IC cooperation with Lithuania continues despite factory construction halt

Taipei, Nov. 16 (CNA) Taiwan's Ministry of Foreign Affairs (MOFA) said on Saturday that cooperation in semiconductor development with Lithuania will continue, although the construction of a chip factory in a partnership with Taiwan in the capital city of the European country, has been halted.

In a statement, MOFA confirmed Teltonika, a technology group in Lithuania, has stopped the construction of an industrial park in Vilnius, where 10 investment projects, including the one between Taiwan and the Baltic state, had been planned.

The cause of the work stoppage was a shortage of electricity and an unresolved issue concerning a delay of the conversion of land into industrial use.

In a post on social media Linkedin, Arvydas Paukštys, the main shareholder of Teltonika, said that because of the halt in the construction of the industrial park, the contract for purchases of design services from Taiwan for semiconductor development would have to be terminated.

In January 2023, Taiwan's government-sponsored Industrial Technology Research Institute (ITRI) signed an agreement with Teltonika for the semiconductor project in the Lithuania industrial park to build chip production capacity in the European country. The agreement was valued at 14 million euros (US$14.78 million).

Despite the hiccup, MOFA said a semiconductor partnership between Taiwan and Lithuania will continue.

ITRI was not immediately available for comment on the matter.

According to Paukštys, the investments of the 10 factories located in the 55-hectare area of the Teltonika High-Tech Hill Park were being stopped. The construction of the industrial park had been previously scheduled to be completed by 2028.

Cited by ELTA, a news agency in Lithuania, Paukštys said a new semiconductor chip industry will not be set up in the country due to the termination of the contract signed with Taiwan.

In his Linkedin post, the Lithuanian businessman said the halt to the investment would stop the creation of 6,000 new jobs each of which would be paid 10,000 euros a month on average, and several billions of euros in domestic gross product would not be generated as well in Lithuania.

Paukštys said Teltonika had faced difficulties in securing 63 megawatts of electricity as the construction of a planned power distribution center was delayed.

He said although the Minister of Energy had promised that there would definitely be electricity for the construction, LITGRID, an operator of electricity transmission networks, said they had more important projects than the investments planned by Teltonika when he approached LITGRID for power supplies.

According to Paukštys, the founder of Teltonika, under the agreements signed two years ago with the Ministry of Economy, the group has leased state land to build four chip factories and a design center in the high-tech park, but so far the land has not yet been converted into industrial use.

Paukštys said his group had to implement the projects within five years but the change of land use to industrial use has already taken the group two years and the group would probably need another year to secure approval from Vilnius City Municipality for land use changes.

"We cannot even start designing the buildings, because neither the height nor the technical conditions of the construction are clear," Paukštys said, adding that the delay in changing the land use will not allow the company to build the factories by 2027, but the Ministry of Economy has refused to extend the investment contract.

Paukštys was cited by Lithuanian National Radio and Television as accusing the Lithuanian government of having blocked 3.5 billion euros in business investments.