China targets Taiwan's chip secrets with $24 billion acquisition plot, ET Manufacturing
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The Ministry of Economic Affairs (MOEA) announced on Wednesday that it will conduct a "thorough examination" of any proposed acquisition of the Taiwanese tech firm Source Photonics Co, Ltd, amid growing concerns about a Chinese company's interest in purchasing the Hsinchu-based firm, as reported by Focus Taiwan.According to Focus Taiwan, Suzhou Dongshan Precision Manufacturing Co., Ltd. (DSBJ), the largest printed circuit board manufacturer in China, has expressed intentions to acquire Source Photonics for RMB5.9 billion (approximately NT$24 billion). As per Focus Taiwan, this acquisition would trigger a change in ownership structure that falls under national security scrutiny.The MOEA confirmed on Wednesday that it has not yet received a formal application from Source Photonics concerning the rumoured buyout but has already informed the company that any such deal would be subject to regulatory review, Focus Taiwan noted.Under Taiwanese regulations governing Chinese investments, prior approval from the MOEA is mandatory for any ownership changes involving Chinese capital, the ministry reiterated. According to Focus Taiwan, the MOEA has been closely monitoring the company's operations and last month issued a formal letter requesting updated details about its shareholding structure.As reported by Focus Taiwan, once an application is submitted, the MOEA plans to coordinate with the National Security Bureau (NSB), the Mainland Affairs Council (MAC), and relevant industrial technology bodies to determine whether the deal poses national security risks or could negatively impact Taiwan's industrial development. If such risks are identified, the investment permit may be revoked in accordance with current laws.Democratic Progressive Party (DPP) legislator Hsu Chih-chieh raised alarms over the potential transfer of sensitive technology, noting that Source Photonics holds advanced 3-nanometer chip technology . He urged the government to act with caution and proposed the development of a national list of critical technologies to safeguard against Chinese acquisitions, an issue highlighted in Focus Taiwan's coverage.Focus Taiwan further reported that the MOEA has been tracking the situation since 2016, when Source Photonics' top shareholders were first categorised as Chinese capital.
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