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MOEA to carefully screen Tsinghua Unigroup acquisition deals

2015/12/15 21:18:18

Taipei, Dec. 15 (CNA) Vice Economics Minister Shen Jong-chin (沈榮津) said Tuesday that the government will carefully screen deals proposed by China-based Tsinghua Unigroup (清華紫光) to buy stakes in three Taiwanese integrated circuit packaging and testing firms.

Speaking on the sidelines of a meeting of the Taipei Computer Association (台北電腦公會), Shen said the Ministry of Economic Affairs (MOEA) will work closely with related government agencies to review the three investment proposals.

In addition to a careful review by the executive branch, the Legislative Yuan is expected to fend off any possible adverse impact resulting from Chinese investment in local IC businesses in a bid to protect the local IC sector, Shen said.

Last week, Tsinghua Unigroup, a high-tech conglomerate that is backed by the Chinese authorities, announced that it will acquire a 25 percent stake in Siliconware Precision Industries Co. (矽品) and also a 25 percent stake in ChipMos Technologies Inc. (南茂). Siliconware and ChipMos are the second- and fourth-largest packaging and testing services providers in Taiwan, respectively.

In late October, Tsinghua Unigroup signed an agreement to acquire a 25 percent stake in Powertech Technology Inc.(力成), the third- largest IC packaging and testing firm in Taiwan.

The three acquisition deals are expected to total NT$88.2 billion (US$2.69 billion), and have raised concerns over an invasion of Chinese funds into Taiwan's semiconductor industry at a time when China is gearing up to expand its own IC business through aggressive acquisitions.

Shen said that the Investment Commission under the MOEA will take a close look at whether Tsinghua Unigroup will take a controlling stake in each of the three Taiwanese IC packaging and testing firms through the proposed acquisitions.

In addition, the commission will make sure no business secrets or production knowhow is leaked from Taiwan's semiconductor sector to its Chinese counterpart via the buy-out deals.

Shen said that through such close scrutiny of the executive and legislative branches, there is no need for people here to worry about any negative impact arising from the three deals on Taiwan's high-tech industry development.

To counter Tsinghua Unigroup's acquisition proposal, Advanced Semiconductor Engineering Inc. (ASE, 日月光), the largest IC packaging and testing firm in Taiwan and in the world, which currently owns a 25 percent stake in Siliconware as the largest shareholder, announced Monday that it has proposed acquiring the remaining 75 percent stake in Siliconware.

Shares of Siliconware rose 10 percent to close at NT$50.10 on the Taiwan Stock Exchange Tuesday after the ASE announcement.

However, market analysts said that neither Tsinghua Unigroup's acquisition plan nor ASE's proposal is likely to be easily achieved. Tsinghua Unigroup is expected to face political concerns across the Taiwan Strait, while ASE could encounter antitrust worries since Siliconware is the third-largest IC packaging and testing services provider in the world.

Tsinghua Unigroup has also repeatedly expressed interest in acquiring a stake in MediaTek Inc. (聯發科), Taiwan's largest IC design house. While the government still bans Chinese funds from entering in the local IC design sector.

MediaTek, which has urged the authorities in Taiwan to lift the investment ban, said it is open to any form of cooperation with Chinese investors.

(By Jeffery Wu and Frances Huang)
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