Taiwan Fines Foxconn For Unauthorized China Investment

Taiwan's government said it would fine Foxconn, the world's largest contract electronics maker, for an unauthorized investment in a Chinese chip maker even after it said it would be selling the stake, Meg Shen and Ben Blanchard reported for Reuters.

Photo Insert: Foxconn, a major Apple Inc. supplier and iPhone maker, disclosed in July it was a shareholder of embattled Chinese chip conglomerate Tsinghua Unigroup.

Taiwan has turned a wary eye on China's ambition to boost its semiconductor industry and is tightening legislation to prevent what it says is China stealing its chip technology.

Foxconn, a major Apple Inc. supplier and iPhone maker, disclosed in July it was a shareholder of embattled Chinese chip conglomerate Tsinghua Unigroup. Late Friday, Foxconn said in a filing to the Taipei stock exchange its subsidiary in China had agreed to sell its entire equity stake in Tsinghua Unigroup.

Taiwan's Economy Ministry said in response that its investment commission, which has to approve all foreign investments, will ask Foxconn on Monday for a "complete explanation" about the investment.

"As for the fact that the investment was not declared beforehand, the amount will still be calculated in accordance with the formula and the penalty will be imposed in accordance with the law," it said, without giving details.

Foxconn said that Xingwei, 99% controlled by its China-listed unit Foxconn Industrial Internet Co. Ltd. (FII), had agreed to sell its holdings for at least 5.38 billion yuan ($772 million) to a Chinese company called Yantai Haixiu.

Xingwei controls a 48.9% stake in a different entity that holds a 20% stake in the vehicle owning all of Unigroup.

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