Consequences of Pelosi in Taiwan. the Taipei government advises Foxconn against investing in China

Taiwanese electronics manufacturer and Apple supplier Foxconn will likely be forced to forgo an $ 800 million investment in Chinese chip maker and foundry operator Tsinghua Unigroup due to rapidly deteriorating international relations.

The Taiwanese government was already considering fining Foxconn about $ 835,000 for failing to obtain regulatory approval of the investment, but now it has emerged that Taipei officials would like all of the group's investment to be written off.

"It is clear that now that the issue has been raised to national security level, the prospects are getting dimmer," said a person close to the company. "With the increase in tension in the Taiwan Strait, the situation becomes even more difficult."

Tsinghua Unigroup was founded in the late 1980s as a wholly owned business unit of Beijing's Tsinghua University, funded by the Chinese Ministry of Education. Tsinghua Unigroup subsidiaries are engaged in mobile chip design, NAND flash manufacturing, IoT, security chip and IT infrastructure. In 2020, the company went through a period of financial difficulty and was forced to restructure.

While Tsinghua Unigroup is looking for investors, Foxconn has sought to expand its presence into sectors outside of components and semiconductors as well. The Taiwanese firm even formed a joint venture to build a chip manufacturing plant in Malaysia last May and was chasing a similar opportunity in India earlier this year.

Obviously, in this period of intense tensions, the Taiwanese government does not look favorably on a joint venture between a national group and a Chinese group to produce advanced chips in the Chinese hinterland. The investment therefore falls within the national interests not only of Taiwan, but also of the United States, which do not want Beijing's further technological development in that sector. Pelosi's visit must also be seen from this point of view, of limiting Taipei's technological investments in China. So Foxconn will have to find a different solution, and maybe in other countries in the area.

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The article Consequences of Pelosi in Taiwan. the Taipei government advises Foxconn against investing in China comes from .

This is a machine translation of a post published on Scenari Economici at the URL on Thu, 11 Aug 2022 10:00:05 +0000.