3 Min Read
TAIPEI (Reuters) - Taiwan has begun reviewing Chinese state-backed Tsinghua Unigroup's proposals to buy stakes worth nearly $1 billion in two domestic semiconductor companies, putting the deals under intense scrutiny of a new government less friendly toward its giant neighbor.
A final decision on Tsinghua's partial acquisitions of chip testing and packaging firms Powertech Technology Inc and ChipMOS Technologies Inc will be a test for the new government of President Tsai Ing-wen, which takes office on Friday. Tsai had earlier slammed Tsinghua's proposals as a "huge threat" for Taiwan.
But given that the number of proposals by Tsinghua have dropped to two from three earlier and that the value of the total deal has more than halved, the chances of the proposals being approved have increased, industry executives say. The results of the review process won't be known for some months.
"We have asked for more information, both involving basic and key issues," a representative of the island's Investment Commission, which reviews major inbound and outbound investments involving Taiwanese companies, told Reuters, without elaborating on what the issues were.
Tsinghua Unigroup submitted its applications about a month ago but the review process didn't begin until after Siliconware Precision Industries Co (SPIL), a third Taiwanese chip test and packager, announced it was terminating a similar deal with the Chinese investor at the end of April, people familiar with the deals said.
"It categorically kicks off the review process," said David W. Wang, a ChipMOS vice president.
Tsinghua Unigroup, which told Reuters last year that it has ambitions to become the world's No. 3 chipmaker, did not immediately reply to an emailed request for comment.
Following civil war in China, Nationalist forces fled in 1949 to Taiwan which has been self-ruled ever since. But China regards it as a wayward province to be taken back by force if necessary, fuelling fears among Taiwanese about Chinese influence in the island's main industries.
Beijing distrusts Tsai and her ruling Democratic Progressive Party, which traditionally favors independence for Taiwan and won decisively in parliamentary and presidential polls in January.
Taiwan's Investment Commission said early on it would look at Tsinghua's proposals as one and subject the offers to review by the island's newly elected parliament, national security advisers and financial regulators.
With SPIL's $1.76 billion deal off the table, Tsinghua's acquisition plans in Taiwan more than halved from an original $2.6 billion in total.
Reporting by J.R. Wu; Editing by Muralikumar Anantharaman