The Ministry of Economic Affairs yesterday said it would conduct a “strict review” of any proposed acquisition of Taiwanese tech company Source Photonics Co (索爾思光電), following media reports that a Chinese firm was planning to buy the company in the Hsinchu Science Park (新竹科學園區).
Local media reported that Suzhou Dongshan Precision Manufacturing Co (東山精密), China’s largest printed circuit board manufacturer, had announced plans to acquire Source Photonics for 5.9 billion yuan (US$823.1 million).
The ministry said it has not received an application from Source Photonics and has formally notified the company that any buyout would constitute a change in its ownership structure.
Photo: Screen grab from Source Photonics Co’s X account
The ministry said that under regulations governing Chinese investment, any such change must receive prior approval.
Although an application has yet to be received, the ministry said it sent a formal letter to Source Photonics last month requesting details on its shareholding structure and business operations.
Once an application is submitted, the ministry would review the case together with the National Security Bureau, the Mainland Affairs Council and industrial technology authorities, in accordance with the Act Governing Relations Between the People of the Taiwan Area and the Mainland Area (臺灣地區與大陸地區人民關係條例), it said.
The review would focus on whether the deal poses a risk to national security or negatively affects industrial development, and the company’s investment permit could be revoked in line with existing regulations if any risks were found, it said.
Democratic Progressive Party Legislator Hsu Chih-chieh (許智傑) said the company possesses key 3-nanometer technology and urged the government to assess the case with caution.
Hsu also called for the establishment of a list of critical technologies to prevent sensitive semiconductor technologies from being transferred to China.
The ministry said it has monitored the company’s status since 2016, when its upper-level shareholders were classified as Chinese capital.
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