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Tsinghua Unigroup bid for Micron may harm Taiwan's Inotera: research

Tsinghua Unigroup bid for Micron may harm Taiwan's Inotera: research

Taipei, July 15 (CNA) Taiwanese DRAM supplier Inotera Memories Inc. (???) could be negatively affected by a potential deal that would consolidate China's state-owned chipmaker Tsinghua Unigroup Ltd. and Inotera's shareholder Micron Technology Inc., according to a foreign brokerage. The Wall Street Journal reported Tuesday that Tsinghua Unigroup had submitted a bid to acquire U.S. memory chip maker Micron for US$23 billion, or US$21 a share, which would represent a 19 percent premium over Micron's closing price on Monday. A U.S. brokerage said that this offer, if the report is correct, would confirm China's will to enter the dynamic random access memory (DRAM) market and would prove negative for the industry, as it would fuel concerns about the break-up of the DRAM oligopoly and potential global oversupply. Also, it remains to be seen whether the Taiwan regulator would approve the Chinese state-owned chip maker to continue holding Inotera, a joint venture between Micron and Taiwan's Nanya Technology Corp. (???), as Chinese companies are not allowed to own more than 50 percent in a joint venture in Taiwan and have controlling power, the brokerage said. "We think this potential deal would be slightly negative for Inotera, because, in the long term, China would have more incentive to build up its own fabs instead of procuring DRAM wafers from the Inotera joint venture," the U.S. brokerage firm said in a research note on Tuesday. "We remain Underweight on Inotera, because we don't think the price premium to Micron of this potential deal could benefit Inotera, and we remains cautious on the PC/server DRAM price outlook in the next few quarters," according to the brokerage, whose name cannot be reported because it was offering specific forecasts that could influence the market. Tsinghua Unigroup is 51 percent owned by Tsinghua Holdings, a fully state-owned limited liability corporation with a very wide range of subsidiaries in the technology industry in China. In late 2013, Tsinghua Unigroup acquired chip designer Spreadtrum and chipmaker RDA Microelectronics, each of which involved a payment larger than its market cap. As of 12:30 p.m. Wednesday, Inotera shares had lost 3.96 percent to NT$21.8 (US$0.7) in Taipei trading.
(By Jeffrey Wu)


Updated : 2021-09-24 00:09 GMT+08:00