Tsinghua Unigroup: The “bank” behind China’s semiconductor ambitions

CHINA ADVISORY - Report 27 Apr 2018 by Andrew Collier

Tsinghua Unigroup is a spin-off of Tsinghua University, the MIT of China. It has developed into a conglomerate that is one of the key funding sources for China’s semiconductor industry. Unigroup raised an initial fund of Rmb180 billion from corporations, banks and state funds. Since then, it has relied heavily on the capital markets for additional money.

Although it is partly supported by the China Development Bank, Tsinghua Unigroup’s main funding comes from the capital markets through a series of aggressive acquisitions and private placements. We estimate Unigroup has raised almost Rmb200 billion this way. However, the company’s reliance on capital operations to fund its business is tied to the cyclical stock market and may be unsustainable in the long-run. In addition, in our view, most of its assets have been overvalued by the capital markets, which could further reduce the ability of Tsinghua to fund its businesses.

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