MOEA to study Taiwan acquisitions of China semiconductor firms
By Yang Su-min and Y.F. Low, CNA
November 11, 2009, 3:01 pm TWN
TAIPEI, Taiwan -- A settlement reached between a Chinese semiconductor firm and Taiwan Semiconductor Manufacturing Company (TSMC) could test a law that restricts semiconductor investment projects in China by local firms, the Ministry of Economic Affairs (MOEA) said Wednesday.
China-based Semiconductor Manufacturing International Corporation (SMIC) agreed to pay TSMC US$200 million and an undisclosed amount of stock and warrants to settle a trade secrets dispute after losing a lawsuit to TSMC in the United States last week.
The settlement could end up leaving TSMC with a 10 percent stake in the Chinese chipmaker, and Vice Minister of Economic Affairs Lin Sheng-chung told lawmakers that the deal could be interpreted as an acquisition and that it is without precedent.
Lin said the government will have to study whether Taiwanese companies are allowed to acquire Chinese semiconductor companies under existing laws, which to date have prevented local enterprises from buying into China's semiconductor sector.
He indicated that the MOEA's Investment Commission will conduct an in-depth study of the case and inform TSMC if it is found to be in violation of the law.
If the settlement is determined to be legally acceptable, the MOEA will consider future acquisition projects on a case by case basis, Lin said.