Chip equipment gets tax break
Taiwan has passed a law extending the exemption on equipment used to make chips and flat- panel displays from import tariffs, the Commercial Times said, citing unidentified government officials.
The exemption will save Nanya Technology Corp (南亞科技), AU Optronics Corp (友達光電), Chunghwa Picture Tubes Ltd (中華映管) and Quanta Display Inc (廣輝電子) an estimated NT$10 billion (US$289 million) in a one-year period, the newspaper said.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) , United Microelectronics Corp (UMC, 聯電)and other companies based in Taiwan's state- run industrial parks already enjoy the exemption, which will now be available to companies outside the parks, the report said.
Approval near for TSMC
TSMC is about to receive approval from the government to invest in China for the first time, the Commercial Times reported, citing Vice Premier Lin Hsin-yi (林信義) .
Taiwan has no choice but to allow its chipmakers, which account for about a fifth of the world's production, to invest in what will become one of the world's largest semiconductor-making nations, the report said, citing Lin.
A China rival, Semiconductor Manufacturing International Corp (SMIC, 中芯國際集成電路) of Shanghai, has started production of chips that sell for about half the price charged by Taiwan makers, the report said.
Taiwan has restricted chip investments in China on concern the mainland would pirate its technology.
Overseas investor rules eased
Taiwan has eased rules to allow smaller capitalized overseas funds managed by philanthropic and educational organizations to invest in local stocks, the Commercial Times said, citing unidentified stock exchange officials.
Foreign investment in Taiwan stocks could double following the change in rules, the report said.
The minimum capital requirement for fund investment will be halved to US$100 million, the report said.
Overseas investors own about 17 percent of the island's stocks by market value. The TAIEX, which yesterday closed at 4701.08, has lost about a fifth of its value the past 12 months.
Tax break for manufacturing
Taiwan will grant a five-year tax break for manufacturing investments in a bid to attract some NT$120 billion Taiwan dollars (US$3.47 billion) to the sector, an official said yesterday.
The economic ministry would soon work out regulations on the tax exemption package which was approved by parliament Tuesday dating back to January 1, 2002, the official said.
"The new incentive will cover the entire manufacturing industry, including non-high tech businesses, while currently only high-tech companies are eligible to the preferential treatment," the official said.
Under the package, only manufacturing investments made in 2002 and 2003 can enjoy the tax breaks.
Investors would also be granted a tariff-free status for production facility imports, he said.
"We expect the package to create 52,000 jobs and generate an additional NT$150 billion in output for the manufacturing industry," the official said.
Taiwan has been seeking ways to check high unemployment amid an economic slowdown, aiming to cut the jobless rate to 4.5 percent by the end of this year.
NT dollar falls
The NT dollar fell against the US dollar on the Taipei Foreign Exchange yesterday, dropping NT$0.043 to close at NT$34.642.
A total of US$518 million changed hands.
Agencies
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