Taiwan’s government on Saturday said it would fine Foxconn, the world’s largest contract electronics maker, for illegally investing in a Chinese chipmaker even after the Taiwanese company said it shares will be sold.
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The Taiwanese government said on Saturday that it will be fine Foxconnthe world’s largest contract electronics maker, for an unauthorized investment in a Chinese chipmaker even after the Taiwanese company said it would sell a stake.
Taiwan has been wary of China’s ambitions to boost its semiconductor industry and is tightening laws to prevent what it says is China stealing its chip technology.
Foxconn, a big company Apple Company iPhone supplier and maker, disclosed in July that it was a shareholder of struggling Chinese chip group Tsinghua Unigroup.
Late Friday, Foxconn said in a filing with the Taipei Stock Exchange that its subsidiary in China has agreed to sell its entire stake in Tsinghua Unigroup.
Taiwan’s Economy Ministry said in response that its investment committee, which must approve all foreign investments, would ask Foxconn on Monday for a “full explanation” of the amount. invest.
“For undeclared investments, the amount will still be calculated according to the formula and penalties will be imposed as prescribed by law,” it said, without giving details.
Foxconn did not immediately respond to a request for comment.
People familiar with the matter previously told Reuters that Foxconn did not seek permission from the Taiwanese government before the investment was made, and the authorities believe it violated the law governing Taiwan’s relations by itself. ruling over China, which claims the island as its own.
In a statement on Saturday to the Ministry of Economy, Foxconn said that as year-end approaches, the initial investment “has yet to be settled.”
Foxconn said Xingwei, controlled 99% by China-listed unit Foxconn Industrial Internet Co Ltd (FII), has agreed to sell its shares for at least 5.38 billion yuan (772 million yuan). USD) to a Chinese company called Yantai Haixiu.
Xingwei controls a 48.9% stake in another entity that holds a 20% stake in the wholly owned Unigroup company.
“In order to avoid uncertainties caused by further delays or affect investment plans and flexible capital deployment, Xingwei Fund will transfer all of its shares in Guangzhou Shengye to Yantai Haixiu,” it said. .
“Once the transfer is complete, FII will no longer indirectly hold any shares in Tsinghua Unigroup.”
Tsinghua Unigroup did not respond to a request for comment.
Taiwanese law says the government can ban investment in China “based on considerations of national security and industrial development.” Violators of the law can be fined multiple times until the mistake is corrected.
Foxconn, officially Hon Hai Precision Industry Co Ltd, is particularly interested in manufacturing automotive chips as it expands into the electric vehicle market.
The company is looking to acquire chip factories globally as a worldwide chip shortage is plaguing manufacturers of goods ranging from cars to electronics.
Taipei bans companies from building their most advanced foundries in China to ensure they don’t put their best technology abroad.
