Taiwan are expected to impose a fine on Foxconn Technology Group, the world’s largest electronics contract manufacturer, for an unauthorised investment in a Chinese chip maker, SCMP reported on Monday, citing a person with direct knowledge of the situation.
According to the report, Taiwan is seemingly unresponsive to the mainland's ambition to become the top semiconductor producer and is tightening legislation to prevent what it says is China stealing its chip technology.
Foxconn, a major Apple supplier and iPhone maker, disclosed in July it was a shareholder of embattled Chinese chip conglomerate Tsinghua Unigroup, but said late on Friday it would be selling the stake. Taiwan said on Saturday it would fine Foxconn over the investment.
Taiwan’s government, which needs to approve all outbound investments, had not approved the deal. Taipei also prohibits companies from building their most advanced chip foundries in China to ensure they do not site their best technology offshore.
The person familiar with the situation said that the economy ministry would contact Foxconn on Monday to confirm the equity sale.
“Even though the investment was later pulled the fact has already been established that they invested first, and they will be fined,” said the source, who was not authorised to speak to the media.
“It should not take too long for Hon Hai to be punished,” the source added, referring to the company’s formal name, Hon Hai Precision Industry.
Tsinghua Unigroup has not responded to a request for comment on the investment being pulled.
Taiwanese law states the government can prohibit investment in China “based on the consideration of national security and industry development”. Violators of the law can be fined repeatedly until corrections are made.
Foxconn has been seeking to acquire chip plants globally, as a worldwide semiconductor shortage rattles producers of goods from cars to electronics. It is keen to make car chips in particular, as it expands into the electric vehicle market.
