Foxconn fine for unauthorised China investment likely to be imposed soon

TAIPEI (Reuters) – Foxconn, the world’s largest contract electronics maker, is likely to be fined soon by Taiwan’s government for unlicensed investments in Chinese chip makers, sources said. a person with direct knowledge of said on Monday.

Taiwan, which Beijing sees as a sovereign territory of China, is wary of China’s ambitions to boost its semiconductor industry and has tightened its laws to prevent China from claiming it is stealing its own chip technology. ing.

Foxconn, a major supplier to Apple Inc and iPhone maker, revealed in July that it is a shareholder in Chinese chip conglomerate Tsinghua Unigroup, but said it would sell its stake late Friday. Taiwan said on Saturday it would fine Foxconn for its investment.

The Taiwanese government, which must approve all foreign investment, did not approve the deal. Taipei also bans building state-of-the-art chip factories in China to keep companies from placing their best technology overseas.

A person familiar with the situation told Reuters the economy ministry will contact Foxconn on Monday to confirm the sale.

“The investment was later withdrawn, but the fact that they invested in the first place has already been established and they will be fined,” said a source not authorized to speak to the media. .

“It shouldn’t take long for Hon Hai to be punished,” the source added, referring to the company’s full name, Hon Hai Precision Industry Co., Ltd.

Reuters previously reported that the company could be fined up to NT$25 million ($813,749).

Foxconn declined to comment.

Tsinghua Unigroup did not respond to requests for comment regarding the withdrawal of the investment.

Taiwanese law says the government can ban investments in China “based on considerations of national security and industrial development.” Violators of the law may be fined repeatedly until remediation is made.

Foxconn has been looking to buy chip factories around the world as a global chip shortage has unsettled manufacturers of products ranging from automobiles to electronics. The company is particularly keen on manufacturing automotive chips as it expands into the electric vehicle market.

($1 = 30.7220 Taiwan Dollar)

(Reporting by Jeannie Kao and Yimou Lee; Writing by Ben Blanchard; Editing by Kenneth Maxwell)

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