Former Tsinghua Unigroup Head Zhao Weiguo Pleads Guilty to Corruption Charges Amid China’s Anti-Graft Drive in Semiconductor Industry

Zhao Weiguo, the former head of China’s state-backed chip conglomerate Tsinghua Unigroup, has pleaded guilty to charges of corruption and misappropriation of state-owned assets. This development comes as part of Beijing’s ongoing anti-graft campaign targeting the semiconductor industry.

Key points:

• Zhao Weiguo was accused of illegally misappropriating state-owned assets amounting to over 470 million yuan (approximately US$64.3 million) between 2018 and 2021.
• Prosecutors in Jilin province stated that Zhao manipulated property prices at the Tongzhou Business Park in Beijing, arranging for it to be bought at a low price by a firm controlled by Li Luyuan. This allowed them to profit later from the property’s inflated value.
• Zhao also used his authority to assign profitable operations to certain individuals, including Li, and made purchases from Li’s firms at prices significantly higher than market value, resulting in 890 million yuan in “direct economic losses” for the state.
• Zhao faced additional accusations of leasing projects of a publicly-listed company he controlled to Li at significantly lower than market prices, causing losses of more than 46.45 million yuan for the public company.
• Zhao pleaded guilty and expressed remorse during the trial.
• Beijing has increased its scrutiny of corrupt practices in the semiconductor sector as part of its efforts to develop a self-sufficient semiconductor industry.
• Zhao is among several prominent figures in the chip industry who have been detained under the anti-graft probe.
• Tsinghua Unigroup, once considered crucial to China’s semiconductor self-reliance efforts, faced financial challenges and underwent a debt restructuring process in July 2022.

This case reflects China’s ongoing commitment to combat corruption within the semiconductor industry, particularly in state-owned enterprises and investment funds in this sector.