Semiconductor Manufacturing chief gets warning

The government warned Richard Chang (張汝京), chief executive of Shanghai-based Semiconductor Manufacturing International Corp (SMIC, 中芯國際集成電路), that he may face jail and fines for violating restrictions on chip-making investments in China, Hong Kong's South China Morning Post reported yesterday.

SMIC spokeswoman Sarina Huang said Chang has received a letter from the Investment Committee of the Ministry of Economic Affairs, about the investment rules.

Chang is discussing the matter with the committee to show he's in compliance, Huang said in an e-mail response, without elaborating.

The Taiwan-born Chang, who holds US citizenship, could be jailed and fined US$750,000, the Post report said, citing an article in BusinessWeek magazine earlier this week.

Chang was quoted as saying the threat was an attempt to "harass" his company.

Earlier this year the government began lifting restrictions on Tai-wanese investment in Chinese chip plants, giving permission for Tai-wan Semiconductor Manufacturing Co (TSMC, 台積電) to open a factory in Shanghai.

Taiwanese investment in advanced technology plants in China has often gone through third countries without government approval. SMIC is China's largest chipmaker but it's registered in the Cayman Islands. Winston Wang (王文洋), son of the founder of Formosa Plastics Corp (台塑), is chief executive of another Shanghai-based chip company, Grace Semiconductor Manu-facturing Corp (宏力半導體).