Posted on 07/21/2022 3:26:28 AM PDT by FarCenter
A Hon Hai Technology Group company’s investment in China’s Tsinghua Unigroup has drawn the attention of Taiwanese regulators and raised new questions about semiconductor-related technology transfers to mainland China.
Tsinghua Unigroup is China’s largest semiconductor company while Hon Hai Precision Industry, the core company of the Hon Hai Technology Group, is the world’s largest electronics contract manufacturer.
Headquartered in Taipei, Hon Hai Precision Industry, also known as Foxconn, is best known as the primary assembler of Apple iPhones.
Foxconn Industrial Internet, a Hon Hai subsidiary headquartered in Shenzhen and traded on the Shanghai Stock Exchange, recently invested in Tsinghua Unigroup through a Chinese investment fund without informing the Investment Review Committee of Taiwan’s Ministry of Economic Affairs.
Established in March this year, Xingwei (Guangzhou) Industrial Investment Partnership is one of 10 funds making up Beijing Zhiguangxin Holding Co, which now owns 100% of Tsinghua Unigroup.
That could earn Hon Hai a NT$25 million (US$836,000) fine, on top of which the Investment Commission might not approve the investment.
Under Taiwanese law, any Taiwanese company that plans to invest more than US$50 million (NT$1.5 billion) in China must receive the ministry’s approval in advance. The investment reportedly amounted to 5.4 billion Chinese yuan (US$797 million), far exceeding that legal limit.
Moreover, any investment in a “sensitive” economic sector must be reviewed by Taiwan’s Investment Commission. Sensitive sectors include semiconductor design, manufacturing, test and packaging – i.e., the complete semiconductor production process.
For its part, Foxconn Industrial Internet claimed in a public statement that “FII is an independent company, listed on the Chinese stock market. The company raised capital in China and used the proceeds to invest in third-party private equity funds, with an aim to explore new technologies and investment targets to fuel the company’s future expansion.”
Hon Hai Precision owns 83.5% of Foxconn Industrial Internet, so how independent is it?
In addition to Apple, Hon Hai manufactures products for Amazon, Microsoft, Cisco, Dell, Nintendo, Sony, Nokia, Acer, Xiaomi and other major companies. It is the largest private sector employer in China, with about 1.3 million employees working at a dozen factories. In 2021, it ranked 22nd in the Fortune Global 500.
“Furthermore, mainland China including Hong Kong is Taiwan’s largest export market, accounting for 42% of total shipments in 2021, compared with 15% to the US. Taiwan ran a trade surplus with both, representing 8% of its total trade in the case of China and 35% for the US. Integrated circuits (ICs) and other electronics make up the largest share of Taiwanese exports.”
So its of no interest to you to know that when you buy an Apple, Dell, Cisco or other nominally “American” product, it was quite likely manufactured by Foxconn, which is nominally Taiwanese but actually the largest Chinese contract manufacturer of electronic equipment?
Where does Nancy Pelosi fit into all this? Did her hubby buy stock in chips or something and she plans to travel to Taiwan? Interesting.
I think hubby bought NVIDIA stock. Their chips are mostly made by TSMC in Taiwan, but they also have design and support operations in China.
Hubby’s previous investments were in China.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.