Industry sources have suggested that SanDisk and Toshiba, which jointly develop NAND flash technology, are both being targeted for acquisition by China's state-owned Tsinghua Unigroup.

Unisplendor, a unit of Tsinghua Unigroup, has reached a deal to acquire an about 15% stake in storage company Western Digital. The achievement is actually part of China's ambitions to establish a homegrown industry covering storage devices, DRAM and NAND flash memory, the sources disclosed.

Plans to make an equity investment in Micron Technology and build a 12-inch JV fab with the US-based vendor is China's next step to move closer to its goal of stepping into the DRAM sector, the sources noted. Tsinghua Unigroup will likely take over a 10-20% stake in Micron and form a strategic alliance with the US company, the sources said.

Charles Kau, a senior executive from Taiwan's DRAM industry, will play a key figure in negotiating with Micron for some form of cooperation in the DRAM field, the sources indicated. Kau is expected to join Tsinghua Unigroup soon after leaving his current positions.

China is aware that reaching an agreement with Micron to partner in the NAND flash field will be difficult, since Micron does not solely own its memory process technologies. Technologies held by Toshiba and SanDisk have therefore become a new target, the sources identified.

Acquiring either Toshiba's memory business or SanDisk's will enable Tsinghua Unigroup to gain access to their technology and product portfolios, and raise China's self-sufficiency rate for ICs, the sources noted.