Taipei, April 19 (CNA) The Fair Trade Commission said Thursdaythat it had approved an application filed by Asustek Computer Inc., one of Taiwan's leading personal computer vendors, to acquire a stake in local integrated circuit developer uPI Semiconductor Corp.
In giving its approval, the commission said, it ruled out thepossibility that the acquisition will hamper market competition.
In February, Asustek announced its intention to acquire a 49.5percent stake in uPI for NT$438 million (US$14.84 million) as partof the IC firm's fundraising activities.
Upon the acquisition, the uPI stake owned by Asustek will rise to 53 percent and the PC vendor is expected to control the board of directors of the IC developer and take more than half of its supervisor seats.
Under the current Fair Trade Act, a transaction that would result in the acquirer holding a stake of more than 33.3 percent in the company to be acquired or taking more than half of the director and supervisor seats requires review.
The commission said the acquisition deal is a vertical integration,since Asustek's main products are notebook computers, desktop computersand mother boards, while uPI's major product is analog ICs.
It noted that Taiwan has long been focusing on digital IC development rather than analog IC development, which has meant that many local high-tech manufacturers depend on large analog supplies fromforeign developers to satisfy their demands.
Even after the acquisition, the commission said, Asustek is unlikely to stop its purchases of analog ICs from abroad, so market competition is not expected to be undermined.
For the PC market, which has witnessed ever-fiercer competition from both local and foreign vendors and manufacturers, the acquisition of the uPI stake is not expected to help Asustek stifle competition at home or abroad, the commission said.
Now that the application has been approved, the commission said, the acquisition is expected to benefit the economy as a whole.
(By Wu Ching-chun and Frances Huang)