April 20, 2018 / 7:43 AM / 5 months ago

Alibaba buys Chinese chipmaker to aid IoT biz, help drive local chip sector

SHANGHAI (Reuters) - E-commerce titan Alibaba Group Holding Ltd (BABA.N) has bought a Chinese microchip maker to further its cloud-based “internet of things” (IoT) business, underscoring its commitment to the chip industry, an Alibaba spokeswoman said on Friday.

Jack Ma, founder of Chinese e-commerce giant Alibaba, smiles as he meets Thailand's Deputy Prime Minister Somkid Jatusripitak in Bangkok, Thailand, April 19, 2018 during a visit to the country to announce the group's investment in the Thai government's Eastern Economic Corridor (EEC) scheme. REUTERS/Jorge Silva/Pool

The announcement comes days after the United States banned American firms from selling chips and other components to Chinese telecoms company ZTE Corp (0763.HK) (000063.SZ) for seven years, a move that rekindled discussion in China about the need for self-sufficient tech supply chains.

Senior Chinese officials held meetings this week with industry bodies, regulators and the country’s powerful chip fund about speeding up already aggressive plans for the sector in the wake of the ZTE ban, two people with direct knowledge of the talks told Reuters.

“Alibaba aims to empower different industries through our cloud-based IoT solutions, in which chips play a significant role,” the spokeswoman said in a statement.

“The acquisition of Hangzhou C-SKY Microsystems, a leading Chinese supplier of embedded CPU cores, underlines our commitment to driving the development of the chip industry,” she said, referring to central processing units.

Alibaba did not disclose the terms of the acquisition - the firm’s first involving a chipmaker.

The Chinese e-commerce giant had previously invested in Hangzhou C-SKY Microsystems and was now taking its stake to 100 percent, in line with an interest in the chip industry articulated late last year, said a person familiar with the matter who declined to be identified as the matter was private.

The person did not believe the acquisition was connected to current trade tensions between China and the United States involving tit-for-tat tariffs.

Reporting by John RuwitchEditing by Christopher Cushing

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