China Eyeing Up GloFo.

China is talking to Abu Dhabi about buying GloFo, reports Digitimes.

China’s Hua Capital Management fund which manages China’s National Integrated Circuit Industry Investment Fund is talking to GloFo’s owner, the Advanced Technology Investment Corp (ATIC) of Abu Dhabi, about buying GloFo.

China recently allocated $19 billion towards beefing up the country’s foundry industry whose best domestic process is 28nm at SMIC. GloFo’s best process is 14nm and its market cap is $13 billion.

China’s aim with GloFo is to get its hands on 14nm finfet technology. The snag is that GloFo’s 14nm finfet technology is licensed from Samsung which might not go along with a sale of GloFo to China.

However GloFo’s recent acquisition of IBM’s semiconductor business came with IBM technical teams working on 10nm and better process technology.

A sale to China would be another huge coup for CEO Sanjay Jha who sold Motorola Mobility to Google for $12.5 billion netting himself a reported $66 million in the process.

The subtext to the deal is that China is getting serious about its dependency on foreign chips. In a a threat to the rest of the world’s semiconductor industry China is aiming to be supplying 40% of its domestic market needs in 2020 and 70% of its market needs in 2025.

The China chip market grew 6.8% CAGR 2010-14 and will be worth $106 billion this year up from $98 billion last year – an 8.5% increase.

Of that $106 billion, Digitimes estimated $19.5 billion was supplied by domestic sources.

The value of China’s domestic IC production has risen 31% CAGR 2010-14.

Other moves by China to boost its chip manufacturing are the acquisition of
RDA Microelectronics and Spreadtrum by the state investment fund Tsinghua Unigroup which has made a $23 billion bid to buy Micron.

A further foray into the memory industry is expected to result from the recent acquisition of ISSI by a Chinese investment group.


Leave a Reply

Your email address will not be published. Required fields are marked *

*