The Ministry of Economic Affairs (MOEA) yesterday said it plans to ease regulations on China-bound investments in 12-inch wafer foundries, allowing Taiwanese semiconductor companies to wholly own 12-inch plants in China.
“The relaxed regulations will help Taiwanese companies, such as Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), to fortify their position in the expanding Chinese market,” Vice Minister of Economic Affairs Shen Jong-chin (沈榮津) told a press conference.
Under current regulations, Taiwanese firms are allowed to invest in 12-inch chip plants in China only via merger and acquisition or by doing so jointly with other companies.
Photo: CNA
Shen said TSMC had approached the Executive Yuan and the ministry several times to urge the government to ease the China-bound investment requirements, after major semiconductor companies like Intel Corp and Samsung Electronics Co set up 12-inch plants there.
In addition, Beijing is planning to raise 120 billion yuan (US$18.75 billion) to foster its semiconductor industry over the next few years, which poses a great threat to Taiwan’s semiconductor industry in the long term, he said.
“We forecast China’s semiconductor industry to account for 31 percent of global market share by 2018,” Shen said. “It is necessary for Taiwan to amend the regulations to help local semiconductor firms secure a share of the Chinese market as soon as possible.”
“As Taiwanese panel makers failed to secure market share in China, we cannot let Taiwan’s semiconductor industry face the same dire situation,” he added.
Based on the proposed regulatory amendments, Taiwanese semiconductor companies can wholly own up to three 12-inch plants in China, with the proposed investment in wafer technologies required to be one generation less advanced than the company’s most advanced technology.
Shen said the ministry would also request local companies to invest in research and development in more advanced semiconductor technologies in Taiwan. They are also to be required to purchase materials from Taiwan, he said.
The new regulations, which are under administrative review, could take effect at the end of this month at the earliest following the Executive Yuan’s approval, Shen said.
Investment Commission acting executive secretary Emile Chang (張銘斌) said it would take two months for the commission to review companies’ investment applications.
TSMC spokesperson Elizabeth Sun (孫又文) yesterday said the company is still evaluating the possibility of Chinese investment.
“The deregulation is a positive factor for the company in considering a Chinese investment plan” in the future, Sun said by telephone.
The relaxation is to provide better protection for Taiwanese firms’ intellectual property rights and trade secrets as long as they can operate a 100 percent-owned Chinese unit, Sun said.
China contributed 8 percent of TSMC’s overall revenue of NT$205.44 billion (US$6.35 billion) last quarter.
The company currently operates an 8-inch factory in Shanghai, with annual capacity of 100,000 wafers.
TSMC chairman Morris Chang (張忠謀) early this year said that the company is considering making 28-nanometer chips in China.
Industrial Technology Research Institute (工研院) semiconductor industry analyst Jerry Peng (彭茂榮) said operating a Chinese plant would help Taiwanese chipmakers fend off growing competition from their Chinese rivals.
However, only industry leaders with deep pockets like TSMC could afford a new 12-inch factory on their own in China, Peng said.
Taiwan’s United Microelectronics Corp (UMC, 聯電) is building a 12-inch factory in China via a three-way venture with the Xiamen City Government and Fujian Electronics & Information Group (福建電子信息集團), while Powerchip Technology Corp (力晶科技) has inked an agreement with Hefei Construction Investment and Holding Co Ltd (合肥市建設投資控股) to invest in a Chinese chipmaker to manufacture driver ICs for LCD TV panels at a new 12-inch plant.
Additional reporting by Lisa Wang
The US government has signed defense cooperation agreements with Japan and the Philippines to boost the deterrence capabilities of countries in the first island chain, a report by the National Security Bureau (NSB) showed. The main countries on the first island chain include the two nations and Taiwan. The bureau is to present the report at a meeting of the legislature’s Foreign Affairs and National Defense Committee tomorrow. The US military has deployed Typhon missile systems to Japan’s Yamaguchi Prefecture and Zambales province in the Philippines during their joint military exercises. It has also installed NMESIS anti-ship systems in Japan’s Okinawa
TRAGEDY STRIKES TAIPEI: The suspect died after falling off a building after he threw smoke grenades into Taipei Main Station and went on a killing spree in Zhongshan A 27-year-old suspect allegedly threw smoke grenades in Taipei Main Station and then proceeded to Zhongshan MRT Station in a random killing spree that resulted in the death of the suspect and two other civilians, and seven injured, including one in critical condition, as of press time last night. The suspect, identified as a man surnamed Chang Wen (張文), allegedly began the attack at Taipei Main Station, the Taipei Fire Department said, adding that it received a report at 5:24pm that smoke grenades had been thrown in the station. One man in his 50s was rushed to hospital after a cardiac arrest
PUBLIC SAFETY: The premier said that security would be tightened in transport hubs, while President Lai commended the public for their bravery The government is to deploy more police, including rapid response units, in crowded public areas to ensure a swift response to any threats, President William Lai (賴清德) said yesterday after a knife attack killed three people and injured 11 in Taipei the previous day. Lai made the remarks following a briefing by the National Police Agency on the progress of the investigation, saying that the attack underscored the importance of cooperation in public security between the central and local governments. The attack unfolded in the early evening on Friday around Taipei Main Station’s M7 exit and later near the Taipei MRT’s Zhongshan
ON ALERT: Taiwan’s partners would issue warnings if China attempted to use Interpol to target Taiwanese, and the global body has mechanisms to prevent it, an official said China has stationed two to four people specializing in Taiwan affairs at its embassies in several democratic countries to monitor and harass Taiwanese, actions that the host nations would not tolerate, National Security Bureau (NSB) Director-General Tsai Ming-yen (蔡明彥) said yesterday. Tsai made the comments at a meeting of the legislature’s Foreign Affairs and National Defense Committee, which asked him and Minister of National Defense Wellington Koo (顧立雄) to report on potential conflicts in the Taiwan Strait and military preparedness. Democratic Progressive Party (DPP) Legislator Michelle Lin (林楚茵) expressed concern that Beijing has posted personnel from China’s Taiwan Affairs Office to its
RSS