Taiwan begins review of Chinese Tsinghua's chip stake deals in island (updated)

Powertech Technology

17/05/2016 06:38

* Taiwan regulator has asked for more information from 
Tsinghua 
    * Review begins as new govt takes office on Friday 
    * Tsinghua's Taiwan investment plan shrinks after SPIL deal 
off 
 
 (Adds context) 
    By J.R. Wu 
    TAIPEI, May 17 (Reuters) - Taiwan has begun reviewing 
Chinese state-backed Tsinghua Unigroup's proposals to buy stakes 
worth nearly $1 billion in two domestic semiconductor companies, 
putting the deals under intense scrutiny of a new government 
less friendly toward its giant neighbour.   
    A final decision on Tsinghua's partial acquisitions of chip 
testing and packaging firms Powertech Technology Inc  6239.TW  
and ChipMOS Technologies Inc  8150.TW  will be a test for the 
new government of President Tsai Ing-wen, which takes office on 
Friday. Tsai had earlier slammed Tsinghua's proposals as a "huge 
threat" for Taiwan.  urn:newsml:reuters.com:*:nL3N1442KB 
    But given that the number of proposals by Tsinghua have 
dropped to two from three earlier and that the value of the 
total deal has more than halved, the chances of the proposals 
being approved have increased, industry executives say. The 
results of the review process won't be known for some months. 
 urn:newsml:reuters.com:*:nL3N15I530 
    "We have asked for more information, both involving basic 
and key issues," a representative of the island's Investment 
Commission, which reviews major inbound and outbound investments 
involving Taiwanese companies, told Reuters, without elaborating 
on what the issues were.   
    Tsinghua Unigroup submitted its applications about a month 
ago but the review process didn't begin until after Siliconware 
Precision Industries Co (SPIL)  2325.TW , a third Taiwanese chip 
test and packager, announced it was terminating a similar deal 
with the Chinese investor at the end of April, people familiar 
with the deals said.  urn:newsml:reuters.com:*:nL3N17V229 
    "It categorically kicks off the review process," said David 
W. Wang, a ChipMOS vice president.  
    Tsinghua Unigroup, which told Reuters last year that it has 
ambitions to become the world's No. 3 chipmaker, did not 
immediately reply to an emailed request for comment. 
 urn:newsml:reuters.com:*:nL3N13B29S 
    Following civil war in China, Nationalist forces fled in 
1949 to Taiwan which has been self-ruled ever since. But China 
regards it as a wayward province to be taken back by force if 
necessary, fuelling fears among Taiwanese about Chinese 
influence in the island's main industries. 
    Beijing distrusts Tsai and her ruling Democratic Progressive 
Party, which traditionally favours independence for Taiwan and 
won decisively in parliamentary and presidential polls in 
January. 
    Taiwan's Investment Commission said early on it would look 
at Tsinghua's proposals as one and subject the offers to review 
by the island's newly elected parliament, national security 
advisers and financial regulators.  
    With SPIL's $1.76 billion deal off the table, Tsinghua's 
acquisition plans in Taiwan more than halved from an original 
$2.6 billion in total. 
($1 = 32.6160 Taiwan dollars) 
 
 (Reporting by J.R. Wu; Editing by Muralikumar Anantharaman) 
 ((jr.wu@thomsonreuters.com; +886 2 2500 4881; Reuters 
Messaging: jr.wu.thomsonreuters.com@reuters.net)) 
 
Keywords: TSINGHUA UNIGROUP TAIWAN/