* Planned stake sale worth $373 mln was unveiled a year ago
* Share scrapping is 2nd of 3 Unigroup deals to fail in
* Came as new government less friendly to China took power
* Fate of Powertech's deal with Unigroup unclear
(Adds comments from ChipMOS executives, more deal details)
By J.R. Wu
TAIPEI, Nov 30 Taiwan's ChipMOS Technologies
said it scrapped a planned $373 million stake sale to
China's Tsinghua Unigroup due to uncertainty about Taiwanese
regulatory clearance, the second deal in eight months involving
Unigroup and a firm in the island to fall through.
Instead, the chip test and packaging company will sell a
54.98 percent stake in its Shanghai operations to the Chinese
conglomerate and related strategic investors for 498 million
yuan ($72.36 million) to expand its production and business in
China, ChipMOS said on Wednesday.
The share sale, announced a year ago, was spiked due to
political considerations, industry analysts said, as it was put
under intense scrutiny when the independence-leaning Democratic
Progressive Party (DPP) came to power this year. The DPP is
traditionally less friendly toward China.
Shortly after Taiwan President and DPP leader Tsai Ing-wen
took office in May, China cut off official communication with
Taipei because she has refused to accept China's view that the
self-ruled island is a part of China, and ties between the two
sides since she won the presidential election in January have
China deems Taiwan a wayward province to be taken back by
force if necessary. Taiwan has protected its prized chip
industry from becoming too reliant and open to China.
Tsinghua Unigroup's investment plans were going to have to
go through unprecedented parliamentary review in Taiwan, but had
not yet been put on lawmakers' agenda.
ChipMOS executives said their efforts to communicate with
regulators to get the deal through were unsuccessful due to the
overall environment, without providing specifics, and that
revising the deal was imperative for ChipMOS' future.
"For the back-end testing and packaging, China has the best
potential customers," ChipMOS chairman S.J. Cheng told reporters
at a news briefing. "For our company's operations and long-term
development, going to China to set up and expand production and
capture orders is a sure trend, otherwise you will be
He said the new deal terms - in which a ChipMOS unit that
wholly-owns ChipMOS Technologies (Shanghai) Ltd is selling its
stake to Tsinghua Unigroup - will need to be approved by
Taiwanese investment authorities.
The termination of the original share sale that would have
given Tsinghua Unigroup a quarter stake in the parent ChipMOS
comes after a similar deal that was announced last year with
Siliconware Precision Industries Co (SPIL), and due to
shareholder opposition, was subsequently abandoned.
A quarter stake purchase in Powertech Technology Inc
, another Taiwanese chip tester and packager, is still
pending with regulators after being first announced in October
Unigroup Guoxin Co Ltd, the Tsinghua Unigroup
entity involved in the Taiwanese deals, said Wednesday the deal
with ChipMOS was terminated, after warning last week that the
tie-ups it struck with ChipMOS and Powertech could fall through
due to prolonged regulatory review in Taiwan.
($1 = 31.8630 Taiwan dollars)
($1 = 6.8821 Chinese yuan renminbi)
(Reporting by J.R. Wu; Editing by Muralikumar Anantharaman)