UMC asks for charges in Chinese chip investment case

Taiwanese chip maker UMC has asked prosecutors to speed up their case against the company.

Taiwan's United Microelectronics (UMC), the world's second largest contract chip maker, placed front page statements in two of the island's top daily newspapers Wednesday, asking government prosecutors to speed up their case against the company.

Titled "A request to the Hsinchu District Prosecutors office to move quickly in bringing charges against UMC Chairman Robert Tsao," the statement said Tsao would resign if found in the wrong by Taiwanese courts.

Tsao would be replaced by Jackson Hu, UMC's chief executive officer, according to the statement.

In Taiwan, the chairman is responsible for any company wrongdoing, and normally the first to be questioned and jailed over infractions.

UMC has been in the public spotlight ever since Taiwanese prosecutors searched its offices in mid-February for evidence the chip maker had illegally invested in or transferred technology to Chinese foundry He Jian Technology (Suzhou) Co. Ltd.

Taiwan carefully controls semiconductor investments by its companies in political rival China. The two separated in 1949 amid civil war, and Beijing has threatened to attack the island if it moves towards independence.

UMC has maintained its innocence throughout the investigation.

In the statement, UMC also asked prosecutors to allow Hsu Jian Hwa, chairman of He Jian, to leave the island. The Taiwan national, along with around 20 other Taiwanese employees of He Jian, have been under orders to remain on the island pending the results of the investigation. Many of the workers had returned to Taiwan for an important holiday in mid-February, and were apprehended at that time.

A sticking point to the investigation has been an offer by He Jian to give a 15 percent stake to UMC in return for helping guide its chip operations. Prosecutors cried foul over the proposal, but UMC said it has never crossed the line by actually investing funds or transferring technology to the Chinese company.

Tsao has said it may not be possible under Taiwan law for UMC to take the 15 percent He Jian stake, and has looked into the possibility of having a subsidiary, UMC-Japan, accept the offer instead.

UMC has not yet applied to Taiwanese regulators for the He Jian stake, said Alex Hinnawi, a spokesman for UMC.

"We are waiting for administrative guidance from [the government] on how to file for permission," he said.

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Dan Nystedt

IDG News Service
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