Sat, Mar 30, 2002 - Page 1 News List

Cabinet will let chip fabs go to China

INVESTMENT POLICY The premier announced at a late-night press conference that local chipmakers will be allowed to produce eight-inch wafers in China but not until they are producing 12-inch wafers at home

By Ko Shu-ling and Crystal Hsu  /  STAFF REPORTERS

Premier Yu Shyi-kun announced yesterday that the government will allow local chipmakers to transfer depreciated eight-inch wafer fabrication machinery to China on the condition that they meet certain requirements.

The government will also review the possibility of whether to allow new machinery of such foundries to be set up in China in two years.

The total number of low-level eight-inch wafer foundries set up in China, however, cannot exceed three before 2005.

"To reduce the negative effect of allowing local chipmakers to set up wafer foundries in China to the minimum level, the government will institute a comprehensive and effective management mechanism," Yu said. "We'll make sure that the key technology, talent and capital don't outflow to China in a bid to maintain Taiwan's high-technology competitive edge."

Yu made the remarks late last night in the Executive Yuan.

To effectively manage the wafer industry, Yu said local chipmakers have to meet certain requirements.

Their eligibility for applying to set up eight-inch wafer foundries in China will be contingent on their investment in Taiwan.

In addition, they will not be eligible for application until their 12-inch wafer fabrication plants have ramped up mass production.

Yu defined "mass production" as the plant's "normal output of ordered wafers for at least six months."

A cross-ministry task force will also be established to review the qualifications of the applicants and oversee the operation of such facilities in China.

Certain administrative decrees that need to be either amended or enacted should be completed before April 30.

Draft amendments to existing laws need to be completed before May 10 and sent to the legislature for further review and final approval. The Cabinet hopes that the draft amendments will be passed in the legislature during the current legislative session.

Yu said that he is confident that Taiwan has the capability to become the global manufacturing center for 12-inch wafers in the near future.

"It's estimated that in 2005 Taiwan will have a more mature manufacturing technology for 0.13 micron process level and that Taiwan will have eight 12-inch wafer fabrication plants set up by that time," he said.

Both chipmakers and politicians expressed approval of the Cabinet's liberal but cautious approach to the contentious issue.

Huang Chung-jen (黃崇仁), head of the Taipei Computer Association, praised the incremental opening as well-timed and added that the industry will exercise restraint in support of the "effective management" policy.

He said that no domestic chipmakers would move their eight-inch wafer facilities across the Strait overnight.

"It would take interested parties at least one year to purchase land and build plants ... they will not engage in mass production of 8-inch wafers until 2003," Huang said.

Likewise, the TSU, which has advised against hasty relaxation described the Cabinet's decision as "acceptable."

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