the court to carry out judicial review in accordance with the law, actively promote the resolution of debt risks, and support the court in safeguarding the legal rights and interests of creditors. “
A tool company
Tsinghua Unigroup has played an important role in China’s “Made in China 2025” initiative to build a self-sufficient semiconductor industry. The company controls some of the most successful Chinese semiconductor and high-tech companies it has acquired over the years.
Among these companies, Yangtze River Memory Technology Co., Ltd. (YMTC) has a fab that can produce 3D NAND memory and logic. YMTC can successfully compete with the world’s leading 3D NAND suppliers in terms of density and performance, thanks to its Xtacking technology. However, compared with giants such as Samsung, its output is quite low.Yangtze River recently Had to postpone Its mass production 128-layer 3D QLC NAND 1.33 Tb Memory device.
Another jewel in Tsinghua Unigroup’s crown is Unigroup Zhanrui, a large-scale mobile phone SoC developer that integrates Spreadtrum and RDA Microelectronics (approximately US$2.7 billion). It now controls the Chinese smartphone SoC market. For the most part, it is quite successful in competing with companies such as MediaTek and Qualcomm.As early as 2014, Intel investment Unisoc has a maximum of 1.5 billion U.S. dollars and holds 20% of the shares.
Another well-known company in Tsinghua Unigroup’s portfolio is Unigroup, a major IT hardware, software, and service provider that provides various servers in China and resells Western Digital’s storage systems. As the demand for servers continues to increase, Unigroup’s revenue in the first quarter of 2021 has increased by 30% year-on-year.
Bankrupt? not a problem!
Over the years, Tsinghua Unigroup has been trying to make truly large-scale overseas acquisitions to obtain technology and gain international recognition. In 2015, it tried to acquire Micron Technology for US$23 billion and a 15% stake in Western Digital for US$3.78 billion. Both of these transactions were basically blocked by the Committee on Foreign Investment in the United States (CFIUS).
Given the importance of Tsinghua Unigroup to the Chinese government and its highly competitive portfolio of companies, bankruptcy is unlikely to result in disruption of its operations.
“Semiconductors are a priority for the Chinese government,” a source told Nikkei Asia“The Tsinghua Group itself may undergo court-led reorganization, but any impact on how the group company operates is limited.”
