The government gave the green light to China-bound investment for low-end semiconductor packaging and testing, as well as small-sized liquid-crystal-display (LCD) panel manufacturing, Mainland Affairs Council (MAC) Chairman Joseph Wu (
"The main impetus behind the government's lifting of the ban was to boost the global competitiveness of Taiwanese companies and expand their global market share in light of many international companies' investment in China involving strategic cooperation or merger plans with Taiwanese companies," Wu said yesterday during a press conference at the council.
Wu was referring to Taiwan's Toppoly Optoelectronics Corp's planned acquisition of Royal Philips Electronics NV's display unit.
Toppoly, which aims to buy Philip's 4-inch LCD panel plant in China, filed an application with the Ministry of Economic Affairs last year and has been waiting for the government's approval.
Taiwan's ASE Group, which specializes in semiconductor packaging and testing and has expressed interest in moving low-end packaging to China, is also likely to benefit from the announcement.
Wu said companies have to fulfill the criteria to be eligible to invest in China, namely that their most advanced technology remains in Taiwan and they invest relatively higher amounts here in relation to their Chinese investments. In addition, only labor-intensive industries are to go to China, with technology-intensive industries kept in Taiwan.
The decision was announced after consultations among the National Security Council, the Executive Yuan and the Democratic Progressive Party legislative caucus, Wu said.
The council chairman yesterday said the government had initially decided to lift the ban on the two investment items at the end of 2004, but because China was set to pass its "Anti-Secession" Law in March last year, the government decided to withdraw the measure.
"After the government completed a review of the `active management, effective opening' [policy] on March 23, which has enabled related measures to be taken to ensure Taiwan's economic autonomy, we thought the time was now ripe for the government to make the announcement," Wu said.
Wu said the measure was expected to speed up the deal between Toppoly and Philips. If completed, Toppoly is likely to become the world's No. 3 firm in 4-inch LCD panel manufacturing, Wu said.
Taiwanese flat-panel makers, and chip testers and packagers welcomed the government's easing of the long-term ban.
Advanced Semiconductor Engineering Inc, the world's biggest supplier of semiconductor testing and packaging services, yesterday said it would submit to the authorities a proposal to build a production line in China at the appropriate time.
"The opening will give us a chance to catch up to rivals by grabbing business opportunities in the Chinese market," Advanced Semiconductor spokesman Free-die Liu (劉思亮) said in a telephone interview.
After a roughly two-year-wait for the relaxation, Siliconware Precision Industries Co (
"Taiwan will still be a stronghold for us. The Chinese market is still in the development stage and will not be a replacement for the home market," Chien said.
AU Optronics Corp (
RSS