Taiwan’s national security officials want to convince suppliers of Apple Inc. Foxconn to release an $800 million investment in Chinese chipmaker Tsinghua Unigroup. The deal will definitely not go through, the report said, citing a senior Taiwanese government official who deals with national security issues. Taiwan, the world’s largest electronics contract manufacturer, is increasingly wary of China’s ambitions to boost its semiconductor sector. It has proposed new laws to prevent what it says is China stealing its chip technology, amid growing fears in Taipei that Beijing is stepping up its economic espionage.
The island’s government forbids companies from building their most advanced foundries in China to make sure they don’t take over their best technology. Taiwan faces increasing pressure from China, which considers the democratically administered island its own territory. A Taiwanese cabinet commission has yet to formally review the investment, the report on Wednesday cited an unnamed person briefed on the matter as saying that officials at the National Security Council and the Mainland Affairs Council believed the deal should be blocked.
Foxconn said in a statement that it had submitted reports on the investment to Taiwanese authorities and would continue to negotiate with government officials. She didn’t elaborate. Tsinghua Unigroup did not immediately respond to Reuters’ request for comment. It is clear they have elevated it to a national security level and the outlook is dim, the report quoted one person close to the company as adding that it appeared more difficult to pass a deal with rising tensions in the Taiwan Strait.Tensions in the Taiwan Strait escalated after US House Speaker Nancy Pelosi visited the self-ruled island claimed by China last week, a move Beijing condemned as a threat to peace and stability. Last month, Foxconn said it was a shareholder in chip conglomerate Tsinghua Unigroup through a $798 million investment from a subsidiary.
