With more than 10 years of development, the Chinese semiconductor industry has posted rapid growth, especially in IC design. There are over 600 IC design houses in China at this moment, far more than the 200 counterparts in Taiwan, and their production value is catching up with Taiwan. In the IC manufacturing sector, however, China has lagged far behind Taiwan with its production value accounting for only 1/10 of the Taiwanese industry.

"Currently, only Wuhan Xinxin Semiconductor Manufacturing and Shanghai HuaLi Microelectronics manufacture NOR flash memories and Xi`an Sinochip Semiconductors is the only DRAM design house," says Yaru Shih, Senior Semiconductor Industry analyst at MIC (Market Intelligence & Consulting Insitute), a Taipei-based ICT institute.

"But as China has abundant capital, acquiring memory technologies and products through acquisition has been a way for the government to compensate for the weakness rapidly."

With a complete product line of DRAM, NAND flash, and NOR flash memories, Micron has thus become the most important target for China`s acquisition. Micron has been able to develop its own memory technologies including DRAM, NAND and NOR flash. In 2014, the company was the largest NOR flash maker, while holding a third position in the worldwide DRAM and NAND flash markets.

If Tsinghua Unigroup successfully acquires Micron, they will not only possess the technologies for the three memories but also gain access to Micron`s enormous production capacity. This will significantly enhance China`s importance in the memory industry. In addition, with lower technological entry barriers, Tsinghua Unigroup will boost up China`s share in the worldwide memory industry, suppressing existing market share of Samsung, Toshiba, and SK Hynix as well as smaller vendors.

As the largest and most important memory maker in the United States, Micron has held a key position in the industry. Therefore, Tsinghua Unigroup`s acquisition will surely arouse concern in the whole world and the US government.