Chips are down

20 May 2016 By Robyn Mak Follow @mak_robyn

New president Tsai Ing-wen will soon decide whether to approve investments worth almost $1 bln by a Beijing-backed group. China’s push into semiconductors is a challenge for Taiwan’s tech-dependent economy. The outcome of the stalled deals will shape broader economic relations.

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Tsai Ing-wen, Taiwan’s first woman president, was inaugurated on May 20. Tsai’s Democratic Progressive Party (DPP) won parliamentary and presidential elections by a landslide in January, helped by a voter backlash against the island’s creeping dependence on mainland China.

Taiwan’s Investment Commission, which reviews major inbound and outbound deals, told Reuters on May 17 that it had begun reviewing proposals from Tsinghua Unigroup, a Chinese state-backed company, to buy stakes worth nearly $1 billion in ChipMos and Powertech, two Taiwanese semiconductor companies.

In December, Tsinghua Unigroup announced plans to acquire roughly 25 percent stakes in three Taiwanese chip companies. In April one of those companies, Siliconware Precision Industries, said it and Tsinghua Unigroup had mutually agreed to terminate their alliance.

During the election campaign, Tsai had called Unigroup’s investment plans a large threat to Taiwan’s semiconductor industry.

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During the election campaign, Tsai had called Unigroup’s investment plans a large threat to Taiwan’s semiconductor industry.

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