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.

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