China is facing difficulties in executing plans to merge its fragmented semiconductor industry into a few powerful firms capable of competing globally.
Attempts to Merge Semiconductor Firms
According to sources, the Chinese government is discussing a state-led merger with key chip equipment manufacturers to pool their technologies. However, talks have stalled due to disagreements between companies and investors over ownership structure and valuation.
Experts Analyze Consolidation Effectiveness
Analysts like Edison Lee from Jefferies argue that consolidation would help the country create its own self-sufficient ecosystem and reduce reliance on U.S. companies such as Applied Materials and Lam Research. However, there are concerns that such consolidation may not yield the expected results.
Challenges Amid Global Competition
Despite efforts, not all deals are successfully completed. For instance, several companies, including Empyrean Technology and others, have pulled out of plans due to valuation disputes. Additionally, many asset owners are unwilling to accept offers below book value even amid deteriorating financial conditions.
China continues to push for the development of its semiconductor industry through consolidation but faces numerous challenges and barriers that may complicate this process.
