Mainland China to invest in Taiwan's IC design industry with four conditions

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Taiwan's Minister of Economic Affairs, Deng Zhenzhong, recently accepted an interview with the Financial Times and pointed out that he will strive to open up Taiwan's IC design industry to mainland investment during his term. When attending the Legislative Yuan's Economic Affairs Committee yesterday, he emphasized that considering the trend of international competition, if the future is open, four major supporting measures will be planned, including whether technology is improperly transferred to the mainland, whether mainland factories steal trade secrets, improper poaching, and avoiding the relocation of manufacturers.

The Legislative Yuan's Economic Affairs Committee yesterday invited Deng Zhenzhong and CPC Chairman Lin Shengzhong to report on the progress of the Kaohsiung Houjin No. 5 Light Industry Plant closure plan and the plant site setup, subsequent land disposal, communication with the local government and residents, and the subsequent disposal of the Kaohsiung gas explosion incident; and preliminarily passed the draft Recycled Water Resources Development Ordinance, which is expected to solve the water shortage problem in Taiwan's industrial areas during the dry season.

In an interview with the media before the meeting, Deng Zhenzhong pointed out that except for the upstream design industry, which has not yet been opened up, the midstream manufacturing and downstream packaging and testing of Taiwan's IC industry have been opened up to a limited extent, with only restrictions on foreign investment from having control rights.

Deng Zhenzhong pointed out that given the current international competition in IC design, the government still needs to consider many aspects to help the industry.

He said that if Taiwan moves in an open direction in the future, the supporting measures will focus on four major areas: whether technology will be improperly transferred to mainland China, whether mainland capital coming to Taiwan will steal commercial secrets, and whether talent will be improperly poached, leading to the hollowing out of future industries.

Deng Zhenzhong emphasized that when designing supporting measures, the government will discuss more with the industry to reassure everyone, and will open up to a limited extent under regulated conditions. At the same time, the government will also require invested Taiwanese companies not to reduce employment in Taiwan and require manufacturers to commit to continue investing in Taiwan.

With less than a month left until the end of the year, when will mainland investment in Taiwan be allowed to take part in equity investment? Deng Zhenzhong responded that he hopes it can be completed during his term. He said, "We must first figure out what should be done." The Ministry of Economic Affairs will try to do it step by step, and will only further open up after the supporting measures are complete.

An official from the Ministry of Economic Affairs revealed that Deng Zhenzhong's idea is actually very simple, which is to target the mainland market and give domestic businesses space to make the best strategic layout. If mainland investment in IC design is really allowed, it will be conditional and will definitely be determined on a case-by-case basis, not a blanket opening.

It is understood that the Industrial Bureau is currently in continuous communication with industry players, and that "submissions will only be made when the time is right and there is no doubt in the atmosphere"; currently no industry has made any requests for opening up, as the industry prefers to wait for the government to open up before submitting applications.

Minister of Economic Affairs Deng Zhenzhong said yesterday (26) that he hopes to allow mainland investment to participate in Taiwan's IC design industry during his term in office, but four major conditions must be met, including that technology will not be improperly transferred, mainland investment cannot steal business secrets, improper poaching will not occur, and manufacturers will not move overseas .

He stressed that the Ministry of Economic Affairs will not open up unconditionally, but will relax regulations with related supporting facilities to ensure that Taiwan retains technology, talents and manufacturers. Deng Zhenzhong pointed out that from the perspective of the upstream, midstream and downstream of the semiconductor industry, midstream manufacturing and downstream IC packaging and testing have been conditionally opened up, and mainland capital cannot have control, and restrictions will not be relaxed in the short term; for upstream IC design, it should be opened up under regulations, and supporting measures must be planned.

Deng Zhenzhong went to the Legislative Yuan's Economic Affairs Committee yesterday for questioning. He said in the interview that opening up mainland investment in Taiwan's IC design industry must consider four major issues: whether key technologies will be improperly transferred to the mainland, whether commercial secrets will be stolen by the mainland, whether mainland capital will improperly poach, and whether domestic industries will be moved to the mainland? This package must reassure everyone, and domestic manufacturers must also promise to continue investing in Taiwan before considering opening up, and public hearings are not ruled out.

Source: Economic Daily

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