MOEA to grant 12-inch wafer facility proprietorship in China
The Ministry of Economic Affairs (MOEA, says it will soon relax its rules to let semiconductor companies establish 12-inch wafer facilities in mainland China through sole proprietorship — a measure that aims to safeguard companies’ advanced technical know-how.
Under current laws, firms can make investments in China in the form of equity ownership or joint ventures. However, going the co-ownership route risks exposing the intellectual property of local firms, the MOEA said.
The MOEA has recently amended laws covering investment and manufacturing activities in mainland China, or more specifically, which items it is forbidden to manufacture there.
The 12-inch wafer was removed from the list, and a maximum of three 12-inch wafer facilities can be constructed in China, based on the revised regulation. There is no cap on fabrication plants built under joint ventures, however.
The revised regulation also dictates that all semiconductor fabrication plants in China, whether sole proprietorships or joint ventures, are limited to producing 12-inch or smaller size wafers.
In addition, production processes that make their way into mainland China must be at least “one generation” behind the technology available in Taiwan, the Economics Ministry said.
Economics Minister John Deng ( ) said the proprietorship model allows firms to implement their own management so as to keep advanced technologies in Taiwan and to encourage more local investment.
Deng stressed that firms making inroads in China must make equivalent investments in Taiwan and may not reduce their local workforce. Also, they must finance their own investments in China.
Once the Economics Ministry finalizes the regulations, it will be submitted to the Executive Yuan for review and be approved as early as the end of August.
TSMC Positive About the Development
The investment application of Taiwan Semiconduc- tor Manufacturing Co. ( TSMC, ), the world's largest contract chip-maker, may be submitted and approved by the end of the year.
TSMC has established 8-inch wafer plants in China without reduced hiring in Taiwan. Since making headway in China in 2003, TSMC’s workforce in Taiwan has grown by 20,170, while hiring increased relatively slowly, by 2,663, in China.
In response to the MOEA’s new policy, TSMC expressed optimism about the new development, saying that it provides more options for semiconductor companies and helps protect their trade secrets and intellectual property.
However, as to whether it will construct 12-inch wafer plants in China is still being studied, TSMC said.
United Microelectronics Corp. ) and PowerChip Semiconductor Corp. ( ) have opted for the equity sharing approach for their 12-inch wafer foundry investment. United Microelectronics said it has no sole proprietorship plans as of now.
Deputy Economics Minister Shen Jong-chin ( ) speaks at an event in Taipei, yesterday. Shen made the announcement that the government will relax rules to allow semiconductor companies set up 12-inch wafer foundries in China through sole proprietorship.