Foxconn expects fine in China for investment
2022.12.19 01:07
Foxconn expects fine in China for investment
Budrigannews.com – A person with direct knowledge of the situation stated on Monday that Foxconn, the largest contract electronics manufacturer in the world, is likely to receive a fine from the government of Taiwan for an unapproved investment in a Chinese chip manufacturer.
Taiwan, which Beijing considers to be sovereign Chinese territory, is tightening its laws to stop China, which it claims is stealing its chip technology, from expanding its semiconductor industry.
Foxconn, a significant subsidiary of Apple Apple, a supplier and iPhone manufacturer, announced late on Friday that it would be selling its stake in the troubled Chinese chip conglomerate Tsinghua Unigroup after revealing its ownership of the company in July. Saturday, Taiwan stated that it would impose a fine on Foxconn for the investment.
The deal had not been approved by Taiwan’s government, which must approve all outbound investments. In order to prevent companies from locating their most advanced technology offshore, Taipei also prohibits companies from building their most advanced chip foundries in China.
Reuters was informed by a person with knowledge of the situation that the Economy Ministry would get in touch with Foxconn on Monday to confirm the equity sale.
The source, who was not authorized to speak with the media, stated, “Even though the investment was later pulled, the fact has already been established that they invested first, and they will be fined.”
The source went on to say, “It should not take too long for Hon Hai to be punished,” referring to Foxconn’s official name, Hon Hai Precision Industry Co Ltd. Reuters has previously reported that the business may be subject to a fine of up to T$25 million, or $813,749.
Foxconn didn’t say anything. On Monday, its shares closed up 1%, beating the market as a whole, which was down 0.7 percent.
A request for information regarding the withdrawn investment was not met with a response from Tsinghua Unigroup.
According to Taiwanese law, the government can “based on the consideration of national security and industry development” prohibit investment in China. Violators of the law can be fined over and again until remedies are made.
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Since there is a worldwide shortage of chips, producers of electronics and automobiles have been shaken. Foxconn has been looking to acquire chip plants around the world. As it enters the market for electric vehicles, it is particularly interested in producing automobile chips.
