Taiwan Candidate Promises Looser Tech Transfer

Frank Hsieh, the candidate of Taiwan's ruling Democratic Progressive Party in next March's presidential election, pledged Tuesday to loosen regulations covering the transfer of Taiwanese technology to China.

Taiwanese companies face various hurdles in moving their operations to China and typically have to receive government approval before making chip investments on the mainland. The two nations separated in 1949 amid civil war, and Beijing has long threatened the use of force to take the island if it moves towards formal independence.

Intel and other non-Taiwanese chip-makers investing in China face fewer administrative barriers.

"The degree of regulation is a problem so in terms of technology transfer I would like to loosen it if I become president and make it as loose as Intel," Hsieh said at a news conference at the Foreign Correspondents' Club of Japan in Tokyo.

The exchange of chip-making technology to China is a hot issue in Taiwan, whose economy is influenced by major semiconductor makers.

In October the founder and former chairman of United Microelectronics Corp. (UMC), the world's second largest contract chip maker, were found not guilty of investing in and transferring technology to a Chinese chip maker. Earlier in the year a Taipei court overturned an NT$5 million (US$154,000) fine against UMC over the same deal with He Jian Technology (Suzhou) Co. Ltd.

Taiwan's presidential election is scheduled to take place on March 22, 2008.