TSMC assures that jobs won't be lost

The local high-tech industry will not lose jobs as a result of Taiwan Semiconductor Manufacturing Co's (TSMC, 台積電) planned chip investment in China, an official at the company said yesterday.

The comments comes after TSU lawmakers protested against the plan in front of the Cabinet yesterday.

In response to claims that jobs would be lost, TSMC spokesman Tzeng Jinnhaw (曾晉皓) said the company plans to create even more jobs in Taiwan.

"We currently have 15,000 employees," Tzeng said. "In the next four or five years the total will probably increase to 20,000."

The government gave a conditional green light to the world's largest made-to-order chipmaker on Wednesday for its eight-inch wafer fabrication plant in China.

TSMC has plans to open at least three new 12-inch wafer fabs in addition to the one it already operates in the Hsinchu Science-based Industrial Park (新竹科學園區).

One of the three, a nearly completed 12-inch fab in the Tainan Science-based Industrial Park (台南科學園區), is waiting for equipment to be installed, Tzeng said. The other two fabs will be part of a second phase of construction, with one located in both the Hsinchu and Tainan science parks. Tzeng expects more 12-inch fabs will follow, but did not provide a timetable.

Tzeng stressed that TSMC's proposed eight-inch wafer fabrication facility in China would only produce chips to supply the mainland market, and was not relevant to its operations in Taiwan.

Supplying China-bound orders from fabs in Taiwan is not an option, said Gordon Chen (陳文咸), president of the Taiwan Semiconductor Industry Association (台灣半導體產業協會). Despite being a member of WTO, China still levies a 17-percent tax on chip imports, and requires a certain amount of locally produced content in electronic devices, Chen said.

Chen gave Wednesday's preliminary approval the thumbs-up.

"It's good progress and we welcome the government's decision," he said.

Investors responded positively to the government's decision, sending TSMC's shares up by NT$2.7, or 5.7 percent, to close at NT$50.5 on the TAIEX yesterday.

The Hsinchu-based association has requested that the government now review other semiconductor industries, including packaging and chip design. If these sectors are not permitted to go, there are plenty of companies from other nations willing to go, Chen said.

"No jobs will be lost because of this new venture," he said. "In fact, our current 12-inch capabilities are insufficient, so more jobs will be created in the future."

A chip industry analyst at research firm Gartner Dataquest agreed.

"There is no risk to the local industry," Ben Lee (李輔邦) of Gartner's Taipei office said. "Once TSMC sets up in China, it has a very good chance of getting new orders there, not replacing orders here in Taiwan."

The technology that the government has approved to go to China was the standard in Taiwan three years ago, and even that is well ahead of China's needs, Lee said. In addition, obsolete equipment that is gathering dust here can be used in China to fill orders and bring in revenue, he said.

Once TSMC enters the China market, there are rich pickings to be had.

"China will lead the world in semiconductor market growth in 2003," said Lee.

China bought US$17 billion worth of chips last year, up 17 percent from the year before. This year that figure is expected to grow a further 18 percent to top US$20 billion. But the global market may only see 7.5 percent growth this year over last year, according to Gartner.