Taiwanese chip assembler also weighing a possible $5.5 billion buyout deal Taiwanese chip assembler Advanced Semiconductor Engineering (ASE) plans to invest $60 million in a low-end chip assembly company based in China.ASE’s board of directors approved a plan to invest in Global Advanced Packaging Technology, a Shanghai company, ASE said Thursday. ASE will need approval from Taiwanese regulators to move forward on the investment due to strict regulations meant to keep Taiwanese technology from ending up in missiles and other military hardware aimed at the island by rival China.Taiwan and China remain enemies after splitting in 1949 amid civil war. Despite the strained relationship and tough investment rules, China remains by far the favored destination for Taiwanese investment due to their shared language and culture, and China’s lower costs and huge potential market. Currently, ASE has no chip assembly investments in China, despite the fact that earlier this year Taipei gave a green light to chip makers to invest in low-end chip assembly. Although the government announced it would allow such investments, not a single application has been approved by Taipei, and companies remain unsure of how to apply to regulators. Analysts say that the approval process remains very much subject to politics in Taiwan, due mainly to the rivalry with China.In related news, ASE said it will form a special committee to evaluate a possible $5.5 billion deal to be bought out by a consortium led by The Carlyle Group. So far, ASE has only received an indication of interest from Carlyle, not a formal offer.The deal could transform ASE into a U.S. company, where Carlyle is based, thereby allowing ASE to invest in China without asking Taipei for permission. China’s growing electronics industry requires chips, and chip assembly factories nearby can help ensure quick placement inside gadgets. Carlyle’s interest in ASE is also a sign of the times. There have been a string of private equity deals in the chip industry recently. A few months ago, Carlyle was part of a team that sealed a deal to buy Freescale Semiconductor for $17.6 billion, while Koninklijke Philips Electronics sold a majority in its chip unit to another group for around $10.6 billion. Technology Industry