In July this year, a notice from the Beijing No. 1 Intermediate People's Court opened the curtain on the bankruptcy reorganization of Tsinghua Unigroup. Today, the competition of nearly half a year has reached its final stage, who can bring the dawn to Unigroup with 200 billion foreign debt, and the semiconductor industry is looking forward to it.
I. The strife of kings is raging
On July 9, 2021, Tsinghua Unigroup officially issued a notice that the Group received a Notice from the Beijing No. 1 Intermediate People's Court, and the relevant creditors applied to the court for bankruptcy reorganization of the Group on the grounds that the Group could not pay off its debts as they fell due, that its assets were insufficient to pay off all its debts, and that it clearly lacked solvency, and that it had reorganization value and the feasibility of reorganization.
In fact, the high debt caused by the continuous mergers and acquisitions over the years, coupled with the redemption of more than 20 billion bonds in 2020, made Unigroup have a serious debt crisis in November 2020 and began to seek potential investors. Tsinghua Unigroup has always been regarded as optimus prime in China's semiconductor field, and has formed a high-tech industrial ecological chain dominated by integrated circuits, from "core" to "cloud", which is the most extensive layout of China's semiconductor industry cluster and has a certain influence in the global information industry. Whether it is the state-owned capital focusing on semiconductors, or the financial predators who are ready to get involved in the semiconductor and technology industries, as long as they can obtain some of the core assets of Tsinghua Unigroup, they are likely to immediately rank among the first-line ranks of China's semiconductors, so once the news came out, it immediately attracted more than 20 well-known domestic industrial investment institutions and consortiums.
Among them, there are state-owned background groups from Beijing and Shanghai in China's semiconductor highlands, Guangdong state-owned assets background groups that are building the third level of semiconductors, state-owned financial investment groups with strong strength like CICC and CITIC, semiconductor industry giants such as Weier Shares, China Electronics, and Beijing Electronic Control, and large upstream and downstream enterprises such as Lenovo and Xiaomi, all of which have shown strong interest in Unigroup.
According to Caixin, after the first round of comparative screening in January 2021, a "long list" of 14 outstanding strengths was formed as possible strategic partners, entering the next round of competition against Tsinghua Unigroup, almost every of which is the capital of the industry and has strong strength. These include Shanghai State-owned Assets, Hangzhou State-owned Assets, Hubei Provincial State-owned Assets, CITIC Construction Investment, Midea, Country Garden Venture Capital, Hikvision and so on.
II. Seven stars shining dragons and tigers
In May 2021, after a competition of non-binding plans and quotations, 9 of the 14 companies in the "long list" who proposed partial takeover plans were rejected, and 5 companies that proposed overall takeovers entered the next round of "short list". They are: Guangdong Hengjian Investment Holdings Co., Ltd., which represents the state-owned assets of Guangdong Province, Beijing Electronics Holdings Co., Ltd., which represents beijing state-owned assets, Zhejiang State-owned Assets and Alibaba Consortium, Wuxi Industrial Development Group, which represents Wuxi State-owned Assets, and Zhilu Jianguang Consortium.
On October 18, 2021, under the auspices of the Beijing Municipal First Intermediate People's Court, the first creditors' meeting of the substantive merger and reorganization case of 7 enterprises including Tsinghua Unigroup was held. According to the announcement previously issued by Tsinghua Unigroup, the intended strategic investors who intend to register to participate in this restructuring need to meet the scale and financial strength of undertaking the core industries of Tsinghua Unigroup or Tsinghua Tsinghua Group as a whole, and have a certain source of investment funds. At the same time, strategic investors must also have experience in the management, operation or merger and acquisition integration of the chip industry and the cloud network industry, and have the ability to manage and operate the core industries of Tsinghua Unigroup, which can support and promote the core entities under Tsinghua Unigroup to become bigger and stronger. Under such "harsh" conditions, there are still two new industry giants joining the competition - Shanghai Guosheng and Wuyuefeng Consortium, and the central enterprise China Electronics. In this way, on the registration deadline, the Unigroup reorganization "Seven Stars" that finally participated in the competition was finalized.
Among the seven, Guangdong Hengjian Holdings is the provincial enterprise group with the largest net assets in Guangdong Province. As the only provincial-level state-owned capital operation company and industry-finance combination platform in Guangdong Province, it has participated in 10 billion yuan of China Southern Airlines Group, 5 billion yuan of investment in the new energy sector of CGN, participated in ZTE fixed increase, acquired the equity of Easystar, invested in artificial intelligence unicorn SenseTime Technology and many other operations, with a total management scale of more than 100 billion yuan, mainly invested in major projects and infrastructure construction, supply-side structural reform, rural revitalization, advanced manufacturing and other fields. A state-owned capital operation platform with 100 billion equity assets. In recent years, it has gradually involved in 5G, semiconductor integrated circuits, artificial intelligence and other fields.
Beijing Electronic Control is a state-owned super large-scale high-tech industry group authorized by the Beijing Municipal State-owned Assets Supervision and Administration Commission to focus on the electronic information industry.
It has a panel leader BOE, the domestic key integrated circuit equipment North Huachuang and other well-known enterprises, the business areas are distributed in semiconductor display, semiconductor equipment, integrated circuit manufacturing, new energy and other industrial sectors, the main goal is to build an industrial ecology with "core" and "screen" as the core.
