Taiwan's government plans to raise the cap on China-based firms investing in Taiwan's LED industry. Some Taiwan-based LED firms welcome the opportunity to work with China-based peers while some have expressed concerns and view China-based firms as competitors.
Robert Yeh, chairman of Taiwan-based LED packaging house Everlight, noted that Taiwan-based firms should not welcome investments from China and they should keep core technologies at home in Taiwan. Biing-Jye Lee, chairman of LED chipmaker Epistar, added that cross-strait cooperation can be in the form of joint venture and Epistar has not been considering enlisting China-based investors.
On the other hand, Formosa Epitaxy chairman Frank Chien, holds a different view and believes by having China-based investments, job opportunities will be created in Taiwan.
LED chipmakers in China have strong government support, which allows them to compete for orders with low price. In addition, many engineers from Taiwan have been lured to China-based firms due to higher pay. If China-based firms invest in Taiwan's LED supply chain, the latter may lose more than just workers.
The purpose of China-based investments may be more than obtaining shares, and the investors may hope to become a member of the board of directors. Taiwan-based LED firms may lose technology and control over company operations.
The pros and cons of investments from China should not carefully evaluated and one of the core questions that need to be answered is whether such cooperation will provide long-term benefits or just short-term happiness.
