China's Tsinghua Unigroup aims big in building chips

China is importing more chips than oil every year, and that's something a company in the country wants to change. Tsinghua Unigroup said it's planning on investing 300 billion yuan (£30.9bn) over the next five years, in a bid to enter the top three of the world's biggest chipmakers.

A company controlled by Tsinghua University was in talks with a US-based firm involved in the chip industry, chairman Zhao Weiguo told Reuters in an interview.

He said that a deal could be finalised before the month ends, but declined to give more details. He did, however, say that buying a majority stake was unlikely as it was too "sensitive” for the US government.

"If you can't be the top-three giant, it will be very hard to develop your business in the chip industry," Zhao said, citing reports that China imported more chips than crude oil every year. The next five years is key... There is an enormous market out there."

The current top three are Intel, Samsung and Qualcomm, with the latter being the smallest of the bunch. The sheer size of Tsinghua Unigroup's planned investments is almost equal to Intel's $50 billion chip revenue last year and could disrupt the NAND chip industry, Reuters says.

The top five chipmakers control more than 90 per cent of the global NAND chip market after years of boom-and-bust squeezed out smaller players.

The company is largely dependent on foreign chips, and the industry is now being seen as a strategic priority for the Chinese government.