The government will need final approval from the National Security Council in order to further loosen restrictions on investment in China by Taiwanese chip firms, a government official said yesterday.
Over the past year, no substantial policy change has been made amid rocky cross-strait ties, despite the mounting calls from the semiconductor industry for further relaxation of regulations to help safeguard their competitiveness.
"We also hope to see progress made [about removal of restrictions on Chinese investment by domestic chip testers and packagers]," said Minister of Economic Affairs Ho Mei-yueh (何美玥) at a year-end press conference.
While the ministry is in charge of evaluating China-bound investments by local companies and their impact on Taiwan's industry, the National Security Council and the Mainland Affairs Council, rather than the ministry, have the final say on cross-strait trade policy.
Three years ago, the government made the first move by granting permission for three Taiwanese chipmakers to make low-end 0.25-micron technology chips in China. That ruling allows chipmakers to use older and less-advanced 200mm facilities by the end of this year.
So far, only Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world's biggest contract chipmaker, has successfully obtained that approval.
Powerchip Semiconductor Corp (力晶半導體) and ProMOS Technology Inc (茂德科技) filed their applications to manufacture memory chips in China about a year ago. The two companies are still waiting for the results of the review.
"We are sticking to our stance concerning the opening," Ho said.
But, as companies such as Powerchip have said that it would be difficult to be profitable using 0.25-micron technology to make chips in China, Ho said the ministry would like to talk to the firms about whether they would move ahead with planned investment projects.
In response to the calls to allow local firms to make chips in China using more advanced 0.18-micron processing technologies, Ho said it would need to hold more extensive discussions on concerns about how technological migration would give strength to its Chinese rivals while further eroding the competitiveness of Taiwan's domestic semiconductor industry.
Without further relaxation, Powerchip will not relocate its 200-millimeter facilities to China in the short term, even if it obtained the approval, company spokesman Eric Tan (
Tan said they would be glad to obtain the approval. "But, it's in nobody's interest to invest in a money-losing business," he said. "We are facing even [greater] threats."
Semiconductor Manufacturing International Corp (中芯), the biggest chipmaker in China, is making memory chips using even more advanced 0.13-micron and 90-nanometer processing technologies.
But, ProMOS would keep its Chinese-investment plan unchanged, spokesman Ben
Tseng (曾邦助) said. The company would manage to eke out profits by making
chips using the less-advanced 0.25-micron processing technology, Tseng said.
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