Apple Supplier To Reportedly Face Hefty Taiwan Fine Soon For China Chip Investment Despite Pullout

Apple Inc. AAPL supplier Hon Hai Precision Manufacturing Company Limited HNHPF, popularly known as Foxconn, will reportedly soon be fined by Taiwanese authorities for an unauthorized investment in a Chinese chip maker. 

What Happened: Foxconn, a major iPhone maker, on Friday said it would be selling the stake in embattled Chinese chip conglomerate Tsinghua Unigroup after disclosing the investment in July, reported Reuters.

A source told the publication that Taiwan's economy ministry would contact Foxconn on Monday to confirm the equity sale. “Even though the investment was later pulled the fact has already been established that they invested first, and they will be fined.”

See Also: US Needs 10-Year Chip Export Curbs To Grow Lead Over China — Expert Says ‘Short Run’ Strategy May Not Work

The economy minister's office had earlier said if Foxconn breaks the law, it can be fined T$25 million ($837,577).

Foxconn did not immediately respond to Benzinga’s request for comment.

Following the announcement, Taiwan said it would fine Foxconn for the unauthorized investment, as all outbound investments need to be approved by the Taiwanese administration and it had not approved the deal. 

In a bid to save its crown jewel amid China’s ambition to boost its semiconductor industry, Taiwan has tightened its legislation to prevent the stealing of its chip technology. 

The island nation also bars companies from building their most advanced chip foundries in Beijing to ensure they do not site their best technology offshore.

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