Cabinet helps out TSMC

Cabinet Secretary-General Liu Shih-fang (劉世芳) said yesterday that the government will let local chipmakers invest in 8-inch wafer manufacturing in China while the Cabinet holds talks with the opposition parties to explain the government's policy.

"We don't rule out the possibility of discussing the policy along with other China policies during the DPP's weekly central standing meeting," she said.

The DPP's ally, TSU, which strongly opposes the policy, is scheduled to meet with Yu on Tuesday to voice its objections to the government's preliminary approval of Taiwan Semiconductor Manufacturing Co's (TSMC, 台積電) investment in 8-inch wafer manufacturing in China.

On Friday, the economics ministry's inter-ministry evaluation committee completed the qualifications review of the US$898 million project submitted by the TSMC.

The leader of the TSU, former President Lee Teng-hui (李登輝) -- who is vehemently opposed to the government's "active opening, effective management" economic policy -- also criticized the decision as "providing meat to tigers."

In addition to threatening to list the premier as a persona non grata in the legislature for the next legislative session, TSU lawmakers vowed to prohibit Yu from giving his report to the Legislative Yuan on the 27th if the government doesn't modify its decision.

The legislators argued that Yu had promised the party chairman Huang Chu-wen (黃主文) that the government would not allow such investments until the National Technology Protection Bill (國家科技保護法) has passed into law.

Yu said he didn't break any promises because his promise to Huang had been "to submit the draft law to the Legislative Yuan," which he had done.

The bill has been held up in the legislature on procedural technicalities. Lawmakers across party lines, including DPP legislators, have criticized the bill as "lax," and "oversimplified."

TSU legislative whip Lin Chih-lung (林志隆) told the Taipei Times yesterday that he thinks the timing is wrong to let local chipmakers set up 8-inch wafer fabs in China if the technology protection law hasn't passed.

"Taiwan risks losing its technological talent and competitive edge if there is no law regulating the transfer of high-tech skills overseas," he said.

During the last legislative session, some DPP lawmakers successfully pushed through a motion to suspend the review of the draft bill, which they criticized as poorly thought-out.

It is not a good time to let local chipmakers set up 8-inch wafer fabrication plants in China when their 12-inch facilities are not prepared for mass production, Lin said.

"We thought the government should set a clear-cut and higher standard for the mass production of 12-inch wafer fabrication plants before allowing local chipmakers to transfer their 8-inch wafer fabrication plants to China," Lin said.

While the monthly production volume of TSMC's 12-inch wafer plant is between 3,000 and 4,000, Lin said, 20,000 a month would keep the plant competitive.

When the Executive Yuan conditionally approved local chipmakers to transfer 8-inch wafer fabrication machinery to China last March, it specified that they would not be eligible for application until their 12-inch wafer fabrication plants are ready for full production.