Fri, May 24, 2002 - Page 17 News List

TSMC moves to protect intellectual property in China

By Dan Nystedt  /  STAFF REPORTER

Taiwan Semiconductor Manufac-turing Co (TSMC, 台積電), the world's largest contract chipmaker, has been filing patents in China for the past year amid plans to begin operating there, the company said yesterday.

The company holds around 3,000 semiconductor-related patents and believes it's time to begin making preparations for entering the Chnia market.

"We are trying to register our IP in China because the market is getting more and more important," said Guo Shan-shan (郭珊珊), public relations manager at TSMC.

The company denied a Chinese-language media report alleging that TSMC fears similar patents could be filed by competitors in China.

Former TSMC employees have already passed some of the company's trade secrets to upstart chipmakers in Shanghai.

Last January, the company filed an official complaint which was eventually taken up by the Hsinchu District Prosecutor's Office. Liu Yun-chien (劉芸茜), a former manager at TSMC, allegedly sent 11 e-mail messages containing protected chip information to an official at Semiconductor Manufacturing International Corp (SMIC, 中芯國際集成電路) in Shanghai between November 2000 and January last year.

Liu then resigned from TSMC and was hired as a senior consultant at SMIC a month later. SMIC is the first Chinese company to compete with TSMC. The head of SMIC, Richard Chang (張汝京), used to head a company that later merged with TSMC.

SMIC denied any wrongdoing.

A number of former TSMC employees have moved to China to work in the country's fledgling chip sector.

Now that the government has cleared the way for chipmakers to invest in China, TSMC has said it hopes to make moves across the Taiwan Strait by next year.

Chip manufacturers have to ramp up production on state-of-the-art 12-inch wafer production plants before they can apply to the government for permission to set up a plant in China. TSMC believes it will pass this hurdle by the end of the year.

Local media also reported that the utilization rate at TSMC, which measures the percentage of production lines actually running, is likely to hit between 85 and 90 percent in the third quarter.

By phasing out some older equipment, the average utilization rate increased from 67 percent in the first quarter to 80 percent in the second.

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