Taiwan Foxconn Withdraws Investment in China Tsinghua Uni Amid Government Opposition
Foxconn Sells Entire Stake in Tsinghua Unigroup to Yantai Haishu in China
[Asia Economy Reporter Kim Pyeonghwa] Foxconn, a Taiwanese supplier for Apple, has decided to withdraw its investment in the Chinese semiconductor company Tsinghua Unigroup and sell all its shares. This decision was made after the Taiwanese government expressed opposition to the investment.
According to Reuters on the 16th (local time), Foxconn announced in Taiwan that it had agreed to sell the 5.38 billion yuan worth of Tsinghua Unigroup shares held by its Chinese subsidiary Xingwei the day before.
Foxconn stated that it would transfer all the Tsinghua Unigroup shares held by Xingwei to the Chinese company Yantai Haishu. It also explained that it would not hold any indirect shares of Tsinghua Unigroup in the future. This was a case of following the Taiwanese government's opposition to the matter.
Earlier, Foxconn had announced in July that it invested 5.38 billion yuan in Tsinghua Unigroup through a private equity fund. The consortium formed by Chinese private equity funds Beijing Zilu Asset Management and Beijing Zhenguang Asset Management acquired Tsinghua Unigroup, which was under bankruptcy restructuring, for about 60 billion yuan, making Foxconn's investment about 10% of that amount.
The Taiwanese government showed discomfort over Foxconn's investment in a Chinese company without official approval at the time. It also considered imposing a fine of 25 million Taiwan dollars. This is because relations with China are at their worst, and Taiwan prohibits the leakage of its semiconductor technology to China.
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Tsinghua Unigroup, a representative company of China's semiconductor rise, actively pursued business such as attempting to acquire the American company Micron but filed for bankruptcy last year due to financial difficulties. After welcoming a new owner, it completed corporate rehabilitation procedures in July this year and replaced its chairman and board members. Although a Chinese private equity fund acquired Tsinghua Unigroup, it is reported that the Chinese government provided the actual funds necessary for the acquisition.
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