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Taiwan tightens rules on equity transfer to China for semiconductor firms

Move intended to protect country’s key technologies from being exported to China

Taiwan, China flags. (Getty Images)

Taiwan, China flags. (Getty Images)

TAIPEI (Taiwan News) — Taiwan is taking steps to prevent key technologies from being exported to China, with a focus on semiconductor businesses and panel manufacturers.

The Ministry of Economic Affairs (MOEA) has proposed an amendment to a regulation governing Taiwan's investment in China. It will impose scrutiny on plans to transfer the equity of a Taiwan company to a Chinese national, corporation, group, or organization.

The rule applies to businesses that have a presence in China and involve critical technologies. Firms in the semiconductor industries, an area where Taiwan holds a competitive advantage, are among those subject to special review by the MOEA Investment Commission, reported CNA, citing MOEA officials.

The targeted companies will have to acquire approval for any equity transfers, as the plans will be considered “technological cooperation.” Currently, companies are allowed to do so without permission and are only required to register with the authorities after such deals are done.

The move will reinforce measures having been taken to prohibit an outflow of the country’s key technologies.

Last August, MOEA proposed changes to a set of investment guidelines, which tightens the transfer or authorization of the use of specialized technologies and integrated circuit (IC) layouts from Taiwan to China. The amendment went into effect at the end of 2020.

Updated : 2022-01-21 10:50 GMT+08:00