The world's largest contract chipmaker Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) plans to invest US$1 billion in China in four years, a company spokesman said yesterday.
TSMC has applied for permission from Taiwanese authorities to build an eight-inch microchip wafer plant in Shanghai, with an eye on the booming mainland market.
"We do not rule out the possibility of allotting more capital to China above the US$1 billion [mark] during the four-year period," the spokesman said. "Of course, the investment plan will not go ahead without a green light from the government," he added.
The company plans to set up a fully-owned subsidiary, TSMC (Shanghai) Corp, to manage the wafer plant planned at Songjiang Science Park in Shanghai, he said.
TSMC is the first Taiwanese chipmaker to sign a deal with Shanghai authorities after Taipei earlier this year conditionally lifted a ban on eight-inch wafer plant investments on the mainland.
Local chipmakers are now permitted to build up to three eight-inch wafer plants in China by the end of 2005, but only if they use phased-out production equipment from Taiwan.
TSMC's Shanghai subsidiary will have a payroll of 1,000 employees and the plant will have a monthly production capacity of 35,000 eight-inch wafers using 0.25-micron technology to provide foundry services to the mainland market.
In the third quarter, TSMC posted NT$3.16 billion (US$90.8 million) in net profit, down sharply from US$9.31 billion in the second quarter, amid a slowdown in the global high-tech industry. TSMC expects the wafer-chip business to bottom out in the following two quarters.
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