(Yicai Global) March 26 -- China's Anti-Monopoly Bureau has lifted restrictions that prevented Advance Semiconductor Engineering and Siliconware Precision Industries from working too closely together in the semiconductor sector.

Taiwan-based ASE Technology Holding, a joint venture between the two firms and leading semiconductor assembler in China, is now free of conditions that restricted the ways in which its founding companies worked together, the subsidiary said in a statement yesterday.

The freedom will allow the two parent firms to better cooperate and improve the unit's operational efficiency and research capabilities, according to the statement. ASE and SPIL announced they would set up ASEH in 2016 and the bureau conditionally approved the deal in November the following year, requiring the parent companies to operate independently in human resources, pricing, sales, capacity and procurement for a specified period of time.

The expiration of those conditions comes at an awkward time, with the semiconductor sector more than likely to shrink worldwide this year because of Covid-19, according to International Data Corp. It had originally predicted growth of 2 percent and still believes there is a 20 percent chance of a quick rebound as the pandemic eases.

With a 22 percent market share, ASE was the world's largest semiconductor assembler and tester in the third quarter of last year, with SPIL ranking fourth at 12.7 percent, according to data from market researcher TrendForce.

Assembling and testing semiconductors is the most mature of the three stages of development in China, ahead of design and manufacturing. The three biggest players on the Chinese mainland, Jiangsu Changjiang Electronics Technology, Tongfu Microeletronics and Tianshui Huatian Technology, were all the result of mergers or similar deals and rank among the top 10 firms in the sector worldwide, but still lag far behind ASE.

Changjiang Electronics ranked third last year with a 16.8 percent market share, Tongfu had 5.9 percent and Tianshui Huatian had just 5.4 percent.

Editor: James Boynton