In order to prevent capital outflow from eight-inch wafer fabs moving to China, the Legislative Yuan's Technology and Information Committee requested yesterday that the Central Bank and the Ministry of Finance submit a related report within one week, according to Chinese-language media report.
Government officials, including the central bank's deputy governor, Hsu Yi-hsiung (
Much of problem stems from concerns that the market opening will trigger a massive outflow of capital.
"It takes about US$1 billion to US$1.5 billion to set up one eight-inch wafer fab (in China)," Hsu was quoted as saying.
Since setting up a factory abroad is a step-by-step process, capital outflow will be on an incremental, decreasing basis, and once they are operating the outflow stops, he said.
Many Taiwanese businesses also utilize capital from overseas markets to invest in China, so for these reasons, the capital outflow from Taiwan businesses moving their wafer fabs to China is not that serious, Hsu said.
"Taiwan's current account surplus in 2001 was US$19 billion. The surplus should be enough to cover the losses generated from moving out the eight-inch wafer fabs," said Hsu.
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