Taiwan Rejects China’s Spreadtrum Local Office Application

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Taiwan rejected Spreadtrum Communications Inc.’s application to open a local office, citing a ban on Chinese chip research and concern the company could poach staff.

“Taiwan law doesn’t allow mainland chip design houses to conduct R&D here,” said Emile Chang, executive secretary of the economic ministry’s investment commission. Without a clear investment plan, the commission is also concerned the office would be used as a staging post to poach local talent, he said.

Tsinghua Unigroup Ltd., a unit of China’s Tsinghua University, bought Spreadtrum in 2013 as part of the government’s plan to develop the country’s chip industry. Spreadtrum competes with Taiwan-based MediaTek Inc. in the market for smartphone chips.

Tsinghua submitted its application for a Spreadtrum Taiwan office in June with a plan to invest about NT$5 million ($155,000), Chang said Thursday. Taiwan limits investment from China into specific industries including semiconductors, flat-panels and telecommunications.

Kathy Zhou, a spokeswoman for Spreadtrum, declined to comment on Taiwan’s decision when contacted by phone.

Spreadtrum setting up an office for marketing and sales would be allowable under Taiwan law, Chang said.