16 per cent increase from last year's $5.2bn

Sony will pay Taiwanese manufacturers more than $6bn to make its products this year, local media in Taiwan reported yesterday, without naming sources. The figure represents a 16 per cent increase from last year's $5.2bn.

Products outsourced to Taiwan will include LCD TVs, according to the government-funded Taiwan Economic News.

Without additional manufacturing help, Sony will have difficulty meeting demand for five million or more LCD units this year, despite its existing co-production deal with Samsung, the reports claimed.

Sony will also expand its relationship with Samsung, the Asahi Shimbun reported from Japan today. The pair intend to build a second LCD TV plant in South Korea.

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Taiwan's government has set a cap of $100m on the amount local companies can freely invest in China, Taiwanese media reported this week.

Investments exceeding this limit, or involving a variety of 'sensitive' technologies, will be subject to regulatory approval. The move clarifies existing regulations, and adds an additional review hurdle for some investments.

The initiative results from the hostile political relations between Taiwan and China, which sees the island as a renegade province despite its de facto independence.

The regulations will have an immediate impact, the Economic Daily News reported.

Memory chip makers Powerchip Semiconductor and ProMOS Technologies will now need to request a review for technologically sensitive investments they plan to make in Chinese manufacturing.

Despite unfriendly political relations, economic ties between businesses in the two countries are very strong.

Taiwan is the most important source of inbound investment and technological expertise for China, while China provides low-cost manufacturing services that are vital for Taiwanese companies.