Taiwan to revisit China investment rules

October 30, 2007 – Following a court decision overturning an indictment of former UMC execs charged with illegal business dealings with Chinese chip company He Jian, the Taiwan government will take another look at whether it should further loosen restrictions on local IC makers’ investments in the mainland, and even help them develop domestic 450mm capabilities to support the local IC industry, according to the Taiwan Economic News.

Steve Ruey-long Chen, economics minister, indicated the Ministry of Economic Affairs (MOEA) would review overall political and economic factors in studying whether the government will be able to further liberalize Taiwan IC firms’ investments in China.

Moreover, Shih Yien-hsiang, vice economics minister, indicated these reviews will include studies of how the government can help domestic firms with costs and risks involving development of 450mm technologies.

Both UMC and TSMC are renewing calls for change in the current policies, which permit investments in Chinese chip manufacturing to 0.18-micron processes (and even this has been slow to be approved for several companies).

UMC CEO Jackson Hu called for allowing UMC to formally own a minority stake in He Jian, now that the courts have exonerated the former execs, and noted that Intel is upgrading its Chinese capabilities to 90-65nm production. TSMC Morris Chang added that his company’s trailing-edge sites cannot keep up with demand.

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