Taiwan to let chip, panel makers invest in China

TAIPEI, Sept 29 (Reuters) - Taiwan will allow contract chip makers and flat-panel firms to acquire rivals in China, an economic ministry official said on Tuesday.

The official confirmed an Economic Daily report quoting Economics Minister Shih Yen-shiang as saying panel makers and chip companies using advanced 0.13 micron process technology would be able to directly invest in China and buy stakes in mainland rivals.

"This is the direction we're taking, but we don't have a timetable yet," the official told Reuters by telephone.

"We will let China choose us rather than South Korea," the paper quoted Shih as saying, referring to the competition between Taiwan and South Korean makers.

Taiwan firms, including AU Optronics (2409.TW), TSMC (2330.TW) and UMC (2303.TW), have urged the government to allow them to invest in mainland China or use more advanced technologies there to help them cut costs and compete with global rivals.

(Reporting by Faith Hung; Editing by Jonathan Hopfner)