Foxconn faces govt hurdles for buying China’s Unigroup in $1.5 bn deal

Media reports said Foxconn will face challenges for China-listed unit Foxconn Industrial Internet to spend 9.8 billion yuan ($1.46 billion) for a stake in Unigroup, as part of Foxconn’s plans to get more into chip-making.
Apple supplier FoxconnTaiwan-headquartered Foxconn is the world’s largest contract electronics maker.

Rio Lu, deputy executive secretary of Taiwan’s Economy Ministry’s Investment Commission, told Reuters that Foxconn needs from permission from Taiwanese government for making investment in embattled Chinese chip conglomerate Tsinghua Unigroup.

Taipei prohibits companies from building their most advanced foundries in China to ensure they do not offshore their best technology.

Rio Lu said the government has been in contact with Foxconn and reminded them that the case needs to be reviewed before doing anything.

If Foxconn breaks the rules it can be fined T$25 million ($837,577), Lu said, adding her department has already reported this plan to Economy Minister Wang Mei-hua.

Foxconn, an assembler of iPhones for Apple, said in a statement sent to Reuters late on Wednesday that it will handle the case in accordance with the rules. It did not elaborate.

Foxconn has not formally confirmed any plan to invest in the Chinese group.

Tsinghua Unigroup fell into debt under former chairman Zhao Weiguo, prompting it to default on a number of bond payments in late 2020 end face bankruptcy.