TAIPEI, Nov 2 (Reuters) - Taiwan and China should cooperate in the semiconductor sector, Taiwan chip designer MediaTek Inc said on Monday, in response to media reports that said China's state-backed tech conglomerate Tsinghua Unigroup Ltd was interested in the firm.

Taiwan's government heavily regulates investments related to China and the island's semiconductor industry, which is a mainstay for the economy and one of the world's largest.

China is trying to develop its own fledgling chip industry and on Friday, Tsinghua Unigroup said it was buying a 25 percent stake in Powertech Technology Inc for $600 million.

Taiwan's Commercial Times newspaper quoted Tsinghua Unigroup's Chairman Zhao Weiguo as saying on Sunday his firm would be willing to merge its units Spreadtrum and RDA Microelectronics with MediaTek in order to overtake Qualcomm Inc .

Asked about the media report, MediaTek said in a statement that as long as government policies allowed, it was open to "join hands and raise the status and competitiveness of the Chinese and Taiwanese enterprises in the global chip industry".

Unigroup became a force to be reckoned with in the semiconductor industry after it bought Chinese chipmakers RDA Microelectronics and Spreadtrum in deals totalling $1.6 billion last year.

In October, a person familiar with the matter told Reuters that Tsinghua Unigroup had hired as its global executive vice president a Taiwanese chip industry veteran who was instrumental in building up Taiwan's memory chip sector.

(Reporting by J.R. Wu; Editing by Miral Fahmy)