United Microelectronics Corp (UMC, 聯電), a local semiconductor giant, is in no hurry to invest in China, the company's chairman, Robert Tsao (曹興誠), said yesterday in the Hsinchu Science-based Industrial Park (新竹科學園區) while attending a factory opening ceremony of the Unipac Electronics Corp (聯友光電), a subsidiary of UMC.
While several key players in the chip industry are planning to invest in the mainland, Tsao said that China does not provide much in the way of incentives to high-tech firms.
Although the Chinese market is growing and boasts a big population, Tsao said that his company has no intention to investment there because UMC has set its sights on the global market. Since China's high-tech talent pool is small and its labor costs are not cheap, UMC is not keen to invest there, he added.
Meanwhile, as major semiconductor makers have slowed down expansion of their production capacity in recent months, some say that this will lead to a decline in the competitive edge of Taiwan's semiconductor industry. But Tsai said that is not the case for wafer makers like UMC.
"Just the opposite. When the economy is down, contract wafer makers have a good opportunity for expansion," Tsao said, adding that not every company will be involved in this recession. "In fact, producing diversified products has made us more flexible to market change and less affected than IDMs [integrated device manufacturers]," Tsao said.
Unlike contract foundries, IDMs control every step in the manufacturing process, from IC design to chip manufacturing, testing and packaging. Companies in this category include Intel, NEC, Toshiba and Texas Instruments.
"Foundries have triple strength to expand output," Tsao said, adding that UMC will continue its expansion plans.
Asked whether the semiconductor industry in China will soon surpass Taiwan's, Tsao said that since the island's competitive edge lies not only in its technology base, but also in its business management and its entrepreneurial spirit, he is not worried. Tsao said pre-January sales will be a strong influence on UMC's first-quarter results.
"Pre-holiday sales will be an important gauge to watch. If sales are good, it will reduce inventories of silicon wafers in the industry, which in turn will help boost market confidence in the first quarter of next year," he said.
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