Tsinghua Unigroup Ltd merged its memory chipmaking operations with Wuhan Xinxin Semiconductor Manufacturing Corp's, creating one of the country's largest manufacturers of semiconductors.

The company is folding XMC into its growing portfolio of assets and consolidating their combined production capacity, Unigroup's billionaire Chairman Zhao Weiguo said via e-mail. The newly merged entity is called Changjiang Storage Co with Zhao as chairman.

Unigroup, an affiliate of the prestigious Tsinghua University, harbors ambitions of becoming a global player in semiconductors. It has pursued deals around the globe as the standard-bearer of China's effort to build a local industry giant and wean the country off foreign technology. Its core business of semiconductors is seen by the nation's leadership as vital to national security.

The company is just one of several affiliates of State-backed Tsinghua University. Other arms include Tsinghua Unisplendour Co and Tsinghua Tongfang Co.

Together they've spearheaded a spate of high-profile acquisitions in recent years. Unigroup bought RDA Microelectronics Inc and Spreadtrum Communications Inc, and came close to a potential $23 billion bid for Micron Technology Inc.

But it withdrew from a $3.8 billion investment in Western Digital Corp in the face of a US security review.

Its latest target, XMC, began operations in 2008 and claims it's one of the largest players in domestic semiconductors.

It's unveiled plans to participate in the building of a $24 billion semiconductor manufacturing mega-complex that the government is establishing in its home province of Hubei in central China.

An XMC spokeswoman contacted by phone said she wasn't immediately able to comment.

Bloomberg