SHANGHAI- China's market regulator on Friday said it would give conditional approval for the acquisition of German chipmaker Siltronic by Taiwan's GlobalWafers .

The State Administration for Market Regulation said in a statement on its website that, given the deal could restrict competition in the 8-inch wafer market, it wants GlobalWafers to spin off part of its Topsil unit in Denmark.

It also wants the company to continue to supply wafer products to customers in China in accordance with the principles of fairness and non-discrimination, the watchdog said.

(Reporting by Brenda Goh Editing by David Goodman) ((brenda.goh@thomsonreuters.com; +86 (0) 21 2083 0088; Reuters Messaging: brenda.goh.thomsonreuters.com@reuters.net))