China deal with Powertech canceled

January 16, 2017 // By Peter Clarke
Powertech Technology Inc. (Hsinchu, Taiwan) a provider of IC test, assembly and packaging services, has cancelled an agreement to receive a significant investment from China's Tsinghua Unigroup Ltd.

Powertech put out an announcement Friday (January 13) saying it was terminating a deal whereby Tsinghua would have acquired a significant minority shareholding because local regulators had not approved the deal and that a one-year period to get the deal was about to run out.

The original deal whereby Tsinghua would acquire a 25 percent stake in Powertech fro $600 million was announced late in 2015 (see China to take 25% Stake in Taiwan's Powertech ).

Taiwan leads in foundry and in the chip test, assembly and packaging sectors and Tsinghua had been planning to invest in ChipMOS Technologies Inc. and Siliconware Precision Industries Co. as well as Powertech. ChipMOS and Siliconware called off similar share sales in 2015.

The deals are part of a series that Tsinghua has been trying to negotiate seemingly as part of national Chinese strategy to buy its way into positions of prominence in the semiconductor industry. However, many of those deals are coming under close scrutiny or are being rebuffed (see President Obama blocks Chinese bid for Aixtron ).

Taiwan's refusal to provide regulatory approval for the deals are seen as signs of a cooling or relations between Taiwan and China since Taiwan President Tsai Ing-wen and her ruling independence-leaning Democratic Progressive Party (DPP) took power last year.

Related links and articles:

www.pti.tw.com

News articles:

China to take 25% Stake in Taiwan's Powertech

Report: China has $47bn chip fund focused on US M&A

President Obama blocks Chinese bid for Aixtron