Wed, May 15, 2002 - Page 17 News List

China chip plans stalledas government wrangles

By Dan Nystedt  /  STAFF REPORTER

Taiwanese chipmakers planning to invest in China may have to wait longer than anticipated amid government policy-making disagreements, officials said yesterday.

"Government bureaucrats need more time to negotiate -- that's why there will be a delay," an official from the Cabinet said under condition of anonymity.

Members of the task force charged with forming chip-investment rules said their final policy recommendations were sent to the Executive Yuan on March 22, and that it appears progress is currently stalled at the Investment Commission under the Ministry of Economic Affairs.

Officials at the commission were not available for comment yesterday.

Companies such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and United Microelectronics Corp (UMC, 聯電), Taiwan's two largest chipmakers, have waited months for details of a cross-strait investment policy announced by Premier Yu Shyi-kun in late March. At the time, Yu said the final policy would be completed by May 10 and then sent to the legislature for final review and approval.

Officials from three government agencies contacted by the Taipei Times yesterday were not able to offer a new timeline.

The premier's self-imposed deadline helped placate business leaders who argued they should be allowed to invest in China, the fastest growing market for semiconductors in the world. They also fear Chinese competitors could outgrow them by taking advantage of the market for mobile-phone chips and other electronics items.

Analysts were not too upset by the delay.

"This is a big issue for chipmakers, so I don't think the government will drag its feet," said Henry Wang (王漢寧), electronics industry analyst at Entrust Securities Co (永昌證券) in Taipei.

TSMC spokesman Tzeng Jinnhaw (曾晉皓) said timing was less important than the government's commitment to making a move.

"It's just a matter of time," he said.

Chipmakers are already aware of a number of hurdles they will have to pass before applying to invest in China, including the construction of a state-of-the-art 12-inch semiconductor wafer fabrication plant in Taiwan. Tzeng said it would still take some time for TSMC to complete this step.

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