For starters, Bloomberg reported Semiconductor Manufacturing International Corp founder Richard Chang's getting fined US$158,000 for breaking the island's rules on cross-strait investment. Taiwan's Ministry of Economic Affairs said Chang, who earned his industrial spurs in Hsinchu Science Park, never got government permission to invest in SMIC, the Mainland's largest and most advanced foundry.
Chang was also ordered to retract his mainland investment within six months. Already concerned that much of its computer industry has moved across the Taiwan Strait, Taipei fears the island's mighty chip industry will be next.
The Chen Shui-bian administration, which had threatened to take economic measures in response to Beijing's promulgation of an anti-secession law, also put a stop order on United Micro Electronics Corp's bid for 15% US$110m stake in Zhejiang-based chipmaker He Jian Technology (Suzhou) Co. UMC is Taiwan's second largest foundry after Taiwan Semiconductor Manufacturing Co (TSMC), the world's No 1 foundry, or contract chip manufacturer
UMC had been seeking approval from Taipei to make the investment in He Jian – which was set up by ex UMC staff – after Taiwan officials began investigating whether UMC had compromised shareholder interests when it transferred funds and technology to the chipmaker.
SMIC was getting it from all sides, the Associated Press reporting that US finance authorities had declined to approve a US$769m loan SMIC reportedly needed to buy chip-making equipment from US suppliers. The loan was withheld after protests by US memory-chip vendor Micron Technology. News like that it did not need, having chalked up a US$11.2m fourth quarter loss (versus a year-earlier gain of US$39.3m net income).