Foxconn could be fined for investing in a Chinese state-owned chip maker without regulatory approval

Taiwanese electrical device manufacturer Hon Hai Technology Group (best known internationally as Foxconn) does not seek regulatory approval to invest in the embarrassed mainland China’s state-owned chip maker Tsinghua Unigroup You may be fined as such. Reuters It was reported.

The wire agency said on July 15 that Hong Hai could face a fine of up to NT $ 25 million ($ 835,586) because it did not first seek approval of the investment from the Taiwan Ministry of Economic Affairs Investment Commission. Two sources familiar with this issue were cited and reported.

Taipei has not allowed Taiwanese companies to build factories for advanced technology in mainland China, and sources say Hong Hai violated the law on relations between Taiwan and China.

According to a statement on July 11, Hon Hai invested in a Chinese chip conglomerate through its subsidiary Foxconn Industrial Internet (FII).

The largest consumer of semiconductors

Hon Hai has acquired a stake in Tsinghua University in hopes of expanding its semiconductor business, wrote Liu Coral, director of the Central News Agency of Taiwan.

According to Liu, the main reason is that China’s electric vehicle sales increased by 209% last year and now accounts for nearly 50% of the world’s electronic vehicle sales, making it the largest consumer of semiconductors. Is that.

Liu pointed out that Tsinghua’s Yangtze River Storage was the first to succeed in developing NAND flash and XMC’s NOR flash, and Hon Hai hopes to expand its memory and wireless network communication chip business through the acquisition.

According to industry insiders, all current semiconductor manufacturing investment in Hon Hai’s Hsinchu Science Park, known as Silicon Valley in India, Southeast Asia and Taiwan, is in its infancy. However, since Tsinghua has a complete semiconductor supply chain, this will increase Hon Hai’s resources and capacity.

Some commentators say the move suggests a declining original equipment manufacturer (OEM) shift to semiconductors due to Hon Hai.

Lai Chong-chan, a convenor of the Economic Democratic Union, said Hong Hai would use the money he earned from Apple’s work to invest in China’s semiconductor industry, causing problems with trust with the U.S. government. I told the Epoch Times.

Tsinghua Unigoup was acquired by Zhao Weiguo in 2010, acquiring semiconductor company Spreadtrum Communications for $ 1.78 billion in 2013 and RDA Microelectronics for $ 910 million in 2014.

Zhao once boasted of buying TSMC shares to buy MediaTek, but Tsinghua Unigroup went bankrupt in 2021 due to a debt of 100 billion yuan ($ 14.8 billion) due to the rapid expansion of the merger and acquisition. Did.

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