On May 14, a Chinese court handed a suspended death sentence to the former chairman of state-owned chip conglomerate Tsinghua Unigroup.
Zhao Weiguo, who headed what was once China’s biggest semiconductor company, was found guilty of embezzling state-owned assets, accepting bribes, and causing massive losses both for publicly traded companies and directly to the Chinese regime. His two-year reprieve is good news for the formerly high-flying chip executive, as such reprieves usually result in life imprisonment.
Zhao was placed under official investigation in 2022 and formally charged with graft in 2023.
According to the verdict, Zhao conspired with an accomplice between 2018 and 2021 to illegally seize more than 470 million yuan (about $65 million) in state-owned assets while serving as chairman of Tsinghua Unigroup.
Between 2014 and 2021, he allegedly transferred profitable business operations to related parties, causing losses for a publicly listed company and direct economic losses to the Chinese regime of more than 890 million yuan (about $125 million).
In another scheme, Zhao allegedly instructed directors at a publicly listed company under his control in 2019 to lease a corporate project at prices well below market value to a firm operated by his accomplice. This resulted in additional losses of more than 46 million yuan (about $6.4 million) for the listed company.
Zhao was once hailed in China’s chip industry as a “chip maniac” for his bold ambitions.
Fueled by China’s push for chip self-reliance, Tsinghua Unigroup rose to prominence through aggressive acquisitions. During Zhao’s tenure, the group’s assets grew from 1.3 billion yuan (about $180 million) to nearly 298 billion yuan (about $41.4 billion), with key subsidiaries gaining prominence in cutting-edge sectors including cloud, chips, and memory.
But the group’s rapid expansion failed to deliver meaningful operational growth, leaving the company mired in debt and ultimately forced into bankruptcy restructuring in 2021.
Zhao’s actions were described as having caused “particularly serious losses to state interests.”
In addition to his death sentence, he was stripped of his political rights for life, ordered to forfeit all his personal assets, and fined 12 million yuan (about $1.65 million). The court cited Zhao’s full confession, cooperation with investigators, voluntary return of illicit gains, and the recovery of all embezzled assets as grounds for suspending the death sentence.
The news of Zhao’s sentencing resonated in Taiwan’s chip industry, where memories linger of his aggressive push to acquire influence over leading Taiwanese semiconductor firms.
During a 2015 visit to Taiwan, Zhao publicly proposed acquiring a 25 percent stake in Taiwan Semiconductor Manufacturing Company to gain a controlling interest. He also advocated for a merger between MediaTek and Tsinghua Unigroup’s chip design businesses and urged Taiwan to lift investment restrictions on Chinese firms in the semiconductor sector.
Then-Taiwanese President Ma Ying-jeou’s administration showed interest in allowing Chinese investment—including from Tsinghua Unigroup—into Taiwan’s integrated circuit design industry as a means of enhancing competitiveness. But the proposal faced strong resistance from the public, academia, and industry groups.
After Tsai Ing-wen became president in 2016, her government formally barred Chinese capital from entering Taiwan’s integrated circuit sector, a policy that remains unchanged today.
