TAIPEI Taiwan's government has opened an investigation into four companies named in a media report as conducting business with firms linked to U.S.-sanctioned Huawei in China, and is considering tighter rules on key technologies.

Taiwan Economy Minister Wang Mei-hua said the ministry would be looking into whether the firms' activities in China "matched up" with their initial investment approval from the island's government.

"If not, then the highest permitted fine is up to T$25 million ($775,300)," she said.

Wang did not give details on what rules the companies might have broken. She said earlier this week they had been engaged in low-end work like handling waste water.

A Bloomberg news report this week said the firms had been working with Huawei-connected firms to build infrastructure for chip plants.

The companies - Topco Scientific, L&K Engineering, United Integrated Services and Cica-Huntek Chemical Technology Taiwan - have all denied any wrongdoing.

Huawei did not immediately respond to a request for comment. China is in the middle of its long National Day holiday.

Wang also said Taiwan's government will soon unveil tighter rules on "key technologies", taking into account international practice, she added, without giving details.

The Chinese telecommunications giant has, for the last four years, been barred from obtaining components and technology from U.S. firms without approval.

While many Taiwanese tech companies, including chipmaker TSMC, have operations in China, Taiwan's government bans production of the most sensitive technology in the country and keeps a close watch on all its companies' tech investment there.

China claims Taiwan as its own territory and has in recent years increased its military activities around the island.

($1 = 32.2470 Taiwan dollars)

(Reporting by Ben Blanchard; Editing by Edwina Gibbs)