In a deal that will enhance China's homegrown tech industry, Unisplendour, a unit of Tsinghua Unigroup, has decided to invest in 15% stake in Western Digital in the US.

Tsinghua Holdings, is state owned and funded company under Beijing's Tsinghua University. The present deal worth $3.78 billion deal will see a Unisplendour associate become a board member at Western Digital. The representation of the Chinese company will be retained so far as its stake does not fall beneath 10%.

For the deal, Western Digital's shares reported a 34% increase in value from Tuesday's closing price of $68.87. This was, however, not the first such deal struck by a Chinese company with a US tech giant.

By expanding the investments in US, China is now focusing on chip design. Unisplendour paid $2.3 billion to Hewlett-Packard in May this year. Under the deal, the company bought 51% stake in Hewlett-Packard's data-networking business in China.

The company also entered a joint project with 21 Vianet Group, which runs Microsoft's cloud services in China. Under this deal, they were expected to sell cloud services to state-owned companies.

Meanwhile, Intel, has announced a $1.5 billion investment in Tsinghua for buying a 20% stake. The two companies will jointly develop chips for phones in China and other markets.

"Its (Tsinghua's) Chinese government affiliation is making its overseas acquisition more difficult," said Fubon Securities analyst Carlos Peng.

Western Digital will benefit from the deal by bringing down the regulations and scrutiny it faces for its operations in China.