Wuxi Industrial Development Group is a state-owned group in Wuxi and the first state-owned enterprise in Wuxi with a business scale of 100 billion yuan. He has participated in the Shanghai Huahong Wuxi Base Project with a total investment of 10 billion US dollars, the R&D and production project of Tianjin Zhonghuan Large Silicon Wafer with a total investment of US$3 billion and the SK Hynix M8 project of South Korea with a total investment of about US$1.5 billion, and the rest has also involved key automotive components, textile and machinery manufacturing, science and technology real estate, electronics and other fields.
China Electronics, a state-owned mega-group company and the largest state-owned IT central enterprise in China, has been ranked among the Fortune Global 500 enterprises for 10 consecutive years, has acquired and reorganized well-known enterprises such as Nanjing Panda Electronics, Guanjie Technology, Zhenhua Electronics, etc., and has a strong influence in the business fields of integrated circuits and key components, high-tech electronics, computers and core components, mobile communication terminals and services. Recently, it has moved its headquarters to Shenzhen to deeply integrate into the construction and development of the Greater Bay Area.
Wuyuefeng Kechuang currently has total assets under management of 20 billion yuan, focusing on investment in emerging industries such as next-generation information technology, clean technology, new energy, and modern service industries, and the total market value of the invested enterprises currently exceeds 100 billion yuan. Shanghai Guosheng is a state-owned state-owned enterprise mainly responsible for operating the municipal aspects of Shanghai, and has also participated in investment projects such as civil aircraft, new materials, high-end equipment, semiconductors, and integrated circuits.
There are two others, one is Zhejiang State-owned Assets and Alibaba, and the other is the Zhilu Jianguang Consortium from Beijing.
III. Whose house the two males compete for
The news in mid-November revealed that after another round of "fighting", Alibaba and Zhilu Jianguang Consortium finally entered the "final" stage, and the strategic investors of Tsinghua Unigroup will be selected from these two companies.
Needless to say, Alibaba is extremely famous. Its e-commerce business and Ant Financial's financial business are deeply rooted in the hearts of the people. Alibaba Cloud, which has the largest market share in China, is the most successful application platform in the domestic cloud ecosystem, which overlaps with the cloud business of one of Unigroup's main businesses, and it can be expected that the combination of the two will bring strength. The flathead brother who invests in the chip field is still in its infancy, and the chips released are mainly server chips for Alibaba Cloud, and the fields of chip manufacturing, packaging and testing, and equipment have not yet been involved, and taking over Unigroup will strengthen Ali's shortcomings. In addition, if Alibaba has strong financial strength and overseas financing capabilities, it should also be able to solve the problem of Tsinghua Unigroup's tight funds.
The other Zhilu Jianguang Consortium, which was jointly established by Jianguang Assets and Zhilu Capital, is slightly less well-known among the public, but has a wide layout and deep cultivation in the semiconductor field, and is the actual hidden champion in the semiconductor industry. The companies that have invested in mergers and acquisitions include Ambrolon Semiconductor, Wansheng Technology, Sibico, United Technologies, Nexperia, Fuba, Austria Semiconductor, etc. Since 2015, there have been nearly 30 large-scale mergers and acquisitions of China's semiconductor and hard technology cooperation reaching billions or even more than 10 billion yuan, and Jianguang Assets and Zhilu Capital have led more than half of these transactions. Through the acquisition and investment of new establishments and other ways and to help these resources and the domestic market effectively integrate, the consortium has established a whole industry chain ecology of integrated circuits from materials to chip design, manufacturing, packaging and testing, and application. The members of the Zhongguancun Rongxin Financial Information Industry Alliance behind the two are Qualcomm, NXP, ON Semiconductors, Foxconn, Anderson Semiconductors, etc.
In contrast, it can be seen that Alibaba's acquisition of Tsinghua Unigroup can make up for its shortcomings and provide a broader business extension. Zhilu Jianguang is to rely on its own industrial capital characteristics to carry forward the original advantages of Tsinghua Unigroup.
Whoever takes over, the first thing to face is a strong cash flow demand, so as to maintain the long-term and stable development of Unigroup's key enterprises such as Tsinghua Unigroup Zhanrui and Yangtze River Storage, so as to survive the research and development process of "long investment and slow return" in the semiconductor industry. Secondly, it is necessary to introduce global innovation resources, through the management and control of the entire industrial chain of the semiconductor industry, to achieve the synergistic integration of the Unigroup semiconductor cluster, so that the benign assets of Unigroup can have good hematopoietic ability and play a role in promoting the existing industries.
Alibaba only needs to fully support Tsinghua Unigroup, with its own powerful resources, it can completely plan its own semiconductor layout.
As the industry's most internationally minded industrial capital, Zhilu Jianguang recently acquired the world's largest semiconductor packaging and testing company Taiwan Riyueguang Holdings in the mainland for 1.46 billion US dollars, and the global semiconductor carrier leader ePAK can further improve the soft underbelly of the semiconductor packaging and testing industry chain of Unigroup or lack. Coupled with the existing semiconductor industry chain cluster, it is completely expected to bring unigroup to a new height.
China's semiconductor industry is a marathon that is sprinting all the time, and by the end of 2021, the restructuring of Tsinghua Unigroup is still pending, and the listing of Tsinghua Unigroup and the continuous investment of Yangtze River Storage have been affected. Today, standing at the crossroads of China's semiconductor history, how far can Unigroup go? Will the strategic investor, who eventually took over, be able to bring nirvana rebirth to Unigroup? Time will tell.