The report points out with “SUMMITVIEW” as the leader, China Investment originally planned to buy ISSI for US$19.25 a share. However, Cypress Semiconductor subsequently announced its successful purchase of ISSI FOR US$19.75 a share, which was higher than the value of China Investment. The purchase of ISSI was entirely in outstanding stocks.

As soon as Cypress Semiconductor completed its purchase of ISSI, this became an obstacle to China’s plan to develop its memory industry through mergers and acquisitions of major international manufacturers. Consequently, the plan may be shifting towards buying Taiwanese memory manufacturers.

The report explained that in the short term, major Mainland Chinese cellphone companies have begun a movement to make production contracts with companies, such as Winbon, Nanya, and Macronix. This may be followed by the launch of a second step to invest in strategic alliances.

Currently, the market value of both Macronix and Winbon is cheaper than investing in Mainland China’s own 12-inch wafer manufacturers. Furthermore, purchasing these companies could reduce the learning curve and facilitate their ability to directly receive international clients. To China Investment Corporation, which is scrambling to invest huge amounts of capital, there are incentives to make these purchases.

(TR/Phil Sweeney)