The government will likely lift a longstanding ban on local chipmakers seeking to build advanced plants in China within the next two years, following a similar move by the US government, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) chairman Morris Chang (張忠謀) told reporters yesterday.
Chang made the remarks after giving a speech at an investor conference organized by Goldman Sachs in Taipei, local media reported. Company spokesman Tzeng Jin-hao (曾晉皓) confirmed the reports.
Taiwan’s government usually lags behind the US government three to four years in relaxing China-bound investment, Chang said.
TSMC, headquartered in Hsinchu, is the world’s biggest contract chipmaker.
The US government gave the go-ahead to US chip giant Intel Corp to build a 12-inch plant in China about two years ago and Taipei will probably follow suit, Chang said.
At present, local chipmakers are allowed to build three less advanced 8-inch factories in China and can operate 12-inch factories via mergers and acquisitions.
Separately, Chang downplayed investor concerns over the chipmaker’s record-high capital spending of US$4.8 billion this year, saying the company’s capacity expansion was in line with consumer demand.
Last week, Chang raised his outlook for the world’s semiconductor industry during a speech at the Global Semiconductor Alliance forum in Taipei. Global semiconductor companies could see revenues grow 22 percent this year from last year, rather than the 18 percent he had forecast in January, he said.
Separately, Goldman Sachs chief Asia-Pacific strategist Timothy Moe told a press conference yesterday the investment bank put an “overweight” rating on the TAIEX on rapidly growing corporate earnings and closer ties with China, which had yet to be fully factored in.
The investment bank set the index target for this year at 10,900 points, a 37 percent increase from yesterday’s close at 7835.98.
Goldman Sachs said Taiwanese firms should post 97 percent year-on-year growth in earnings this year and 20 percent next year, higher than a market consensus of 80 percent and 11 percent respectively, Moe said,
Drivers for the heavyweight high-tech sector would include margin expansion and sales growth on PC replacement demand and emerging market demand, he said.
Relationships between Taiwanese and Chinese companies are changing, Moe said. Taiwanese companies now see China as an end-market to sell goods to rather than a low-cost manufacturing site.
Taiwanese firms have better access to that market because of geographic and cultural advantages, he said.
If Taiwanese companies can change their way of thinking and focus more on brand and channel buildup, there will be a “huge upside opportunity for Taiwanese companies,” Moe said.
The investment bank put an overweight rating on South Korea, while giving Hong Kong a “market weight” and Singapore an “underweight” rating.
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