Flat-screen makers developing Tainan

"The TSIP is an overspill for Hsinchu, but as 12-inch fabs are being concentrated there, TSIP will become much more important in the next 10 years," he said.

The chip industry is now cutting semiconductors from disks of silicon or wafers measuring 12 inches in diameter, yielding more chips at a lower cost than the current standard 8 inches.

Taiwan Semiconductor Manu-facturing Co (台積電 ) was the first company to locate a 12-inch fab in Tainan.

United Microelectronics Corp (聯電) has reserved the space for a 12-inch facility, but has not started construction yet.