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
CHAOS: Iranians took to the streets playing celebratory music after reports of Khamenei’s death on Saturday, while mourners also gathered in Tehran yesterday Iranian Supreme Leader Ayatollah Ali Khamenei was killed in a major attack on Iran launched by Israel and the US, throwing the future of the Islamic republic into doubt and raising the risk of regional instability. Iranian state television and the state-run IRNA news agency announced the 86-year-old’s death early yesterday. US President Donald Trump said it gave Iranians their “greatest chance” to “take back” their country. The announcements came after a joint US and Israeli aerial bombardment that targeted Iranian military and governmental sites. Trump said the “heavy and pinpoint bombing” would continue through the week or as long
An Emirates flight from Dubai arrived at Taiwan Taoyuan International Airport yesterday afternoon, the first service of the airline since the US and Israel launched strikes against Iran on Saturday. Flight EK366 took off from the United Arab Emirates (UAE) at 3:51am yesterday and landed at 4:02pm before taxiing to the airport’s D6 gate at Terminal 2 at 4:08pm, data from the airport and FlightAware, a global flight tracking site, showed. Of the 501 passengers on the flight, 275 were Taiwanese, including 96 group tour travelers, the data showed. Tourism Administration Deputy Director-General Huang He-ting (黃荷婷) greeted Taiwanese passengers at the airport and
TRUST: The KMT said it respected the US’ timing and considerations, and hoped it would continue to honor its commitments to helping Taiwan bolster its defenses and deterrence US President Donald Trump is delaying a multibillion-dollar arms sale to Taiwan to ensure his visit to Beijing is successful, a New York Times report said. The weapons sales package has stalled in the US Department of State, the report said, citing US officials it did not identify. The White House has told agencies not to push forward ahead of Trump’s meeting with Chinese President Xi Jinping (習近平), it said. The two last month held a phone call to discuss trade and geopolitical flashpoints ahead of the summit. Xi raised the Taiwan issue and urged the US to handle arms sales to
State-run CPC Corp, Taiwan (CPC, 台灣中油) yesterday said that it had confirmed on Saturday night with its liquefied natural gas (LNG) and crude oil suppliers that shipments are proceeding as scheduled and that domestic supplies remain unaffected. The CPC yesterday announced the gasoline and diesel prices will rise by NT$0.2 and NT$0.4 per liter, respectively, starting Monday, citing Middle East tensions and blizzards in the eastern United States. CPC also iterated it has been reducing the proportion of crude oil imports from the Middle East and diversifying its supply sources in the past few years in response to geopolitical risks, expanding
RSS