Taiwan’s Foxconn Industrial Internet (FII) is injecting over $1.45 billion into China’s debt-laden semiconductor giant Tsinghua Unigroup. Considering the current cross-strait crisis, it’s an unusual move.
FII is an affiliate of the famed Taiwanese foundry giant Hon Hai Group, a key Apple supplier globally.
Tsinghua Unigroup is a large conglomerate established by Beijing’s Tsinghua University. It accumulated almost $30 billion in total liabilities after years of relentless venturing into areas beyond chips, such as finance, energy, and education. As a result, the company declared bankruptcy and began restructuring last July.
According to Radio Free Asia, Hon Hai Group is the largest stakeholder in FII, holding about 85% of its shares. After the capital injection, it will own 17.85% of Unigroup.
It has been a rare investment given Taiwan and Beijing’s current heated political tension. Moreover, in conjunction with the U.S.-China tech war, many Taiwanese have withdrawn from China rather than invested.
As RFA reported, Liu Peizhen, director of the Industrial and Economic Database, believed Hon Hai might be attracted by China’s vast potential in the electric vehicle sector. China accounts for 50% of the world’s electric vehicle sales. Last year, China’s sales of electric vehicles grew by as much as 209%. The outlook for continued growth is promising.
Bloomberg reported that Apple is looking at new suppliers for the memory chips used in iPhones to alleviate its supply chain woes. So it’s not surprising that they would get involved with the Chinese manufacturers of the crucial component.
This year, it examined a NAND flash storage sample produced by Yangtze Memory Technologies Company, a Unigroup-owned company in Hubei province.