Foxconn to divest stake in China chipmaker
A Hon Hai Precision (Foxconn) subsidiary was tipped to offload a minority stake in China-based semiconductor manufacturer Tsinghua Unigroup after being threatened with a fine by the Taiwan government for an unauthorised investment, Bloomberg reported.
Foxconn Industrial Internet plans to sell the stake for at least CNY5.4 billion ($774.4 million) to Yantai Haixiu IC Investment Centre, Foxconn stated in a stock market filing. It added it will sell the indirect stake because it was unable to finalise the deal. After assessing the value of the investment, the company plans to conclude the sale by 15 March 2023.
The Ministry of Economic Affairs warned Foxconn could face a fine of up to TWD25 million ($816,811) for the investment, which was not reported to the government, Bloomberg wrote.
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Taiwan prohibits companies from producing their most advanced chips in the mainland, with all investments requiring government approval.
The Shanghai-listed subsidiary in July acquired a 15 per cent interest in Tsinghua Unigroup through a newly-created investment fund.
The disposal comes as Chinese chipmakers are targeted by new US export controls, with Yangtze Memory Technologies Co and dozens of others added to a list of companies banned from importing certain goods, including advanced chipmaking equipment.
