China-based Tongfang Guoxin Electronics, an affiliate of Tsinghua Unigroup, has announced a planned CNY80 billion (US$12.59 billion) private placement project, a step toward building itself as a semiconductor giant in China.

Tongfang Guoxin plans to issue 2.959 billion new shares to a number of affiliated companies under the Tsinghua Unigroup as well as its employees, said the company.

The money being raised is four times Tongfang Guoxin's CNY19.8 billion market value when its shares were suspended for trading in October.

Of the proceeds, CNY60 billion will be used to finance construction of a memory chip plant, CNY3.79 billion to purchase a 25% stake of Taiwan-based IC backend service company Powertech Technology (PTI) and the remaining CNY16.2 billion to acquire other upstream and downstream suppliers in the chip industry, Tongfang Guoxin said.

Tsinghua Unigroup chairman Zhao Weiguo said recently in Taipei that his group's current focus is on its deployment in the NAND flash sector.

While staying in Taiwan, Zhao paid a visit to NAND flash controller chipmaker Phison Electronics, raising speculation that Tsinghua Unigroup is targeting Phison for acquisition as it moves to build its memory chip capacity, according to a Chinese-language Economic Daily News (EDN) report.