Rules to stay on fabs moving to China

The government's policy regulating the relocation of semiconductor foundries to China will remain unchanged after the new Cabinet is sworn into office on May 20, minister of economic affairs-designate Ho Mei-yueh (何美玥) said yesterday.

Answering questions by Taiwan Solidarity Union (TSU) legislators over a breakfast meeting, Ho said she will follow the policy drafted by former minister of economic affairs Lin Yi-fu (林義夫) more than a year ago and approved by the legislature early last year.

Under the current policy, the nation's chipmakers are allowed to relocate their 8-inch wafer fabrication facilities, technologies and capital to China only after their 12-inch wafer plant operations in this country are in full production.

Ho, vice chairwoman of the Council for Economic Planning and Development, said that maintaining consistency and continuity in policies is part of the government's efforts to gain the trust of the private industrial sector and boost economic development.

However, TSU Legislator Huang Chung-yung (黃宗源) argued that the Executive Yuan and the TSU had reached consensus that there would be other conditions added for allowing Taiwanese firms to relocate their 8-inch wafer foundries to China, including that a firm's 12-inch wafer yield technology and capability must exceed 70 percent.

Huang said they had also agreed that other conditions will include the passage of a science and technology protection law and the establishment of a capital-flow control mechanism.

TSU Legislator Liao Ben-yan (廖本煙) warned that he would not sit idly by and let Ho "rashly" give the green light to Taiwan's semiconductor manufacturers to head to china.

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world's largest made-to-order chipmaker, filed an application with the Investment Commission in September 2002 for permission to set up a factory in Shanghai's Sungjiang Industrial Park to manufacture 8-inch wafers. The investment project calls for an outlay of US$371 million.

TSMC's 12-inch wafer yield technology and capability has reached 90 percent, according to corporate sources.

On the development of free-trade harbor zones, Ho told TSU legislators that regulations on workers in the zones that require at least 5 percent of the workforce to be Aborigines have impeded the promotion of such zones.

The council has said that Aborigines account for only 1.9 percent of the total population and 1.7 percent of the total labor force. The regulations, which are aimed at protecting the working rights of Aborigines, do not take the real situation into account, according to the council.