Taiwan approved four chip packaging firms' applications to invest nearly US $100 million in China, allowing them to join foreign competitors in tapping the world's fastest growing chip market.
The companies are Advanced Semiconductor Engineering Inc (ASE) Siliconware Walton Advanced Engineering and Greatek Electronics Shih Yen-shiang, a vice minister at the Ministry of Economic Affairs, told reporters after a meeting on Thursday.
The industry has pushed for years for permission to invest in China, where rivals such as Amkor Technology Inc and STATS ChipPAC Ltd already enjoy the mainland's advantages of low-wage labour and proximity to Chinese customers.
But the Taiwan government has been reluctant to let what it sees as strategic industries, including semiconductors, become economically too dependent on a political opponent.
Taiwan's policy-making Mainland Affairs Council said last year it would allow investments in low-end semiconductor packaging and testing and small panels on the mainland.
But local companies must seek government approval and agree to make equal investments at home.
"This is an industry trend and we appreciate the government's support," said Freddy Liu, an ASE spokesman. The government has allowed it to invest $21.6 million in a joint venture with NXP in China.
Investors reacted favourably to the green light, pushing ASE's Taipei-listed shares 1.47 percent higher, outpacing the main TAIEX share index's 0.55 percent gain.