Government still mulling cross-strait investment rules

The government is considering allowing semiconductor-packaging and testing companies such as Advanced Semiconductor Engineering Inc (日月光) and Silicon Precision Industries Co (矽品) to invest in China to tap demand across the Strait.

The Mainland Affairs Council, Ministry of Economic Affairs and National Science Council have to approve the applications.

Mainland Affairs Council Vice Chairman Chiu Tai-san (邱泰三) declined at a foreign correspondents' briefing in Taipei to give a timetable for the approvals.

The government is poised to lift the ban on Taiwanese semiconductor testers and packagers setting up plants in China in a move to help domestic companies safeguard their leading market position, a government official told the Taipei Times late last month.

"We intend to relax the restriction," Chang Ming-pin (張銘斌), a spokesman for the Investment Commission under the Ministry of Economic Affairs, said at the time.

Chang said the government was close to completing an evaluation report regarding the matter, giving no time frame, however.

But Gordon Chen (陳文咸), president of the Taiwan Semiconductor Industry Association (台灣半導體協會), said he was optimistic about a quick relaxation.

China has stepped up its criticism of Taiwan independence sympathizers since President Chen Shui-bian (陳水扁) was inaugurated for a second term on May 20.

"China mustn't come up with further hitches," Chiu said. "It's not appropriate for us to make a policy announcement to liberalize mainland investment at such a time. Legislators would take issue with us."

Advanced Semiconductor, the world's second-largest chip packaging service provider, and smaller rival Siliconware Precision provide services for companies placing orders with Taiwan Semiconductor Manufacturing Co (台積電) and United Microelectronics Corp (聯電).

Advanced Semiconductor said in 2002 it plans to build a US$300 million chip-assembly plant in Shanghai when Taiwan ends a ban on such technology investments in China.

With additional reporting by Lisa Wang