Home / Taiwan Business
Thu, Mar 21, 2002 - Page 18 News List

Chipmakers may wait long for a decision

MOVING TO CHINA Taipei is set to lift its ban on moving eight-inch factories to China, but such investments may be stalled until a `management mechanism' is formulated

BLOOMBERG , TAIPEI

Taiwan Semiconductor Manufac-turing Co (TSMC, 台積電) and other chipmakers angling to enter China's US$10 billion market may have to wait longer than expected amid signs the Taiwan government will drag out the process of easing controls, local media reported, citing Premier Yu Shyi-kun.

The government is expected to announce this month that it's lifting its ban on Taiwan companies taking older eight-inch chip technology to China. However, those investments may be stalled while the government devises an "effective management mechanism," Yu was quoted as saying in the Chinese-language Commercial Times newspaper. That will occur when "the time is ripe," he said.

Taiwan has been slow to relinquish controls over technology that turned it into the fourth-largest chipmaking nation and see it flow to rival China. However, the die is cast, analysts say.

"The policy to let the chipmakers go to China is already in Yu's pocket," said Michael Wang, who helps manage NT$6 billion in stocks at Ta Chong Investment Trust Corp (大眾投信). "It's just a matter of finding a better time to announce it."

The government is expected to require that chipmakers be allowed to transfer only fully depreciated machinery to China.

It's also expected to insist that chipmakers who invest on the mainland also invest in advanced 12-inch silicon wafer technology in Taiwan.

"The ruling party is putting economics ahead of politics," said Jeremy Chang, who manages NT$840 million (US$24 million) in stocks at Cathay Securities Investment Trust (國泰投信). "From the perspective of industrialists and Taiwan's international competitiveness, that's positive."

Some companies, including chipmaker Mosel Vitelic Inc (茂矽), have jumped the gun and moved to China, arguing that they need to compete with foreign rivals in the world's third-largest semiconductor market.

Last month, United Microelectronics Corp (UMC, 聯電), the second-largest made-to-order chipmaker, said it had prepared a plan to invest in China once the ban is lifted.

"We're thinking of the internal market," UMC Vice Chairman Peter Chang (張崇德) said last week at a technology conference. "The consumer area is more important than anything else there."

This story has been viewed 2658 times.
TOP top