Asian venture capital company Pacific Venture Partners on Tuesday said it sees fabless semiconductor companies and the clean energy sector as good investments, although high spending in some solar energy firms might be a deterrent.
Pacific Venture, which manages a fund of $800 million, was also betting on technology sectors that would benefit from closer Taiwan and China ties, Partner Ben Yang told reporters on the sidelines of a private equity and venture capital forum.
We are interested in fabless companies and we believe there will still be cross-border fabless investment opportunities, Yang said. We can restructure a couple of private companies across the strait and make them more competitive than before.
Taiwan has forged closer trade ties with China since President Ma Ying-jeou took office in May 2008 and opened up the island's tourism and transportation sectors to more Chinese investments.
Pacific Venture, which puts 80 percent of its funds into technology companies in greater China, is now monitoring closely how the Taiwan government handles the United Microelectronics Corp and its investment in China's HeJian Technology.
The UMC case can serve as a very good landmark to see how far the Taiwan government will go, Yang said. If in the next six months we see a very satisfactory result, then we think the government is very open-minded about cross strait policy.
Several years ago, UMC came under fire from the Taiwan government for investing in HeJian as it did not comply with regulations.
In June, shareholders approved a plan to purchase a remaining 85 percent stake in HeJian, but the acquisition remains subject to approval by the Taiwan government.
Pacific Venture, which has offices in Taipei, Shanghai and Suzhou, has been investing mainly in technology companies since it was set up in 1990.
Some of its investments include Chinese solar energy Suntech Power Holdings, top contract chipmaker Taiwan Semiconductor Manufacturing Co Ltd and Taiwanese chip designer Mediatek.
The company plans to invest in more companies in Taiwan's fast-growing solar energy sector, an area that major Taiwanese companies such as TSMC hopes to develop in coming years.
It is relatively challenging for China companies to go into thin-film, so I think there is a good chance for Taiwan's thin-film companies to move forward, Yang said.
But this is a high capex investment, so I'm not so sure it's ideal for VCs (venture capital companies) in the early stage.
(Reporting by Lee Chyen Yee and Rachel Lee)