Wed, Mar 06, 2002 - Page 17 News List

Great chip debate gets even hotter

SEMICONDUCTORS A demonstration organized by the Taiwan Association of University Professors and Taiwanese Engineers' Association will protest chipmakers' plans in China

By Lin Mei-chun  /  STAFF REPORTER

Pro-Taiwan political groups and some non-governmental organizations yesterday spelled out their opposition to 8-inch chipmakers' plans to build plants in China.

With the slogan of "keeping industries' roots in Taiwan," they said that the relaxation of the ban would cripple Taiwan's economy, exacerbate unemployment, and cause the nation to lose its international competitiveness by giving away state-of-the-art technology to its rival across the Taiwan Strait.

The demonstration, organized by the Taiwan Association of University Professors (台教會) and Taiwanese Engineers' Association (台灣工程師協會), will be held on Saturday. The Taiwan Solidarity Union (TSU) and pro-independence groups will join the protest.

The government has said it will decide by the end of March on whether to allow companies suach as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電) -- the world largest and second-largest contract chipmakers -- to set up shop in China.

With only a few weeks to go before a final decision is made, the debate continues to gain in intensity.

"Although Taiwanese companies have led the chip industry by setting up advanced 12-inch chipmaking facilities, 8-inch plants remain the mainstream of the nation's semiconductor industry," TSU chairman Huang Chu-wen (黃主文) said. "Allowing chipmakers to set up factories in China would have a serious impact on the sector here."

Questioning the government's resolve to "manage investments in China," Huang said "China is our competitor," adding that the exodus of capital and talent to China would be detrimental to domestic industrial development.

But according to TSMC Chairman Morris Chang (張忠謀), some companies based in Taiwan must go to China to survive.

"The chip industry hopes the government opens up and at least lets us get started in China ... Why? There is only one reason -- the market," Chang said in January.

Representatives from the Taipei Computer Association (台北電腦公會) said the recent focus on 8-inch fabs was misguided, indicating that 12-inch chip factories will be the ticket to continued competitiveness.

Those who think 8-inch wafer technology is the mainstream and refuse to admit that 12-inch wafers are in fact the future trend for semiconductors do not understand the industry, said Frank Huang (黃崇仁), head of the association and chairman of Powerchip Semiconductor Corp (力晶半導體).

Twelve-inch wafer technology is already being used for full-production runs by giants such as US-based Intel Corp, he said.

During a closed-door meeting with TSU lawmakers yesterday, Minister of Economic Affairs Christine Tsung (宗才怡) was the only official to be more open to permitting chipmakers to charge across the Strait, TSU lawmaker Chen Chien-ming (陳建銘) said.

Mainland Affairs Council Chairwoman Tsai Ing-wen (蔡英文), Minister of Finance Lee Yung-san (李庸三), Deputy Governor of Central Bank of China Hsu Yi-hsiung (徐義雄) were rather reserved on the issue, Chen said.

Tsai told the reporters after the meeting that the issue had to be thoroughly considered given its highly sensitive nature.

Chen said Lee told them during the meeting that the government would lose NT$14.2 billion in tax revenue if the chipmakers build plants in China.

But Tsung said that the government may establish measures to ensure that revenue will flow back to Taiwan.

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