TSU claims victory in wafer squabble

The TSU is claiming victory in its battle with the DPP-led government over whether to allow Taiwanese chipmakers to set up eight-inch wafer fabs in China.

On Monday, party officials told reporters the Cabinet has agreed to consider its proposal that the measure be delayed until 12-inch wafer manufacturing in Taiwan is fully ramped up.

In exchange, the TSU cancelled a protest against the government's plan that was scheduled for Friday.

"It is not the TSU but the Cabinet that has budged on the issue," TSU Chairman Huang Chu-wen (黃主文) said late Monday night.

"I would not use words such as `win' or `lose' to characterize the development. Instead, it appears to me the government has at last realized what it should do," Huang said.

The TSU has argued that 12-inch wafer manufacturing -- still in its early stages in Taiwan and around the world -- should reach full speed before eight-inch fabs are allowed to migrate to China.

There are 23 eight-inch wafer plants in Taiwan that produce 80 percent of the nation's chip-production value. Three 12-inch wafer plants account for 12 percent.

According to TSU lawmakers, Premier Yu Shyi-kun agreed to consider the TSU's position in a meeting on Sunday.

"The government will go ahead and declare at the end of this month that restrictions will be eased," TSU legislative whip Lo Chih-ming (羅志明) said.

"But chipmakers will have to wait for a certain period of time before they can set up eight-inch wafer foundries across the Strait," Lo said.

Lo said legislation to create an agency to monitor the flow of technology to China would also have to be passed.

In addition, the TSU says the Cabinet has agreed to develop ways to monitor private-sector investment in China and solicit opinions from the party before the measures are finalized.

The party says it has agreed to call off Friday's protest because of the concessions it has gained from the Cabinet.

Small, but influential

Despite its small size -- the TSU has just 13 seats in the legislature -- the party has spoken with a loud voice on the eight-inch wafer issue. The DPP government has been forced to listen because it needs its pan-green ally in stand-offs against the pan-blue camp consisting of the KMT and PFP.

TSU spiritual leader and former president Lee Teng-hui (李登輝), who still commands widespread respect from the public, has spoken out against allowing eight-inch wafer investment in China.

An inter-ministerial task force plans to announce its recommendations on the issue at the end of this month.

Earlier, key panelists, notably Lin Hsin-yi (林信義), vice premier and chairman of the Council for Economic Planning and Development, indicated that the government has decided that it will conditionally lift the ban.

But officials have been quiet about its intentions recently, leading TSU members to say they've won. "We don't hear such statements lately, do we?" Huang said.

Still, chipmakers remain upbeat, saying the government is sympathetic to their cause and recognizes that globalization is a trend.

Gordon Chen (陳文咸), president of the Taiwan Semiconductor Industry Association, said he doubted that the government would easily cave to TSU pressure. "We have had several meetings with related government agencies," Chen said. "They understand the situation best and have all expressed sympathy."