UTAC (Taiwan) Corp (聯測科技), a local chip testing affiliate of Singapore's United Test and Assembly Center Ltd (UTAC), is under investigation for alleged illegal investment in China. The probe comes amid the government's tightening of controls over China-bound investment, an Investment Commission official said yesterday.
The investigation was launched after the UTAC parent company announced on Tuesday that it will enter into a US$81-million chip assembling and testing venture with Semiconductor Manufacturing International Corp (SMIC,
"We are concerned about weather UTAC (Taiwan) is illegally investing in a chip testing plant in China through its parent company," Huang Chin-tan (黃慶堂), head of the Investment Commission, told the Taipei Times in a phone interview.
The commission is the nation's China-bound investment watchdog.
Despite the fact that chip tester is a unit completely owned by the Singaporean company, chairman Charles Chen (
Chen, who is the son the Taiwanese container shipping giant Wan Hai Lines Ltd's (萬海航運) founder, is a UTAC shareholder. Wan Hai spokesman Jason Lee (李炫宏) said the shipper does not hold a single share in UTAC.
Huang said the commission has requested UTAC (Taiwan) provide clarification on the issue within three weeks.
Local companies are still prohibited from setting up chip testing and packaging factories in China. Local chipmakers must get government approval to set up units there.
The government planned to lift the ban by the end of this year, but it reversed the decision after cross-strait relations deteriorated after Beijing passed its "Anti-Secession" Law in March, providing Beijing with a legal justification to use "non-peaceful" means to prevent Taiwan from declaring formal independence.
In response to the government's probe, UTAC (Taiwan) officials claimed that it has neither directly nor indirectly invested in any Chinese plant.
"It is the decision of our parent company UTAC to form a joint venture with SMIC, not ours. It is unlikely for UTAC (Taiwan) will tap into the Chinese market through UTAC," said president Tsai Chung-cher (蔡宗哲) in a statement released yesterday.
UTAC (Taiwan), previously known as UltraTera Corp, was acquired by UTAC in March in a share swap worth US$475.77 million, creating the world's third-largest semiconductor chip-tester and packager. Currently, UTAC (Taiwan) owns a 48 percent-stake in the new company and occupies three seats in the 15-member board.
UTAC (Taiwan) now provides testing services to semiconductor heavyweights such as Hynix Semiconductor Inc, flash-memory card giant SanDisk Corp and Taiwanese computer memory chipmaker Nanya Technology Corp (南亞科技).
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