Key players in the sector were investigated last year for corruption after the government poured billions of dollars into projects that were stalled or failed.
The regulator says he handed over profitable businesses to his relatives and friends, and purchased goods and services from companies managed by his associates at prices that are significantly higher than the market. The consortium is led by two state-backed venture capital firms.
Around that time, Mr Zhao stepped down as chairman of Tsinghua Unigroup. He was taken into custody by authorities from his home, according to Chinese media outlets.
Semiconductors, which power everything from mobile phones to military hardware, are at the centre of a dispute between the US and China.
In October, Washington announced that it would require licenses for companies who export chips to China using US tools or software, no matter where they are made in the world.
The Netherlands plans to put restrictions on its most advanced microchip technology exports to protect national security, as well as put restrictions on its most advanced microchip technology exports earlier this month.
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