Sat, Dec 30, 2006 - Page 12 News List

TSMC receives go-ahead on upgrade

GREEN LIGHT The government concluded that the advantages of allowing more advanced technology outweighed the possibility of losing competitiveness to China

By Lisa Wang and Jewel Huang  /  STAFF REPORTERS

The world's biggest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電),gained the government's approval yesterday to manufacture chips in China using more advanced technology once a government-imposed ban is lifted.

"TSMC welcomes the decision and believes that it will help our competitiveness in the China market," said TSMC spokeswoman Lora Ho (何麗梅) in a statement issued last night.

"The addition of 0.18 micron process technology will help us meet the manufacturing needs of our customers in China, and we believe that we will win more orders and expand TSMC's market share in China," Ho said.

TSMC's remark came after both the Ministry of Economic Affairs (MOEA) and the Mainland Affairs Council (MAC) yesterday announced that Taiwanese chipmakers would be able to apply for making chips with 0.18-micron processing technology in China, instead of continuing to rely on the older 0.25-miron processing technology.

The change of policy will be limited to transferring techniques internally between Taiwanese parent companies and their investments in China. It will not be allowed to transfer technology to other companies in China.

MAC Vice Chairman Liu Te-shun (劉德勳) said that the policy change aimed to achieve two goals. Firstly, it would bring Taiwan in line with international norms on high-tech processing technology. Second, it would help the companies compete. Liu said that the advantages of the policy change outweighed the disadvantages.

Liu pointed out that in December 2004, the Wassenaar Arrangement Export Controls for Conventional Arms and Dual-Use Goods and Technologies changed the regulations for processing technology for semiconductor use, revising the limit from 0.35 micrometers to 0.18 micrometers.

The US has revised its export control list and no longer limits the production of processing technology above 0.18 micrometers, Liu said.

He said it was crucial for Taiwan to loosen restrictions on processing technology for wafer production to comply with international norms.

Liu also said the policy change would not have a negative impact on domestic semiconductor industries.

Instead, it would promote the competitiveness of those investing in China, he said.

TSMC's Ho said that TSMC would build the capacity to manufacture 0.18-micron semiconductor processing technology in China. In line with government regulations, the company will also expand investment in Taiwan.

TSMC has gotten approval to operate a plant that now makes 30,000 wafers a month from an 8-inch factory in Shanghai.

The government's policy change came after it concluded that looser rules would not result in losing competitiveness to Chinese firms by transferring advanced technologies to them.

Many foreign chipmakers, including Chinese companies, were already producing chips using 0.18-micron and more advanced 0.13-micron processing technology, the ministry said yesterday.

Powerchip Semiconductor Corp (力晶半導體), the nation's biggest computer memory chipmaker, said yesterday it would file a new application for permission to upgrade its technology, company spokesman Eric Tan (譚仲民) said.

Powerchip on Wednesday got the go-ahead from the government for a US$401 million plan to build an 8-inch wafer facility in China. It planned to produce chips using 0.25-mircon processing technology.

Smaller rival ProMOS Technologies Inc (茂德科技) also received a similar approval for a US$365 million Chinese investment plan.

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