BEIJING, Aug. 26 -- The founder and CEO of Shanghai-based Semiconductor Manufacturing International Corp (SMIC) has applied to give up his "citizenship" of Taiwan after doing business in the Chinese mainland left him facing sanctions from the island's authorities.

Rechard Zhang

    The Economic Daily News reported that Richard Chang applied to renounce his "citizenship" last month at Taiwan's "Ministry of Foreign Affairs" (MOFA).

    While not addressing the matter directly, Chang said in a statement yesterday: "Some Taiwanese authorities have been restricting and persecuting us for our development on the mainland, and I feel quite a bit of disappointment about that.

    "I am a US citizen but grew up in Taiwan. I was educated and served in the army in Taiwan, for which I have a deep affection."

    "MOFA" said in March that Chang illegally invested in SMIC in 2000, a move forbidden by Taiwanese authorities. He was fined NT$5 million (US$150,000) and was required to withdraw his investment in SMIC.

    The "MOFA" has given Chang six months to withdraw his investment. If Chang does not end his investment, "MOFA" says it will continue to punish him until he does. Chang is fighting the case.

    "Taiwan is trying to fine our CEO NT$5 million (US$150,000) for alleged improper investment in SMIC," Jimmy Lai, SMIC spokesman, was quoted as saying by the IDG News Service in response to questions about why Chang is seeking to give up his link to the island.

    Chang also said he hoped Taiwan authorities would create a fair environment for competition.

    "I welcome my Taiwan counterparts to come to the mainland and develop the semiconductor industry," Chang said. "If the policy of the Taiwan local administration allows, I am willing to be the strategic partner for my Taiwanese counterparts."

    Wu Xianfeng, a semiconductor analyst with Guotai Jun'an Securities, said the fine was insignificant to Chang, but he had reacted strongly because he thought the trouble created by the Taiwanese authorities was unreasonable.

    "The investment trend from Taiwan in the mainland's high-tech sector cannot be blocked," said Wu.

    Wu said the spat with the Taiwan authorities would not impact on SMIC's business.

    Taiwan has extremely strict control over its investments in the mainland's high-tech industry.

    In April, Taipei fined United Microelectronics Corp Chairman Robert Tsao NT$3 million (US$90,000) for allegedly failing to tell investors about advice some executives gave a mainland chip maker.

    In February, Hsu Chien-hua, who heads China-based He Jian Technology, was fined for investing in the Chinese mainland without government approval.

    (Source: China Daily)