The government may further loosen the restrictions on Taiwanese chipmakers' investments in China by year's end, but reports of the possible relaxation drew a lukewarm reaction from industry watchers yesterday.
The government has promised to allow chipmakers to move three old factories manufacturing chips on less-advanced technology to China by the end of this year.
Computer memory chipmakers Powerchip Semiconductor Corp (力晶半導體) and ProMOS Technologies Inc (茂德科技) have been waiting for the go-ahead after filing their investment proposals almost a year ago.
"We will go through their proposals soon, after we receive the go-ahead from the Mainland Affairs Council, which reviews these cases in terms of national security," said Huang Chin-tan (黃慶堂), the executive secretary of the Investment Commission, in a telephone interview yesterday.
The only local company to have received approval to move its equipment from Taiwan to China was Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world's top contract chipmaker. It received permission to set up a factory in Shanghai in 2002.
Even if the new applications are approved, the move will not be a boon for local dynamic random access memory (DRAM) chipmakers, analysts said.
"It's not staggeringly bullish news for DRAM makers, as most of the chips are made on advanced technologies at factories in Taiwan," said Rick Hsu (徐稦成), a senior research analyst at Nomura Securities Co Ltd in Taipei.
"The opening-up will only provide an exit for, or reuse of, their last-generation fabrications plants, which will not contribute a lot to their bottom line in the future," Hsu said.
Investors did not hail the news, either. Shares of Powerchip and ProMOS fell 1.8 percent and around 1 percent to NT$16.4 and NT$9.01, respectively, on the over-the-counter Greitai Securities Market yesterday.
Joyce Hsu (許宜君), an analyst with Fuh Hwa Securities Investment Trust Co Ltd (復華投信), said there is no urgency for DRAM makers to build plants in China as they ship DRAM chips to factories around the globe.
"Bigger rival Micron Technology Inc has not set up a factory in China, either," she said.
But it would be a different story for chip testers and packagers such as Advanced Semiconductor Engineering Inc (日月光半導體), which are under pressure from rivals who have already built plants in China, they said.
"They [semiconductor testing and packaging providers] have to follow their customers when locating their plants," Hsu said.
"It is already late for local companies to develop a presence in China," Hsu said, adding that competitors such as Amkor Technology Inc set up factories there several years ago.
But there is no sign that local chip testers and packagers will be able to "go West" anytime soon.
"We haven't received any instruction from the Cabinet to lift those restrictions yet," Huang said.
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