Fri, Mar 15, 2002 - Page 2 News List

Yu gives pep talk to high-tech firms, but no word yet on eight-inch fabs

HAND-HOLDING Visiting the nation's high-technology heartland, the premier yesterday expressed support for the sector, but was hesitant to deal directly with the issue on everyone's mind -- China


Premier Yu Shyi-kun yesterday visited the Industrial Technology Research Institute (ITRI) and the Hsinchu Science-based Industrial Park, and stressed that the government would strive to promote the five major high-tech industries -- electronics, information services, communication, bio-tech and nanotechnology.

As the government weighs whether to allow local chipmakers to set up eight-inch wafer foundries in China, Yu during the visits sought to assuage the concerns of the nation's high-tech leaders, who are still reeling from a water supply shortage and the controversy surrounding their desire to build fabs in China.

The day included trips to Taiwan's leading semiconductor foundry companies -- the Taiwan Semiconductor Manufacturing Corp (TSMC, 台灣積體電路公司) and United Microelectronics Corp (UMC, 聯電).

After a close-door meeting with the heads of the two companies, the premier declined to comment on the issue issue of building chip foundries in China, saying that the Cabinet's timetable for deciding the question remains unchanged.

The question of what "effective management" actually is in this case is the cause of the differing opinions on this issue," Yu said.

During the inspection yesterday morning, Yu first praised ITRI as "the cradle of Taiwan's semiconductor industry." He said that the institute played a key role in making Taiwan fourth in the world in terms of the sector's production value.

Briefing the premier on the operations of the ITRI, board chairman Weng Cheng-i (翁政義) reminded Yu that the ITRI is a government-sponsored non-profit organization for applied research.

With 6,000 people in 12 research divisions, the institute is both a technical center for industry and an arm of the government's industrial policy.

Yu said after the briefing that he was confident in Taiwan's industrial development and he noted that the nation's chip manufacturing sector has gained 70 percent of the global market and that an efficient supply chain has been developed thanks to the "cluster effect."

The cluster effect refers to the emergence of associated industries around a main industrial hub -- like a semiconducter foundry.

The comment also highlights concern over the fate of those associated industries if the eight-inch semiconductor foundries leave Taiwan for China.

Meanwhile, Minister of Economic Affairs Christine Tsung (宗才怡) said yesterday that the government would pursue a balanced development of traditional and high-tech industries and actively promote the project of "two-star, two trillion (兩兆雙星)" which seeks to promote semicondoctor and flat display panel businesses.

The government is actively developing high-tech industries, but would not do so at the expense of traditional industries, Tsung said, adding that the government is studying providing tax incentives to traditional industries.

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