Taiwanese Chip, Panel Makers To Invest In China

TAIPEI, Taiwan (AP) -- Taiwan plans to allow its flat panel makers and chip companies to invest in China to help them secure the mainland market, the economics minister has said.

With a huge television market, China has been anxious to look for a foreign partner to help it make flat panels and develop related technologies, Shih Yen-shiang told the Economic Daily News in an interview.

Taiwanese makers may lose the mainland market to their rivals if the island continues to ban flat panel investments in China, he said.

"We wouldn't let the mainland dump us to buy from South Korea," Shih was quoted as saying Tuesday.

Economic Ministry officials confirmed the newspaper report.

Authorities may also allow Taiwanese chipmakers to invest in China or buy stakes in companies there using the more advanced 0.13 micron process technology, Shih said.

Taiwan has long banned investment in flat panel and advanced chipmaking in China, for fear the island would lose its cutting-edge technologies to its political rival.

But under President Ma Ying-jeou's program to engage China, Taiwan has removed barriers on bilateral investment in recent months.

In June, Taiwan opened up 100 categories of local business, including computer components and cell phones, for Chinese investment.

Shih said authorities may also allow Chinese firms to buy stakes in Taiwanese flat panel and chip makers when they review the current liberalization measures later this year.

The two sides split amid civil war in 1949, and China continues to claim Taiwan as part of its territory.

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