The deal will definitely not go through, the report said,
citing a senior Taiwanese government official involved in national security
issues.
Taiwan, the world's largest contract electronics maker, has
become increasingly cautious about China's ambition to boost its semiconductor
sector. It has proposed new laws to prevent what it says is China stealing its
chip technology, amid rising concerns in Taipei that Beijing is stepping up its
economic espionage.
The island's government prohibits companies from building
their most advanced foundries in China to ensure they do not offshore their
best technology.
Taiwan faces mounting pressure from China, which considers
the democratically governed island its own territory.
Taiwan's cabinet commission has yet to formally review the
investments, the FT report on Wednesday quoted an unnamed person who was
briefed on the matter as saying, adding that officials from the National
Security Council and the Mainland Affairs Council believe the deal needs to be
blocked.
Foxconn said in a statement it has submitted reports to
Taiwan authorities about the investment and will continue to talk to government
officials. It did not elaborate.
Tsinghua Unigroup did not immediately respond to a Reuters
request for comment.
It is clear that they have elevated this to the national
security level and the prospects are getting dimmed, the FT report cited one
person close to the company as saying and added that the deal looks more
difficult to pass through with increasing tensions in the Taiwan Strait.
Tensions have escalated in the Taiwan Strait after US House
of Representatives Speaker Nancy Pelosi visited the Chinese-claimed self-ruled
island last week, a move that Beijing condemned as a threat to peace and
stability.
Last month, Foxconn said it was a shareholder in embattled
chip conglomerate Tsinghua Unigroup via a $798 million investment by a
subsidiary. © Reuters
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