TSMC To Get Permission To Build
8-Inch Wafer Fab In China
TSMC, the largest chip foundry in the world, based in
Hsinchu Taiwan, will soon be given permission by the Taiwan
government to build an 8-inch wafer plant in China. The
announcement came from Taiwan's vice minister for Economic
Affairs, Shi Yen-hsiang.
Taiwan's Ministry of Economic Affairs said that TSMC,
in which the Taiwan government is a major shareholder,
would be allowed to build an 8-inch wafer plant in China
only after its 12-inch wafer plant in Taiwan had been
in production for six months. This policy is designed
to keep the latest technology in Taiwan, and only allow
second-generation technology into China.
TSMC, or Taiwan Semiconductor Manufacturing Co., is the
world's largest chip foundry, and handles the manufacturing
needs of design firms and industry clients. In the past
three years, it has come under heavy pressure from new
competitors in China such as SMIC (Semiconductor Manufacturing
International Corp.), based in Shanghai. Because the high
capital investments of the industry require government
funding and backing, this industry has always been tightly
interwoven with the Taiwan and Chinese government. Because
the two governments are at odds over the status of Taiwan,
this further complicates investment policy.
In TSMC's case, the governmental delays have hurt the
company's ability to establish a foothold in China's growing
domestic market for chips. Taiwan's presidential election,
held in March, was seen as further delaying a government
decision about TSMC's proposed investments in Shanghai.
As a result, the company has resorted to other means,
such as suing SMIC for intellectual
property violations to delay its US IPO and China
expansion.
Taiwan's definition for successful production of the
12-inch wafers is that TSMC must produce more than 10,000
wafers per month, and be profitable, before the Ministry
of Economic Affairs will give their blessing to the investment
move. Shi's statement that TSMC has met these conditions
means that as far as the MOEA is concerned, TSMC has met
these conditions. The next step is for an inter-ministry
group to agree.
TSMC plans to move its older 8-inch, 0.25 nanometer manufacturing
equipment to its new Shanghai Songjiang plant, and use
that plant's capacity to serve local Chinese customers.
The company has said that it plans to invest US$4 billion
in the new 12-inch wafer technology.
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