By the Blouin News Technology staff

Chip ties grow between U.S. and China

by in Enterprise Tech.

A micro-chip.

A micro-chip.

While certainly positioned as a world power when it comes to consumer technology — ZTE, Tencent, Baidu, and Alibaba all are hugely successful in mobile, social tech, search, and e-commerce, respectively — China is stepping up its semiconductor game. Notably by eyeing chip giants based in the U.S. for both partnerships and mutual investments.

Earlier this month, China’s Tsinghua Unigroup Ltd’s announcement that it plans to invest 300 billion yuan ($47 billion) over the next five years in a bid to become the world’s third-biggest chipmaker was emblematic of the country’s moves towards building its chip prowess. And the company’s reveal is a step forward for both the public and private sectors (51% of Tsinghua Unigroup is owned by Tsinghua Holdings, which is a fully state-owned limited liability corporation) that are clearly trying to elevate their statuses in the semiconductor world. After all, why shouldn’t they? China is already a country that hosts many semiconductor plants. Intel, TSMC, Texas Instruments, and other big names have chip factories there. Intel’s first-ever chip plant in Asia launched in China in 2010, with a $2.5 billion investment from the company.

Reuters reported that Tsinghua Unigroup’s chairman Zhao Weiguo noted that the company is in talks with a “U.S.-based company involved in the chip industry” although that is about as much information as he revealed. But Qualcomm and Intel — two of the world’s leading semiconductor companies — have already taken note of China’s movements.

While Qualcomm had some bad news earlier this month following downed revenue and profits in its fourth quarter, reporting that it had struggled to get Chinese customers to pay for licenses of its 3G and 4G technology, the company is looking ahead to remedying those issues and continuing to deal with China. The EE Times writes that Tsinghuia Unigroup has said that a main portion of the aforementioned $47 billion will be spent on mergers and acquisitions in the U.S. The company has previously expressed interest in merging with U.S. businesses.

China has also experienced a high-volume year of electronic-based purchases and investments — many of them looking at the future of the semiconductor industry. Through shifting government policies and industry investment over the past year — much of which came to the foreground at the SEMICON China 2015 conference in Shanghai earlier this year — it is clear that both public and private sectors want to establish China as a leading world player in the semiconductor realm. It is also a unique example of the government and private entities collaborating for technological advancement without some kind of clash — at least to date.