China's state-owned Tsinghua Unigroup will invest a total of NT$19.4 billion (US$598 million) in Powertech Technology (PTI) through private placement, according to the Taiwan-based memory packaging and testing specialist.

Tsinghua Unigroup will subscribe to new shares of PTI, which will be priced at NT$75 per unit, for a 25% stake to become the largest shareholder of PTI, said the Taiwan-based company.

After holding 25% of PTI, Tsinghua Unigroup will also designate one person to serve as a director on PTI's board, the packaging firm added.

"Both parties will form an alliance to complete each other's deployment in the semiconductor industry and to jointly achieve a win-win situation," PTI noted, adding the planned alliance is subject to gaining shareholder and regulatory authority approval.

About 80% of the cash injection from Unigroup will be used for its 3D IC packaging plant in Hukou in Taiwan's Hsinchu County, said PTI chairman and CEO DK Tsai at a press event on October 30. The remaining 20% will be for PTI's plants in Singapore and Suzhou, China.

PTI's manufacturing sites are mainly located in Taiwan, where the company employs more than 11,000 people accounting for around 90% of its total workforce worldwide.

Also in PTI's statement, Tsinghua Unigroup chairman Zhao Wei-Guo said "we believe Powetech, with its ability in the assembly and testing industry, will be an important member in the semiconductor industry supply chains of Taiwan and China. We expect to achieve a win-win together following our cooperation."

PTI specializes in backend services for the manufacture of DRAM and NAND flash memory chips. Micron Technology and Toshiba are among PTI's major clients.