Charles Kao is rumored to join the Chinese technology conglomerate Tsinghua Unigroup after leaving his current positions. Nanya Technology has confirmed that Kao will be stepping down soon and stated that the company respects his personal plans for the future.

With immense financial strength and a steadfast determination to succeed in the semiconductor sector, the state-linked Tsinghua Unigroup has recently made business overtures to the board members of the U.S.-based memory supplier Micron. Among its propositions, Tsinghua Unigroup is reportedly willing to purchase a stake in Micron for a sizable share premium.

While both sides are still at the negotiation stage, Tsinghua Unigroup announced on September 29 that the trading of its shares had been suspended in preparation for a major asset restructuring. This event could suggest that the two companies are likely close to forming some kind of a partnership.

Reaching a shareholder agreement with Tsinghua Unigroup would give Micron financial security during this period of downturn in both DRAM and NAND markets. Micron is also behind its South Korean rivals Samsung and SK Hynix in DRAM production technology by at least six months.

The U.S. memory supplier’s global market share ranking currently stands at No. 3. If Micron was to ally with Tsinghua Unigroup, it could significantly expand its DRAM shipments in the Chinese market. Based on TrendForce’s analysis, China this year has already consumed 21.8% of the global DRAM output as well as 25% of the global NAND Flash output. Working with a committed Chinese partner would help Micron later on in gaining market share and raising funds.

As the chairman of Micron’s Taiwanese subsidiary Inotera Memories, Kao is also a part of Micron’s senior management. Hence, his presence in Tsinghua Unigroup would conceivably facilitate greater collaboration between the two companies.

Such an alliance however, would possibly be a negative development for Inotera Memories. If Micron followed through with the deal, the company would inevitably built fabrication plants in China. This in turn will weaken Inotera’s position as a major DRAM foundry in the long run.