The country's top chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC), has asked the government for permission to invest in 8-inch wafer production in China. This application will test the government's determination and ability to implement its "active opening, effective management" policy for investments in China.
On Wednesday, an inter-ministerial review committee of the Ministry of Economic Affairs announced a preliminary approval of the compnay's application, saying that investment project was approved "in principle." Faced with a major uproar -- especially from TSU lawmakers -- the Mainland Affairs Council was quick to explain that the review procedure is two-staged, and that TSMC must pass the second stage before it can obtain final approval. To pass that stage, chip production at TSMC's 12-inch wafer fabs in Taiwan must first increase to the level where operational efficiency has been realized and production cost lowered -- making the 12-inch wafers more attractive and the plants more viable.
Clearly, other factors, including the state of the nation's economy, must also be taken into consideration before allowing the company to expand in China. And all signs indicate that Taiwan is ill prepared to compete with a TSMC wafer foundry in China. It is hoped, therefore, that the government will have the courage to put the brakes on the company's application during the second phase of the review procedure.
Why?
For one, Premier Yu Shyi-kun has already promised that approval for investments in China by chipmakers would not be given before the the national technology protection law (國家科技保護法) had been enacted. Since the proposal has not been enacted, any approval of TSMC's application would be premature.
In addition, one can hardly see the need for chipmakers to rush off to China when the 8-inch wafer fabs in Taiwan are currently running at only 50 to 60 percent of capacity. In fact, the decline in the semiconductor industry means that the utilization level of 12-inch wafer fabs is even lower -- not only here but also abroad.
We already know that the exodus of this country's traditional industries has a dealt a devastating blow to the economy. While these industries may truly have their reasons for leaving -- since the dirt cheap labor force and land in China could arguably boost their market competitiveness -- no such reason exist for the high-tech industries to leave.
The semiconductor industry in this country possesses up to 77 percent of the world OEM orders, demonstrating its unsurpassed competitiveness. Why then, should we open up the gate for their departure?
Finally, it would be entirely foolish to blindly allow such investments in China without taking into consideration national-security concerns. Because Taiwan has been a major supplier to the US military, this country's semiconductor industry already possesses much of the integrated circuit technology that the US uses on its long-range missiles. This technology is so sensitive that the Pentagon banned its exportation to communist countries.
Currently, the gap between the semiconductor technologies of the US and China has narrowed to less than one generation. If Taiwanese companies invest in wafer fabs in China, it could easily open up the exportation of this sensitive information and help China to eliminate the technology gap entirely.
Clearly, that cannot be allowed to happen. We can only hope that the government will have the guts to do the right thing.
Could Asia be on the verge of a new wave of nuclear proliferation? A look back at the early history of the North Atlantic Treaty Organization (NATO), which recently celebrated its 75th anniversary, illuminates some reasons for concern in the Indo-Pacific today. US Secretary of Defense Lloyd Austin recently described NATO as “the most powerful and successful alliance in history,” but the organization’s early years were not without challenges. At its inception, the signing of the North Atlantic Treaty marked a sea change in American strategic thinking. The United States had been intent on withdrawing from Europe in the years following
My wife and I spent the week in the interior of Taiwan where Shuyuan spent her childhood. In that town there is a street that functions as an open farmer’s market. Walk along that street, as Shuyuan did yesterday, and it is next to impossible to come home empty-handed. Some mangoes that looked vaguely like others we had seen around here ended up on our table. Shuyuan told how she had bought them from a little old farmer woman from the countryside who said the mangoes were from a very old tree she had on her property. The big surprise
The issue of China’s overcapacity has drawn greater global attention recently, with US Secretary of the Treasury Janet Yellen urging Beijing to address its excess production in key industries during her visit to China last week. Meanwhile in Brussels, European Commission President Ursula von der Leyen last week said that Europe must have a tough talk with China on its perceived overcapacity and unfair trade practices. The remarks by Yellen and Von der Leyen come as China’s economy is undergoing a painful transition. Beijing is trying to steer the world’s second-largest economy out of a COVID-19 slump, the property crisis and
As former president Ma Ying-jeou (馬英九) wrapped up his visit to the People’s Republic of China, he received his share of attention. Certainly, the trip must be seen within the full context of Ma’s life, that is, his eight-year presidency, the Sunflower movement and his failed Economic Cooperation Framework Agreement, as well as his eight years as Taipei mayor with its posturing, accusations of money laundering, and ups and downs. Through all that, basic questions stand out: “What drives Ma? What is his end game?” Having observed and commented on Ma for decades, it is all ironically reminiscent of former US president Harry