UMC could face penalties if it illegally transferred technology to Chinese company TAIPEI — The chairman of United Microelectronics Corp. (UMC), the world’s second biggest contract chip maker, is slated to meet with Taiwanese investigators this week over allegations his company illegally invested in a Chinese semiconductor firm.“He was asked to go in last week, (and) arranged to postpone until this week” because of a previous business engagement, said Alex Hinnawi, director of corporate communications at UMC, on Monday.The meeting will not be the first time UMC Chairman Robert Tsao has spoken out over allegations his company broke Taiwanese law by investing in and transferring technology to Chinese chip maker He Jian Technology (Suzhou). After prosecutors raided UMC’s headquarters in February looking for evidence, Tsao published an open letter on the front page of several Taiwanese newspapers, admitting to a broad relationship with He Jian, but denying his company had broken any laws. Last month, Taiwanese financial regulators fined UMC NT$3 million (US$95,300) for violating disclosure laws and failing to adequately keep shareholders informed of its assistance in He Jian’s development.The fine was UMC’s first during the current investigation, and the company could face further penalties if it is found to have illegally transferred technology to the Chinese concern.He Jian was established in 2001 by former employees of UMC before Taiwan relaxed a ban on semiconductor investments in China. Taiwan carefully controls chip investments to China over fears of job losses and that its technology could be used to bolster Chinese military prowess. Taiwan and China separated in 1949 amid civil war, and China has threatened to take the island by force if it declares independence.Taiwan Semiconductor Manufacturing Co. (TSMC) last year became the first Taiwanese chip maker to legally begin producing semiconductors in China after a long government approval process. Technology Industry