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MOEA begins probe into 4 firms accused of helping Huawei build IC plants

10/05/2023 11:17 PM
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A retail outlet of Huawei in Shanghai. CNA file photo
A retail outlet of Huawei in Shanghai. CNA file photo

Taipei, Oct. 5 (CNA) The Ministry of Economic Affairs (MOEA) has begun an investigation into four Taiwanese companies which were accused in a Bloomberg report of helping China's Huawei Technologies Co. build semiconductor plants to determine whether they have been involved in illegal business activities.

The MOEA said its Department of Investment Review sent a notice Thursday to the four companies -- chip material reseller Topco Scientific Co., cleanroom equipment supplier L&K Engineering Co., construction specialist United Integrated Services Co. and chemical supply system provider Cica-Huntek Chemical Technology Taiwan Co. -- to summon them for questioning regarding the accusation.

Earlier this week, the Bloomberg report said the four Taiwanese companies that have engaged in "unusual" cooperation with U.S.-sanctioned Huawei were a subsidiary of Topco Scientific, a unit of L&K Engineering Co., a subsidiary of United Integrated Services and a subsidiary of Cica-Huntek Chemical Technology.

The four companies were accused by the report of building "infrastructure for an under-the-radar network of chip plants" for Huawei with the Chinese tech gadget supplier having set up "its own shadow network of chipmakers" that are supported by the Chinese government.

The MOEA said as the accusation against the four Taiwanese companies had raised concerns in the international community at a time of escalating trade tensions between the United States and China, the Taiwan government had decided to start an official investigation into the matter.

The MOEA said that as part of the probe, the ministry's International Trade Administration will look into whether the four companies have exported any sensitive high-tech technologies and military products that feature on a Strategic High-Tech Commodities (SHTC) list.

The MOEA said any Taiwanese firm that fails to abide by the SHTC list will be subject to a fine ranging between NT$50,000 (US$1,553) and NT$25 million, citing the Act Governing Relations between the People of the Taiwan Area and the Mainland Area.

MOEA cited a penalty imposed on Hon Hai Precision Industry Co., also known as Foxconn on the global markets, as an example, saying that the company was fined NT$10 million last year after its Shanghai-listed communication network equipment subsidiary Foxconn Industrial Internet Co. acquired a stake in Tsinghua Unigroup, a Chinese semiconductor supplier, without getting advance approval from Taiwan's government.

On Wednesday, Economics Minister Wang Mei-hua (王美花) told a hearing held at the Legislative Yuan that the four companies were not supplying any critical technologies to Huawei and that their services merely involved low-end factory affairs, such as wastewater treatment and environmental protection.

However, Wang reminded all Taiwanese companies that they cannot use critical American technologies and equipment while conducting business with Chinese entities sanctioned by Washington, adding that the government will continue to watch closely to ensure Taiwanese firms do not cross the U.S.' red line.

The four Taiwanese companies accused by Bloomberg said their business in China was not illegal as they abided by the national security policy, and that their dealings did not violate U.S. sanctions because they did not supply sensitive semiconductor technologies to Huawei.

(By Liu Chien-ling and Frances Huang)

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