Zhao Weiguo, former chairman of China Tsinghua Unigroup, was sentenced to death with a two-year reprieve for corruption, illegal profiteering, and breach of trust. He was also ordered to confiscate all his personal assets. Zhao, who once shocked the semiconductor industry by boasting he would "buy TSMC and acquire MediaTek," is now a prisoner.
According to media reports, between 2014 and 2021, Zhao Weiguo took advantage of his position and conspired with his associate Li Luyuan to arrange for the company he actually controlled to purchase real estate at a low price that should have been acquired by Tsinghua Unigroup, illegally appropriating state-owned assets worth 470 million yuan (all amounts below are in RMB).
At the same time, Zhao Weiguo transferred profitable operations of the group to Li Luyuan and others, or purchased services from her company at prices far above market value, resulting in direct economic losses of RMB 890 million to the Chinese government. In 2019, Zhao further instructed the directors of a listed company he controlled to lease projects to Li Luyuan's company at low prices, resulting in losses of RMB 46.45 million.
On May 14, the Intermediate People's Court of Jilin City, Jilin Province, China, publicly pronounced the first-instance verdict in the case of Zhao Weiguo's embezzlement, illegal profiteering for relatives and friends, and breach of trust to damage the interests of listed companies. Zhao Weiguo was sentenced to death for embezzlement with a two-year reprieve and deprivation of political rights for life.
Zhao Weiguo escaped death. The verdict pointed out that Zhao Weiguo pleaded guilty and repented, actively returned the stolen money and property involved in the case, all the stolen money and property had been recovered, and he had made major meritorious contributions, so the death penalty would not be executed immediately.
Cai Shenkun: Zhao Weiguo's suspended death sentence is linked to a CCP personnel struggle
Current affairs commentator Cai Shenkun told this station that the Tsinghua Unigroup issue isn't simply an economic one, but rather involves a complex political context. Tsinghua University controls the company, which has deep ties to political interest groups within the university system. Like Founder, another university-run enterprise, Tsinghua Unigroup was once a high-performing tech company, but its success hinges not only on market competitiveness but also on strong political connections.
"Tsinghua University has long been an important birthplace of senior CCP officials. Many party and state leaders have Tsinghua backgrounds, making Unigroup an important platform for the transfer of power and interests," Cai Shenkun continued. "That is why Zhao Weiguo was sentenced so heavily. On the surface, it was due to corporate debt issues, but in reality it may be a 'killing the chicken to scare the monkey', a warning to the political group behind the Tsinghua faction," he said.
Especially before the Fourth Plenary Session of the 19th Central Committee of the Communist Party of China, Cai Shenkun believed that fierce internal struggles within the top leadership created immense pressure for personnel adjustments. Who would rise and fall, and who would gain access to the core of power, all needed to be planned in advance. Therefore, in addition to cleaning up businesses and capital, a simultaneous campaign to rectify work styles and combat corruption was launched, with 15 central inspection teams dispatched to various regions to adjust and strategize for this personnel struggle.
Tsinghua Unigroup's expansion through mergers and acquisitions ultimately led to bankruptcy
Tsinghua Unigroup originated as a technology company controlled by Tsinghua University in 1988, which was later reorganized into Tsinghua Unigroup. After Zhao Weiguo took over as chairman of Unigroup in 2010, he actively led mergers and acquisitions, including the acquisitions of Spreadtrum Communications and RDA Microelectronics, and also attempted to acquire stakes in Taiwanese companies like Powertech Technology and Siliconware Precision Industries.
In 2014, Intel announced a 9 billion RMB investment in Tsinghua Unigroup, acquiring a 20% stake in the company. However, as the US-China trade war escalated, Intel terminated the partnership in 2019. Tsinghua Unigroup rapidly expanded its assets through mergers and acquisitions. However, profits failed to keep pace with the expansion, leading to a financial crisis for the group.
Zhao Weiguo boasted about merging with MediaTek and buying TSMC, prompting a joint letter from academics to oppose his claim.
After taking over Powertech Technology, Zhao Weiguo ambitiously threatened to merge with Taiwan's leading IC design company MediaTek and acquire the leading foundry TSMC, sparking widespread alarm within Taiwan's semiconductor industry and academia. This prompted a petition from Taiwanese academia opposing the opening of Taiwan's IC design industry to Chinese investment. Over 500 scholars and experts in the fields of electronics, information technology, and other fields signed the petition, ultimately thwarting Unigroup's acquisition ambitions.
Li Zhongxian, a professor of electrical engineering at National Cheng Kung University in Taiwan who signed the petition, wrote on his Facebook page that if China were to gain firm control over Taiwan's major IC design companies, Zhao Weiguo, with such significant military achievements, would immediately become a leading figure in China's response to Taiwan. Even if he later made a small profit within the company, it would likely be fine! He lamented, "History has no ifs, but this past event is chilling."
In an interview with this station, Lee Chung-hsien pointed out that MediaTek's actions were highly controversial back then, when it proactively informed Zhao Weiguo which Taiwanese high-tech companies it was considering for a potential acquisition. If a successful acquisition of a major IC design company like MediaTek were successful, Tsinghua Unigroup would have established a beachhead in Taiwan, allowing it to move into wafer manufacturing, foundry services, and packaging. Taiwan's entire semiconductor supply chain could potentially be swallowed up by China.
If Tsinghua Unigroup successfully acquires Taiwanese companies, it may shake up the global technology landscape
Lee Chung-hsien stated that if this were to happen, Taiwan's "clean network" would be completely impervious to cleanliness and would be directly viewed by the international community as part of the "red supply chain." "Even more dangerously, Taiwan's computing power in the field of artificial intelligence is among the best in the world. If this technology and production capacity fell into Chinese hands, it would have a profound impact on global science and technology and security. The US's policies toward Taiwan, from economic to military, would then be highly uncertain, with unimaginable consequences."
Looking back now, Li Zhongxian couldn't help but admit that he never expected to successfully block Tsinghua Unigroup. At the time, the mainstream voice, even senior government officials, advocated for "small-scale opening." Only a few people signed a petition calling for it, and even leading academics were reluctant to speak out due to China's interests. It was indeed difficult to be optimistic. He said that looking back, he realized how crucial it was to block Tsinghua Unigroup. Now, with the US-China chip war in full swing, Taiwan's ability to maintain a key position in the global semiconductor industry is largely due to not allowing Tsinghua Unigroup to succeed.
Lee Chung-hsien emphasized that the pace of change in the information revolution is truly astonishing. In just ten years, the global division of labor has become incredibly complex. Historical events often struggle to attribute direct contributions to any single group or individual, as was the case with the Tsinghua Unigroup incident. Initially, it was driven by just a few individuals, yet incredibly, it was successfully blocked. Truly, "God bless Taiwan!"
