Chinese firm's reported bid for Taiwan's Source Photonics scrutinized

Taipei, July 2 (CNA) The Ministry of Economic Affairs (MOEA) said Wednesday it will conduct a "strict review" of any proposed acquisition of Taiwanese tech company Source Photonics Co., Ltd., following media reports that a Chinese firm was planning to buy the Hsinchu-based company.

Taiwanese media reported that Suzhou Dongshan Precision Manufacturing Co., Ltd. (DSBJ), China's largest printed circuit board manufacturer, had announced plans to acquire Source Photonics for RMB5.9 billion (about NT$24 billion).

The MOEA said Wednesday it had not received an application from Source Photonics related to the rumored buyout and has formally notified the company that any buyout would constitute a change in its ownership structure.

Under regulations governing Chinese investment, any such change must receive prior approval from the MOEA, it said.

Though an application has yet to be received, the MOEA said it sent a formal letter to Source Photonics last month requesting details on its shareholding structure and business operations.

The MOEA said that once an application is submitted, it will review the case together with the National Security Bureau (NSB), the Mainland Affairs Council (MAC) and relevant industrial technology authorities, in accordance with the Act Governing Relations between the People of the Taiwan Area and the Mainland Area.

The review will focus on whether the deal poses risks to national security or negatively affects industrial development, and the company's investment permit could be revoked in line with existing regulations if any risks were found.

Democratic Progressive Party (DPP) lawmaker Hsu Chih-chieh (許智傑) said the company possesses key 3-nanometer technology and urged the government to assess the case with caution.

Hsu also called for the establishment of a list of critical technologies to prevent sensitive semiconductor technologies from being transferred to China.

The MOEA said it has monitored the company's status since 2016, when its upper-level shareholders were classified as Chinese capital.