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Taiwan should open tech sector to Chinese investors, chairman says

MediaTek Chairman Tsai Ming-kai, right, appears at an event advocating careers in technology.

HSINCHU, Taiwan -- When it comes to recruiting talent and accepting overseas capital, Taiwan should not exclude China, the top executive of MediaTek stressed on Wednesday. 

     MediaTek is the No. 1 provider of smartphone chips to China. Chairman and chief executive Tsai Ming-kai's recommendation for greater openness comes as Taiwan's tech sector faces growing price pressure from mainland rivals. Slowing global demand for electronics, including smartphones, is making it even harder to cope.

     "We definitely should welcome both capital and talent from China," Tsai told reporters, indicating he supports allowing Chinese investment in Taiwanese chip designers.

     Taiwan's government bans such investments. Some leading academics and opposition politicians have voiced concerns that if the ban were lifted, China could gain control of the island's advanced chip industry -- the world's second-largest by revenue, after that of the U.S. 

     "Taiwan became one of the most successful economic stories in Asia in the past because we were very open to opportunities from everywhere, decades ago," Tsai said. "If Taiwan's tech industry wants to expand further globally, we have to accept input from overseas, creating a more business-friendly environment."

     MediaTek has been lobbying Taiwan's outgoing ruling party -- the Beijing-friendly Nationalist Party, or Kuomintang -- to permit Chinese investment in the chip design business. President-elect Tsai Ing-wen, of the Democratic Progressive Party, has said there are national security issues to consider.

     For 2015, MediaTek generated revenue of 213.25 billion New Taiwan dollars ($6.32 billion), virtually unchanged from the previous year. But the company has seen its margins deteriorate due to fierce competition from Spreadtrum Communications, the chip design unit of China's state-backed Tsinghua Unigroup.

     Tsai said emerging markets will be the main drivers of growth in the smartphone segment this year.

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