China money has entered into Korean fabless semiconductor market that can be translated into as a strategic move by Chinese businesses to be competitive globally.
After strengthening D-Ram market by having Chinese government’s support, it is looking for financial competitiveness in system semiconductor field which is the main technology in IoT.
One Korean fabless business received a request from Chinese investment capital recently whether it has an intention to sell their sales. Chinese capital created a fund with a Korean capital and asked about its intention through Korean investment business, not directly at business.
“As of last year, we received positive response from Chinese market and our result rebounded. We told them we don’t have any plans to sell since we are expecting positive results again this year.” A person in that fabless business said about its response to Chinese capital.
One fabless business that sold its sales to North American business, also received a request about investment from Chinese capital. “Chinese capital was not our target to begin with since we’ve prepared to enter into North American and European market. But we’ve considered them as a candidate from one of the domestic and foreign businesses that hoped to buy our shares.” The representative from that fabless business said about why it rejected a request from Chinese capital.
n all of these, there was a case where shares were actually sold. Memory semiconductor business called Fidelix sold 15.88% of its share to Chinese semiconductor business called Dong Shim Semiconductor to at 8.5 million dollars. Founder of Fidelix stepped down, and Chinese business became the largest shareholder. Dong Shim Semiconductor will secure 25.3% of shares if it finishes increasing capital by issuing new stocks hereafter.
Business circle is expecting that China money will continually introduce to Korean fabless businesses for awhile. China has many global fabless businesses such as Hisilicon, Spreadtrum, and etc, and 9 of them rose top 50 in the world last year. Its market size and high-rank businesses’ sales decisively overwhelm Korean fabless businesses.
But Chinese’ technical skills such as CMOS Image Censor, Touch sensor, and Car Infotainment are inferior to Korean businesses. If they want to satisfy domestic demands by quickly equip themselves with technical skills, merger and acquisition is most favorable. Korean fabless businesses, which grew their importance in Chinese market and introduced their brands, are good targets to invest in.
“I hear stories that Chinese capital is continuously looking for Korean businesses. If one’s business doesn’t have enough investments and have hard time entering into Chinese market, it is probably wise to check and look into Chinese investments.” A person associated with fabless businesses said that Chinese investments can be helpful for small companies.
“There are a lot of incidences where Chinese capital wants to create a fund with Korean capital and invest into semiconductor businesses. But it is true that Korean capital feels burdened about joint fund since the size is too big.” A person in finance business told about why some Korean capitals feel hesitant about joint funds.
“A capital that is looking to invest analyzes that there is a year difference in technical skills between its country’s technical skills and Korean’s technical skills. Korean businesses need to closely look at what kind of positive effects they can have in those countries’ markets by attracting their capitals.” Another person in finance business told what cautions should Korean businesses take when they decide on taking investments.
Staff Reporter Bae, Okjin | withok@etnews.com