Will Chinese Investment in MediaTek be Blocked?

21 Jun

Opponents of permitting Chinese investment in MediaTek called on the government Saturday to not change existing regulations for the benefit of the smartphone chipmaker.

“Our semiconductor design industry has a large market in China and it faces a huge amount of pressure to allow direct Chinese investment,” New Power Party (NPP) Executive Chairman Huang Kuo-chang told The Taipei Times.  “Taiwanese government regulations are their strongest defense, because it enables them to tell Chinese firms that no is no and there is nothing they can do,”

Many Taiwanese IC makers have not publicly opposed the MediaTek deal because they are afraid of repercussions from Beijing, Huang said, adding that those firms are actually not in favor of the deal because it could set a precedent that might lead to further pressure for technology transfers as a pre-condition for investment.

MediaTek chairman Tsai Ming-kai has pushed for a conditional relaxation of the ban on Chinese firms making equity investments in local IC design firms in a bid to boost market share in China and gain the chance to participate in the drafting of 5G wireless regulatory standards.

Tsai Hung-cheng, a sociology professor at National Sun Yat-sen University, told The Taipei Times: “The government must be proactive and prevent companies from acting purely for their individual interests, because China is willing to give the first firm [that pushes for allowing investment] rich incentives to make the breakthrough possible.”