Authorities mull lifting China chip ban

The government is considering lifting the long-term ban on Taiwanese semiconductor manufacturers producing chips in China by the end of the year, a government official said yesterday.

Huang Chin-tan (黃慶堂), head of the Investment Commission, said the commission has reached preliminary consensus with the Mainland Affairs Council to give the greenlight to the investment liberalization plan.

Under the new plan, two computer memory chipmakers Powerchip Semiconductor Corp (力晶半導體) and ProMOS Technologies Inc (茂德科技) will be allowed to set up one eight-inch fabrication plan each in China by the end of this year, according to Huang.

In addition, the government would also allow local semiconductor firms to produce chips with relatively advanced 0.18 micronmeter processing technology, Huang said.

At the present time Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) is the only Taiwanese company that has obtained the government's approval to make chips in China using 0.25 micronmeter technology. The government agreed in 2002 to allow three local chipmakers to establish fabrication plant using 0.25 micron technology.

TSMC, the world's largest made-to-order chipmaker, has repeatedly called on the government to remove the restriction on using 0.18-micron technology to make chips in the mainland.