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Updated Wednesday, September 30, 2009 10:36 am TWN, By Weiyi Lim, Bloomberg

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LCD, chipmakers may open to China

TAIPEI, Taiwan -- Taiwan is considering allowing Chinese investors to buy stakes in its flat panel and chip companies, Hsien-lin Huang, an official at the island's Ministry of Economic Affairs, said.

Taiwan is also evaluating a plan to let local liquid- crystal display and semiconductor companies set up plants in China and buy stakes in mainland businesses, Huang said in a phone interview today.

“In view of the global trend and competition, we are mulling ties with China in our flat panel and semiconductor companies,” said Huang, declining to give a time frame on when a decision will be made.

Taiwan will discuss the possibility of letting Chinese investors take stakes in flat-panel and semiconductor companies by the end of the year, the Commercial Times said today, citing Economics Affairs Minister Shih Yen-shiang.

On Sept. 16, Shih said the government will review plans to further ease curbs on Chinese investments to the island. Taiwan said in June it will allow investments from mainland China in 100 industries and projects, excluding the semiconductor, liquid-crystal display and telecommunications industries.

Building Plants

Samsung Electronics Co., LG Display Co. and Sharp Corp. have said they're planning or considering building plants in China. Taiwan companies including Hon Hai Precision Industry Co. and Quanta Computer Inc. manufacture computers on the mainland.

AU Optronics Corp., Taiwan's largest liquid-crystal display maker, said Sept 3. it held talks with local governments in China about building factories in the country.

United Microelectronics Corp., the world's second-largest contract manufacturer of chips, said April 29 it plans to buy the 85 percent stake in He Jian Technology (Suzhou) Co. it doesn't already own for as much as $285 million. The deal must get Taiwan regulatory approval.

AU Optronics gained 2.4 percent on the Taiwan Stock Exchange as of 10:04 a.m., while United Micro advanced 3.6 percent and bigger rival Taiwan Semiconductor Manufacturing Co. jumped 3.3 percent. The benchmark Taiex index added 1.5 percent. Relations between China and Taiwan have warmed after Taiwan President Ma Ying-jeou took office in May last year and abandoned his predecessor's pro-independence stance. The island's benchmark stock index has gained 61 percent this year on optimism that closer ties will bolster economic growth.

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