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Rescuing China's would-be chipmaking champion

Debt-laden Tsinghua Unigroup on fast track for bankruptcy reorganization

Tsinghua Unigroup is on a fast track for asset restructuring under pressure from creditors as the once high-flying maker of computer chips is mired in a nearly two-year debt crisis. At stake are nearly $46 billion of assets and one of China's most ambitious semiconductor investment projects.

Unigroup, majority owned by Tsinghua University in Beijing, was once at the forefront of China's drive to develop a domestic semiconductor industry. The company embarked on a series of acquisitions and investments in the capital-intensive integrated circuit sector between 2013 and 2019, forging partnerships with Intel and HP, and emerging as a major player. But it failed to generate income quickly in an industry famous for huge costs of entry and long payback periods. Since late 2020, the company has defaulted on a raft of bonds amid an escalating capital crunch.

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