Taiwan may fine Foxconn over 'unauthorised' investment in China's chipmaking firm

Foxconn is a Taiwanese multinational electronics contract manufacturing company that is hequartered in New Taipei City, Taiwan. It is one of largest electronics manufacturing companies in world and has factories in several countries, including China, Vietnam, and Mexico. Foxconn is known for producing a wide range of electronics products, including smartphones, tablets, laptops, and or consumer electronics, as well as components such as printed circuit boards and LCD panels. Some of major brands that Foxconn has manufactured products for include Apple, Sony, Microsoft, and Amazon.

Now, Foxconn is reportedly facing threat of being fined by Taiwan's government for an unauthorised investment in a Chinese chipmaker, as per a report from South China Morning Post. Foxconn apparently acquired a stake in Chinese chipmaker Tsinghua Unigroup. stake was disclosed in July and on Friday last week, Foxconn said it would sell off stake. stake was not greenlighted by Taiwan's government, which has to greenlight all outbound investments. Taiwanese law allows government to restrict investment "based on consideration of national security”. Semiconductors are crucial due to ir geopolitical importance. Nations who manufacture vanced semiconductors can use it as a tool of coercion in geopolitics. Taiwan has been concerned about China's efforts to boost its semiconductor industry. 

China wants to gain upper hand in semiconductor technology 

China has been actively seeking to develop its own semiconductor industry in recent years, both to reduce its reliance on imported chips and to strengn its domestic technology sector. To achieve this goal, Chinese government has implemented a number of policy initiatives and programs designed to support growth and development of domestic semiconductor industry. One key policy initiative has been establishment of "Me in China 2025" plan, which aims to increase domestic production of high-tech industries, including semiconductors. 

Under this plan, government has invested heavily in research and development, as well as providing tax breaks and or financial incentives to companies engaged in production of semiconductors and or high-tech products. In dition, Chinese government has also established a number of programs specifically aimed at supporting growth of semiconductor industry, such as "Integrated Circuit Industry Investment Fund," which provides funding for research and development of vanced semiconductor technologies. US has imposed import restrictions on China, to cut off its access to vanced semiconductor manufacturing technology. US wants to ensure it can choke Chinese semiconductor industry before Beijing acquires technological dominance in sector, which would give it a significant vantage.