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May 27, 2017

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ChipMOS halts mainland-China investment drive

TAIPEI, Taiwan -- ChipMOS Technologies, a Taiwan-based provider of semiconductor testing and packaging solutions, announced Wednesday it has terminated a plan to solicit investment from China's Tsinghua Unigroup.

ChipMOS's shareholders in January approved a private placement plan that would allow Tsinghua Unigroup to take up a stake in the semiconductor-back-end firm, but 10 months on the Taiwan government's Investment Commission have yet to give the deal regulatory approval.

The Investment Commission under the Ministry of Economic Affairs said it would stop reviewing the ChipMOS application now that the company has withdrawn the case.

The ChipMOS case marks a major setback for Tsinghua Unigroup's expansion ambitions. The China firm has also proposed investing in another Taiwan-based semiconductor testing and packaging company, Powertech Technology Inc. (PTI), but the Investment Commission is still reviewing the case.

Tsinghua Unigroup was also looking to take a stake in yet another Taiwan-based semiconductor testing and packaging firm, Siliconware Precision Industries (SPIL) earlier this year. But SPIL has instead received regulatory approval for its merger with Taiwan-based Advanced Semiconductor Engineering, the world's biggest IC testing and packaging service provider.

Taiwan imposes certain restrictions on its semiconductor industry, which is an economic backbone of the country.

ChipMOS said it is now looking to form a partnership with Tsinghua Unigroup by having Tsinghua invest in ChipMOS Shanghai, the Taiwan firm's subsidiary in China. The plan will also see the Taiwan-based parent company increase its investment in the subsidiary.

But the Investment Commission said as ChipMOS is planning to increase its investment in the China subsidiary by more than US$50 million, it will have to submit an application to the Investment Commission according to the cross-strait investment regulations.

Investment Commission Executive Secretary Emile Chang said the impact of Tsinghua Unigroup's investment in ChipMOS's subsidiary will be much smaller than its direct investment in the Taiwan-based parent company.

Chang said the Investment Commission does not have to present a report in parliament on such an investment case, but the case still needs to be reviewed by the Industrial Development Bureau. Chang declined to speculate whether the deal will be approved.

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