China's Tsinghua Holdings Hopes to Partner with Facebook, Microsoft -- Update

By Eva Dou 

BEIJING --Tsinghua Holdings Ltd., the parent company of the chip maker attempting what could be China's largest takeover of a U.S. company, hopes to expand its U.S. partnerships beyond hardware to companies like Facebook Inc. and Microsoft Corp., an executive said.

Tsinghua Holdings Chairman Xu Jinghong told reporters Tuesday that his company had met with representatives from Facebook and Microsoft and hoped to partner with them. It wasn't immediately clear when the meetings took place, and Mr. Xu said that the meetings were preliminary introductions, with no discussion of concrete collaborations.

Tsinghua Holdings is the research and investment unit of China's premier Tsinghua University. It has close ties to senior government officials in Beijing through the school's alumni network. The company has recently gained interest from Silicon Valley firms due to its political influence, amid difficult business conditions in China for U.S. companies.

U.S. tech companies have felt a chill over business in China following disclosures by former U.S. security contractor Edward Snowden in 2013 that Washington allegedly used the country's technology products to spy on foreign governments.

Intel Corp. bought a stake in Tsinghua Holdings' high-tech subsidiary Tsinghua Unigroup Ltd. in September, and Hewlett-Packard Co. sold a majority stake of its China networking business to the Chinese company in May. Tsinghua Unigroup is seeking to acquire U.S. memory chip maker Micron Technology Inc., in what would be the biggest Chinese overseas takeover if successful, The Wall Street Journal reported last month.

"We hope to cooperate with more outstanding companies," said Mr. Xu on Tuesday. "In the future, we hope to cooperate with Microsoft, Facebook."

In response to a question about whether he was already in discussion with Microsoft and Facebook on potential partnerships, Mr. Xu said, "I can't reply. We have been in contact, but we have not discussed concrete business. We all hope to first get to know each other."

Microsoft declined to comment. Facebook didn't immediately reply to a request for comment.

Uber Technology Chief Executive Travis Kalanick visited Tsinghua Unigroup in June, according to the latter company's website. Uber didn't immediately respond to a request for comment.

Mr. Xu said he's seen increased interest from Silicon Valley in the past year, after Tsinghua Unigroup was built into China's largest chip maker through acquisitions. He said it has been a reversal from a decade ago, when he couldn't get meetings with U.S. executives.

"To build good partnerships, you have to be strong yourself first," he said. "If you aren't strong, no one will want to partner with you."

Facebook is blocked in China, but has been seeking a return route into the world's largest market of Internet users. Chief Executive Mark Zuckerberg famously conducted a question-and-answer session at Tsinghua University in Chinese in October.

Write to Eva Dou at [e-mail]

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