The world’s largest contract electronics maker, or formally known as Hon Hai Precision, is likely to be fined soon by Taiwan’s government for an unauthorised investment in a Chinese chip maker, according to sources.
To recap, Foxconn is a major Apple Inc supplier and iPhone maker,
It disclosed in July it was a shareholder of embattled Chinese chip conglomerate Tsinghua Unigroup, but said late on Friday it would be selling the stake.
Taiwan said on Saturday it would fine Foxconn over the investment.
Taiwan’s government, which needs to approve all outbound investments, had not approved the deal. Taipei also prohibits companies from building their most advanced chip foundries in China to ensure they do not site their best technology offshore.
The person familiar with the situation told Reuters that the Economy Ministry would contact Foxconn on Monday to confirm the equity sale.
According to Reuters’ report, neither Foxconn nor Tsinghua Unigroup commented on this issue.
Taiwanese law states the government can prohibit investment in China “based on the consideration of national security and industry development”. Violators of the law can be fined repeatedly until corrections are made.
Foxconn has been seeking to acquire chip plants globally as a worldwide chip shortage rattles producers of goods from cars to electronics. It is keen to make auto chips in particular as it expands into the electric vehicle market.
