Chinese Semiconductor Company Qinghua Yuni Fails to Repay Corporate Bonds Again

$450 Million Dollar-Denominated Corporate Bond Default Returns After 10 Days
Second Debt Default Following CNY 1.3 Billion on the 17th of Last Month

[Asia Economy Beijing=Special Correspondent Jo Young-shin] Chinese memory semiconductor company Tsinghua Unigroup has failed to repay its dollar-denominated corporate bonds. The company defaulted last month on corporate bonds worth 1.3 billion yuan that matured on the 17th. Tsinghua Unigroup's total debt is reported to be in the 20 trillion won range.

According to the Chinese financial investment industry on the 11th, Tsinghua Unigroup announced through a Hong Kong Stock Exchange disclosure on the 9th that due to liquidity issues, it would be unable to repay the principal of corporate bonds worth $450 million (4.889 billion won) maturing on the 10th, declaring a default. This is the first time the company has failed to repay dollar-denominated corporate bonds.

As a result, Tsinghua Unigroup also announced that there is a risk of default on an additional $2 billion worth of separate corporate bonds maturing in the future.

Furthermore, on the 10th, Tsinghua Unigroup announced that due to its financial situation, it would be unable to pay one year's interest on the 5 billion yuan corporate bond '18 Tsinghua Uni 04'. Tsinghua Unigroup is required to pay interest annually to holders of this bond until its maturity in 2023, but it failed to fulfill this obligation.

Tsinghua Unigroup is a memory semiconductor design and manufacturing specialist with Tsinghua University holding a 51% stake. Through its subsidiary YMTC, it is mass-producing some products such as 256-gigabyte-class NAND flash based on 64-layer 3D NAND, but its performance relative to investment scale remains insufficient, so its financial situation has not improved significantly.

In the past, the company disclosed plans to invest trillions of won to build a DRAM semiconductor production plant in Chongqing Yangjiang New District and start mass production from 2021, but no concrete news related to this has been reported yet.

Due to the chain default crisis, Tsinghua Unigroup's corporate bond rating, which was AAA?the highest level?until early November, has now fallen to B, a non-investment grade (speculative) rating.

The Hong Kong South China Morning Post (SCMP) pointed out, "The company's recent default deals a blow to China's efforts for semiconductor industry self-reliance."

This content was produced with the assistance of AI translation services.