Hi DJ, I do not like chips, Taiwan corporate governance (TMSC is better than most), China deal heat, death level discount business, and I do not like companies needing to raise money for mega investments. TMSC is worth a punt later, not now, and only a punt, not a "bet the ranch", but you know that. Chugs, Jay
china.scmp.com
QUOTE
Tuesday, September 4, 2001
Taiwan firm sees China as global chip centre
REUTERS
Taiwan's largest chip maker, Taiwan Semiconductor Manufacturing Company (TSMC), said on Tuesday that the island's political rival, China, would be the centre of world microchip manufacturing in the next decade and urged local firms to take part in its rise.
"I believe that in the next 10 years, in terms of the speed of plant construction, the mainland will be ahead of every other area," said Morris Chang, TSMC chairman.
Mr Chang, who heads the world's biggest contract chip maker or semiconductor foundry, was making his strongest comments in favour of investing in China's chip industry since an abrupt change of tone two weeks ago.
"If we don't go, or if the government doesn't let us go, they can find other countries," to help, Mr Chang told a technology forum held by Taiwan chip designer VIA Technologies. "Taiwan's strategy for coping should be active participation."
A different tune
Mr Chang had always emphasised the immaturity of China's semiconductor environment instead of its potential, when questioned about the issue as recently as June.
However, Mr Chang was instrumental in changing the government's principle on China investment to "aggressive opening" from "no haste, be patient" at a high-profile August 24-26 conference to advise the state on reviving economic growth.
He also said his company would invest in China "quickly" if Taiwan lifted trade and investment restrictions.
TSMC's Taiwan-listed shares ended up T$2.00, or 3.1 per cent, at T$66.00 on Tuesday, while the broad TAIEX share index gained 0.87 per cent.
Wary of economic dependence on a political opponent, Taiwan forbids strategic industries such as semiconductors, defence and infrastructure from setting up plants in China.
China considers self-governing, democratic Taiwan a breakaway province to eventually be reunified, by force if necessary.
However, cheap labour, a giant market and a common language and culture have led Taiwan firms - mostly light industries like toys, textiles and food processing - to invest a conservatively estimated US$60 billion on the mainland since rapprochement began in late 1980s.
Voice of experience
TSMC has only announced baby steps towards China so far. The company only revealed plans to set up a permanent mainland sales office last week, and it is in the midst of studying the feasibility of building plants there - a move it said was three to five years away at the earliest.
But Mr Chang, a veteran of the electronics business since 1958, said the centre of chip making was making its third move since shifting from the United States to Japan in the 1980s, and to Korea, Taiwan and Singapore in the 1990s.
Mr Chang argued that not only was China's rise in the historically fast-growing semiconductor business a sound choice for its economic development, it was unstoppable.
Taiwan could benefit both itself and China by cashing in on the production boom and also prevent a rogue elephant from emerging in the microchip industry, he said.
"If we let them do it themselves, they will develop a semiconductor industry, but it will not make money, and it will be marginalised," Mr Chang said.
"They will have a lot of capacity and low costs, but without Taiwan's experience, they will become a troublemaker in the market."
While China has only a handful of semiconductor plants using technologies that are rapidly becoming outdated, a host of companies have announced plans to build microchip fabrication facilities.
Two Taiwan entrepreneurs are in the vanguard of firms building some of China's most advanced semiconductor fabs in separate government-back projects in Shanghai.
UNQUOTE |
