TSMC hopes to build wafer fab in mainland China
By Faith Hung
EBN
(08/27/01 12:34 p.m. EST)
HSINCHU, Taiwan --Taiwan Semiconductor Manufacturing Co., the world's No.1 pure-play silicon foundry, would be ready to launch its first operations in China if the Taiwanese government gave its permission, according to company chairman Morris Chang.
In an economic development advisory conference hosted by Taiwan's President Chen Shui-bian, Chang said that “the time is coming very soon” for TSMC to start investments in China. The remarks of Chang, widely respected as the chief architect of Taiwan's IC industry, come just weeks after he reiterated TSMC has no plans to invest in China over the next three to five years.
TSMC has been feeling the heat of competition from multinationals like NEC Corp., Motorola Inc. and many others, which have built wafer facilities or set up joint ventures in the surging Chinese market. TSMC's closest rival, United Microelectronics Corp., has also begun to explore opportunities on the mainland.
“China offers not only tax incentives, but high-tech personnel, land, water, electricity, and above all, a huge market,” Chang told members of the conference, which was designed to help bolster the island's ailing economy. “Even if we don't use these resources, our competitors will, undermining TSMC's leading edge.”
Hsinchu-based UMC has decided to have a subsidiary team up with Taiwan's Hon Hai Precision Industry Co. to make cell phone components in Beijing, UMC chairman Robert Tsao told reporters last week. In addition, Tsao recently said that UMC is in talks with Shanghai Belling Corp. to sell 200 mm wafer equipment to the Chinese company. In June, Tsao and his vice chairmen visited Shanghai for a “fact-finding” trip.
Mainland China is a market that TSMC, UMC or any other chipmakers can't afford to miss. There are about 14 fabs under construction or about to break ground in China. Semiconductor Manufacturing International Co. and Grace Semiconductor Manufacturing Co. both own fabs in China, analysts said. The presidents of SMIC and GSMC are an engineer and an entrepreneur from Taiwan, respectively.
“China has great potential to become a market as big as the U.S.,” said Rick Hsu, a senior analyst with Nomura Securities Co. in Taipei. “If TSMC and UMC don't get started soon, they would have a big price to pay years down the road.”
TSMC's Chang didn't give a timetable for the Chinese investment or in what form the investment will take place, saying "these depend on the (Taiwan) government's attitude."
UMC is taking the same approach. “Everything we do will meet the requirements of the government,” said an official, who asked for anonymity.
As TSMC and UMC are trying not to offend the Taiwanese authorities, they certainly hope Taiwan will soon ease its restrictions on local companies, allowing them to build wafer fabs on the mainland.
A global recession in the IC industry sent TSMC's profit in the June quarter plunging 98% to $8.97 million from a year ago. UMC lost $53.7 million over the same period. |
