Bidding war shaping up over Fairchild

Another Silicon Valley bidding war with a Chinese venture group is shaping up over an iconic valley company.

The prize this time is Fairchild, the mother ship that spawned more than two dozen companies during its heyday, including Intel and AMD.

A much different company than it was in the 1970s when it was spinning off future tech giants, Fairchild accepted a $20 a share, $2.4 billion acquisition offer from ON Systems in November.

Tuesday, Fairchild said it has received a $20.70 a share, $2.46 billion offer from an unnamed bidder. The company’s board said it is sticking with ON’s offer.

The counter-bidder is China Resources and Hua Capital Management, according to Bloomberg. The unnamed bidder improved its offer

Depending on ON’s tenacity, this could be a repeat of the bidding war for Integrated Silicon Solution Inc. last year, in which Hua eventually bested Cypress.

That sale prompted concern in Washington from Rep. Dana Rohrabacher, R. Huntington Beach, who worried that the Chinese acquirers’s objective “has been to acquire important technology developed by U.S. companies, transport intellectual property and capabilities to China, and then deploy these capabilities for primarily domestic use.”

Hua was part of a group that acquired another Silicon Valley chip maker, Omnivison, in April, for $1.9 billion.

The Chinese government about a year ago announced a massive plan to ramp up its domestic semiconductor industry through innovation and acquisition.

Hua Capital Management is an investment team founded with state-owned Tsinghua Holdings and China Fortune-Tech Capital Co. Tsinghua Holdings is funded by Tsinghua University, which is said to be overseeing China’s drive toward semiconductor independence.

Photo: Fairchild Semiconductor logo (Fairchild, Mercury News Archives)


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