The Ministry of Economic Affairs yesterday said it is assessing the feasibility of allowing Chinese investments in Taiwan’s IC design companies.
“We are considering it, but we have not yet carried out a formal evaluation,” the ministry’s Industrial Development Bureau Deputy Director-General Leu Jang-hwa (呂正華) told a press conference.
The press conference came after local media reported that the ministry is likely to ease restrictions on Chinese investment after MediaTek Inc (聯發科) reportedly urged the government to allow Chinese investments in Taiwan’s IC design sector.
Photo: CNA
The reports said MediaTek is seeking investments from Chinese technology companies, such as smartphone maker Xiaomi Inc (小米) or China Mobile Ltd (中國移動), for strategic cooperation.
The company holds a more than 30 percent share in the Chinese smartphone chips market.
Leu declined to confirm if MediaTek had made such a request to the ministry.
He said the ministry had not received applications from MediaTek or other Taiwanese IC design firms for approval to introduce Chinese partners via investments.
However, Leu said “some” local IC designers did express opinions to the ministry on the matter.
“Some local IC design companies told the ministry that allowing Chinese investments could help them to bolster their connection to the Chinese market,” Leu said.
“However, there were also some IC designers who said they hoped the government would continue its ban on Chinese investments in the local IC design sector,” he added.
Under the government’s current rules, the ban on Chinese investments in the local IC design sector remains in place.
However, the ministry is carefully reviewing the possibility of allowing cross-industry investments between China and Taiwan’s IC designers in a bid to offer flexibility for Taiwan’s manufacturers to seek strategic cooperation with Chinese firms, Leu said.
Any cross-industry investment would acquire the ministry’s approval, and the Chinese funds would not be allowed to exceed 50 percent of the strategic cooperation, he said.
In a bid to protect Taiwan’s IC design industry from the intensifying competition from Chinese rivals, the government will still strictly forbid China’s IC designers from setting up firms in Taiwan or investing in Taiwanese IC designers, he said.
Leu said that easing the regulations is just one of the bureau’s ideas to assist local manufacturers to strengthen their position in the global market.
However, the bureau does not have a timetable to complete a feasibility evaluation for it, he added.
MediaTek, the nation’s biggest handset chip designer, yesterday suggested that the government should conditionally relax regulation on Chinese companies’ investments in local chip designers.
The relaxation will provide more growth opportunities and operation flexibility for local chip designers, MediaTek said in a statement.
As long as Chinese investors are allowed to invest in local chipmakers under strict conditions, they should be permitted to invest in local chip designers as well, under similar rules, it said.
Chinese investors are allowed to own a minor stake in local chipmakers after strict cross-ministerial reviews, according to the Ministry of Economic Affairs.
The ministry said it has not received any application yet from a Chinese firm to invest in local chipmakers since the rules were relaxed several years ago.
Additional reporting by Lisa Wang
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