This gives me hope that this long, tiresome saga will soon end. UMC has been affiliated with HeJian for years, but because of long outdated laws in Taiwan, the company had to keep its connection with the company at arm's length. In the end, the Taiwan government probably did more to hurt UMC shareholders and enrich its former chairman, Robert Tsao.

I won't go into the details of the deal, which you can Google. The UMC view is here. But this has been in the works for a long time, since I started covering the issue about six years ago for the EE Times. Under Taiwan's old system, semiconductor manufacturers could only open up or invest in 8-inch fabs in China after they had received government approval. The process was intended to serve as a check on the flow of advanced technology to China, which Taiwan views as a potential military enemy.

But the process was long and cumbersome, and UMC's former chairman doesn't exactly have a reputation for playing by the rules, like his counterpart and rival at TSMC, Morris Chang. So Tsao alledgedly encouraged "former" UMC managers to set-up HeJian in Suzhou, not far from Shanghai. It's a 200mm wafer fab with maximum output of 40,000 wafers.

The relationship between UMC and He Jian was one of Taiwan's worst kept secrets. Ever since He Jian's founding by former UMC employees in 2001, UMC executives had been opaque when asked about their links to the foundry. It wasn't until after Tsao admitted he had provided "management assistance" to HeJian, which then compensated UMC with a 15 percent stake in the company worth $110 million.

Tsao said he offered the assistance, and allowed He Jian to violate UMC patents, because he thought it was in the best long-term interest of the company. He has argued that if UMC didn't move into China quickly, then it risked losing business to start-ups like SMIC.

So how did Tsao benefit from this? He's a wiley character, and a smart investor. Many believe he took a stake in HeJian, knowing that it would eventually be sold on to his company.