TAIPEI: The government is to maintain a ban on Chinese investment in local IC design companies, Minister of Economic Affairs Lee Chih-kung said yesterday, after reports of pressure from technology firms to remove the restrictions.
The Liberty Times (the Taipei Times’ sister newspaper) yesterday reported that MediaTek Inc allegedly pressured the Ministry of Economic Affairs to ease restrictions on Chinese companies investing in local chip designers to facilitate an acquisition bid from China.
However, Lee said MediaTek did not manage to pressure ministry officials.
“We will consider transferring the officials to other positions if they cannot handle the stress,” Lee said during a legislative hearing.
Industrial Development Bureau Director-General Wu Ming-ji said any policy change would have to go through due process and would not be easily influenced by any particular company.
Commenting on the pros and cons of easing regulations on Chinese investment in IC design houses, Lee said there should be a middle ground.
“If I keep the regulations unchanged, they might leave Taiwan. If I lift all the bans and open the market, there is still a possibility that they would leave,” Lee said.
MediaTek yesterday refuted the Liberty Times’ report, saying it was untrue.
According to the report, the Investment Commission said MediaTek needed to file a share acquisition application before it could accept any acquisition bids.
MediaTek, which generates more than half of its revenues from Chinese customers, denied the allegation.
As Chinese investors are barred from investing in local chip designers, MediaTek is not obliged by the regulation to submit any share acquisition proposal from a Chinese firm, according to a company statement submitted to the Taiwan Stock Exchange yesterday.
Chinese semiconductor company Tsinghua Unigroup Inc earlier this year expressed a strong interest in buying MediaTek shares.
In addition, MediaTek said the deal to sell its Chinese subsidiary AutoChips Inc to China’s digital map provider Navinfo Co Ltd for US$497 million would not require approval in advance as related rules stipulate, the statement said.
The deal was announced last month.
The company is only required to notify the Investment Commission of the deal two months after the transaction, it said.
If the company has further investment, or collaboration plans with the Chinese firm, it will follow local rules to proceed with the cases, it said.
MediaTek also plans to spend US$100 million on a new joint venture with Navinfo, or to invest in an existing company, the company said, without disclosing details.
MediaTek said that the deal would help it accelerate its expansion into fast-growing telematics and advanced driver assistance systems markets.
In a separate statement issued yesterday, MediaTek said revenues rose 7 percent to NT$24.64 billion (US$760.45 million) last month from April’s NT$23.02 billion. That represented an annual growth of 60.87 percent.
In the first five months, revenues expanded 32.83 percent to NT$103.56 billion from NT$77.96 billion in the same period last year.
Former minister of economic affairs John Deng in November last year requested the Industrial Development Bureau review the feasibility of allowing Chinese investment in Taiwan’s IC design industry.
