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Taiwan government unlikely to approve all Tsinghua Unigroup deals

Taiwan government unlikely to approve all Tsinghua Unigroup deals

The Taiwanese government is unlikely to approve all three of Chinese chip firm Tsinghua Unigroup's plans to acquire 25 percent of shares in each of Taiwan's second, third and fourth-largest IC packaging and testing companies, an official said Friday.

Tsinghua Unigroup, which is backed by China's government, announced on Oct. 30 that it has reached an agreement with Taiwan's Powertech Technology Inc. (PTI) to spend NT$19.4 billion (US$588.89 million) to acquire a 25 percent stake in the company, Taiwan's third-largest IC packaging and testing company.

Siliconware Precision Industries Co. (SPIL) and ChipMos Technologies -- Taiwan's second and fourth-largest IC packaging and testing companies -- also announced Friday that they will both enter into a strategic alliance with the Chinese firm and give it a 25 percent stake in the companies for NT$56.8 billion and NT$12 billion, respectively.

In response, Chang Ming-pin, executive secretary of the Investment Commission under Taiwan's Ministry of Economic Affairs (MOEA), said his commission has yet to receive the applications and that it will review the three cases as one, after receiving them.

Because the semiconductor industry is an important sector for Taiwan, Chang said, the reviewing of the three cases will take into consideration whether the investments will have a serious and negative effect on Taiwan's semiconductor sector.

If any of the commission members are against the cases, it is possible that they will not be approved because the Investment Commission's decisions are made by consensus, Chang said.

The latest potential hook-ups between Tsinghua Unigroup and leading Taiwanese high-tech companies have many concerned that Chinese capital is getting too strong of a foothold in Taiwan's highly competitive chip sector and will eventually leave it more vulnerable to Chinese dominance.

Tsinghua Unigroup Chairman Zhao Weiguo recently said that he is planning to invest 300 billion Chinese yuan over the next five years in a bid to become the third biggest chip company in the world.

According to MOEA statistics, Chinese investments in Taiwan reached US$334.63 million in 2014, and US$1.20 billion since Taiwan opened its doors to Chinese investors in 2009.

If approved, any of the three cases would surpass the full-year Chinese investment figure in Taiwan last year. (By Huang Chiao-wen and Christie Chen)

Updated : 2021-09-24 00:16 GMT+08:00