Tue, May 13, 2008 - Page 12 News List

ASE, Powertech get go-ahead for China investment

By Lisa Wang  /  STAFF REPORTER

Local chip testers and packagers Advanced Semiconductor Engineering Inc (ASE, 日月光半導體) and Powertech Technology Inc (力成科技) obtained government approval yesterday to invest an additional US$190 million in their plants in China.

This was the latest go-ahead for investments in the Chinese semiconductor market by the Ministry of Economic Affairs, which restricts Taiwanese manufacturers’ investments in high-tech operations in China for fear of losing its technological competitiveness.

ASE, the world’s largest chip packaging service provider, was allowed to invest US$90 million in its Shanghai plant, following a US$30 million investment approved by the ministry in February to expand capacity.

Powertech intends to spend US$100 million building a new factory in China within the next three years, a company executive said by telephone. The company would move its equipment by the end of next year at the earliest, he said.

“This is a new investment project … We are adapting to our customers’ move to China. They are gradually shifting their operations there,” said a Powertech official, who requested not to be named.

Powertech provides testing and packaging services for memory chipmakers including Japan’s Elpida Memory Inc, Toshiba Corp and the US Kingston Technology Co Inc.

Taiwan, however, would remain the main manufacturing site, he said. The Chinese plant would produce 10 million units monthly after the start of operations, far fewer than the monthly output of 130 million units at the three Taiwanese plants, he said.

Powertech also intends to spend NT$28 billion (US$908 million) building two more plants in Hsinchu and central Taiwan in the next few years, he said. The Hsinchu plant is already under construction, he said.

Powertech has lagged behind other local rivals in building Chinese factories, he said.

Last summer, Siliconware Precision Industries Co (矽品精密), the nation’s second-biggest chiptester and packager, and smaller players Greatek Electronics Inc (超豐) and Walton Advanced Engineering Inc (華東科技), received a long-awaited go-ahead from the government to build their Chinese plants.

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