China looks to gobble Micron, acquire its own RAM and flash chipper

Uncle Sam may have something to say about that, though

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A WSJ report says a Chinese government owned chip-maker is bidding $23 billion to buy Micron, the USA's top DRAM and flash manufacturer.

The Tsinghua Unigroup is the largest fabless semiconductor business in China. It has a somewhat opaque structure. Think if it as a branch of the Chinese Communist party, run by a party official, which owns a bunch of technology operations originally under the control of Tsinghua University. China has ambitions to have its own DRAM, NAND and procesor fabs and so free itself of dependence on Intel, Micron, Samsung, etc.

It's said to be offering $21/share for Micron, currently trading at $17.61.

The US government Committee on Foreign Investments in the United States (CFIUS) is likely to review any such bid and could say it represents a threat to the security of the USA as Micron is a strategic business, number 2 in DRAM behind Samsung.

Tsinghua Unigroup is not unknown to US IT tech interests. The WSJ notes it has a large stake in HP's networking business in China.

Analyst Aaron Rakers notes that Tsinghua University has a division focused on Flash storage technology – Solid-State Devices & Integration Technologies Research. Intel entered into agreements with Tsinghua Unigroup, including joint development work on Intel architecture and communications-based technology for smartphones.

Intel agreed to invest up to RMB 9.0 billion (~$1.5 billion) as of the date of the agreement to own a 20 per cent minority stage in the holding company under Tsinghua Unigroup.

Data nearness to compute is being viewed as more and more important, slowly lessening our long term dependence on disk. There is a corresponding rise in importance of flash and DRAM technology, making Micron a valued US industry asset.

If the WSJ story is real, it is an audacious bid which, from a geo-political strategic point of view, the US government could well block. ®

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