As covered in previous news articles, Chinese state-backed Tsinghua Unigroup is seeking to become one of the largest chip makers in the world via a series of investments. Now we hear news that Tsinghua Unigroup has made an offer to buy 20 percent of South Korean chip maker SK Hynix for around $5.3 billion, with the condition that SK Hynix needs to construct a NAND memory chip plant in China. Barron's reports SK Hynix rejected the offer and said it was not for sale.
“Studying other industries that China entered (Smartphones, Solar, LCD to name a few), it is clear that once China enters an industry it will not stop until it dominates the market with value and economics being destroyed every single time. SK Hynix very well aware of this, which is a key reason why they declined Tsinghua’s proposal in our opinion,” wrote Bernstein Research‘s Mark Newman. Phew.