Tsinghua Unigroup Ltd. has made its latest acquisition on the road to becoming a global semiconductor powerhouse: Taiwanese industry veteran Charles Kau.

Kau, chairman of a venture between Nanya Technology Corp. and Micron Technology Inc., brings decades of chip industry experience to Tsinghua as the company seeks partners to produce semiconductors in China.

“We have cooperation with Micron on the business level,” Unigroup Chairman Zhao Weiguo said in an interview Sunday, declining to elaborate on the nature of the cooperation. “We’d like to conduct business by cooperating with current memory giants, by setting up JV plants in China.”

Hiring Kau is another step forward in the Chinese company’s expansion into the $80 billion global memory market. An investment arm of China’s prestigious Tsinghua University, Unigroup is said to have considered bidding for Micron and also said to be close to a deal for Tongfang Guoxin Electronics Co. while an affiliate last week agreed to buy a stake in Western Digital Corp.

Kau co-founded memory chipmaker Macronix International Co. in 1989 before joining Nanya and later becoming president, a position he quit last week. He will remain as a director and keep his position as chairman of Inotera Technologies Inc., the venture between Nanya and Micron, Zhao said.

The 62-year-old Kau will act as one of three global executive vice presidents and have responsibility for the memory business, Zhao said. Kau declined to comment when contacted by phone Monday, while Micron didn’t immediately respond to calls and an e-mail seeking comment outside regular business hours.

Memory chips are used in smartphones and many other electrical devices. DRAM, an abbreviation for dynamic random-access memory, is used to temporarily store data to speed up a device. Flash, which is used to store information, had global sales of $29 billion last year and is led by Samsung Electronics Co., Toshiba Corp. and Micron. China consumes around 25 percent of the world’s NAND flash memory, the more common type of flash, and about 21.7 percent of global DRAM, according to researcher Witsview.

“We hope to enter the memory-chip manufacturing business. The market is big and we are optimistic,” Zhao said. “DRAM market has limited growth and it even saw a declining trend. We’re more interested in flash memory.”

Zhao said he has no plans to buy Intel Corp.’s Dalian factory, nor acquire SanDisk Corp., Toshiba or SK Hynix. A Unigroup affiliate has already bought communications chip makers Spreadtrum Communications Inc. and RDA Microelectronics Inc. and invested in operating-system developer Acadine Technologies.

The group said in February it would receive 10 billion yuan ($1.6 billion) of state-backed funding over five years to invest in chip companies. It has decided to take only 5 billion yuan from the country’s semiconductor fund.

That will give the fund a 10 percent stake in the holding company under Tsinghua Unigroup, Zhao said. Intel, which last year agreed to invest 9 billion yuan, holds 18 percent of the company that owns Spreadtrum and RDA.

“China’s support for the chip industry is a good thing. but at the same time brings difficulty for our overseas investment because Western nations such as the U.S. are very sensitive about the industry,” he said. “In China, no company can refuse government support. We don’t view ourselves as a real state-owned enterprise, sometimes we even don’t want to have too close a relationship with the government.”

Tsinghua Unigroup considered a $23 billion bid for Micron, Bloomberg reported in July. Tsinghua Unisplendour Co. last month agreed to invest $3.8 billion for a 15 percent stake in hard-drive maker Western Digital.

By: DocMemory
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