Wed, Jun 25, 2008 - Page 12 News List

Taiwan may ease panel rules

RELAXING? Analysts said easing the ban on building advanced fabs in China could help Taiwanese firms, but voiced doubts that makers plan to do so in the near term

By Lisa Wang  /  STAFF REPORTER

The government is considering relaxing rules to permit local liquid-crystal-display (LCD) panel and chip companies to manufacture products using more advanced technologies in China, amid improving trade ties between Taiwan and China, a government official said yesterday.

That may be the next step the administration of Ma Ying-jeou (馬英九) implements to open cross-strait policy, after recently resuming talks with Beijing to increase charter flights and quotas for Chinese tourists.

“We will review this issue late in August. We have no substantial plan yet,” said Chang Ming-ping (張銘斌), spokesman for the Ministry of Economic Affairs’ Investment Commission, which handles most matters involving China-bound investment by local companies.

Chang made the comments after the Chinese-language Commercial Times reported yesterday that the government plans to significantly relax restrictions on local tech firms — primarily flat panel makers and chipmakers — to make products in China.

It is the government’s medium to long-term plan to allow LCD panel makers to build advanced plants such as 5.5-generation (5.5G) and sixth-generation (6G) plants in China, the report said.

“The letup will have a positive impact on local LCD companies. Without the restrictions, they can maximize returns by building more global production lines,” said Annabelle Hsu (徐美雯), an LCD panel analyst with market researcher International Data Corp.

“But, at the moment, I do not see any immediate need for local flat panel makers to build manufacturing plants — which are capital and technology-intensive — in China because of limited cost-saving effect. Most of them have already built cost-intensive assembly factories there,” Hsu said.

To safeguard the nation’s technological advantages and to protect the job market, local flat panel makers now are only allowed to assemble LCD screens and make mobile phone screens in China.

Chang said the commission’s priority now was to scrap the China-bound investment ceiling next month. Currently, Taiwanese listed companies are allowed to invest up to 40 percent of their net value in China.

As part of the opening-up measure, the government may also allow local chipmakers to make chips using more advanced 0.13-micron process technologies in China, compared with the 0.18-micron process technology allowed now, the report said.

Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s top contract chipmaker, has requested to make chips using 0.13-micron technology in China to compete with rivals there.

TSMC is the nation’s only chipmaker with government approval to manufacture chips using 0.18-micron technology at its Shanghai plant.

TSMC shares climbed 0.16 percent to NT$64.2 yesterday, outperforming the benchmark TAIEX which slid 1.76 percent.

Shares of the nation’s biggest LCD panel supplier, AU Optronics Corp (友達光電), fell 5.24 percent to NT$47.95.

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