July 27, 2007 – Taiwan’s Ministry of Economic Affairs is appealing a recent ruling from the Taiwan High Administrative Court that overturned a fine imposed on UMC for its involvement with Chinese chipmaker He Jian Technology, according to local reports.

The Taipei high court on July 19 invalidated the US ~$150,000 fine imposed on UMC in Feb. 2006, saying that UMC’s investment in He Jian can’t be classified as an investment since UMC only provided technical assistance, and that the government failed to sufficiently prove otherwise. Top UMC execs also were targeted and eventually stepped down amid the controversy.

The MOEA, however, says it will appeal the ruling, due to “serious concern of the reasoning of the high court in its ruling excluding technological support as an act of investment in China,” which it sees at odds with the government’s practice of examining capital, equipment and materials, and semifinished products as well, note the Taipei Times and Taiwan Economic News.

The MOEA has until August 12 to file its appeal, but it admits that if the Taipei ruling holds up, the Taiwan government will have to overhaul its existing regulations governing cross-strait investments.