TAIPEI, Taiwan -- After months of delay, Taiwan's government has finally lifted a ban on 200mm wafer investments in China, although with several conditions.
Taiwan's government will let semiconductor companies build a total of three fabs before 2005 using current-generation production equipment, Premier Yu Shyi-kun said at a press conference late tonight. Facilities will not be allowed to install newer manufacturing equipment for at least two years from now, he added.
Chipmakers that intend to apply must upgrade their technology in Taiwan and reach volume production in their 300mm wafer plants, said the premier.
"It's the future trend for foundries to compete in the Chinese market," Yu said. "We want to make sure core technologies won't be transferred to China, while Taiwan companies can compete with global rivals on a fair basis. We want to develop Taiwan into a center of 12-inch wafer production as well as IC design."
The premier's remarks were aimed at foundry service providers Taiwan Semiconductor Manufacturing Co. and United Microelectronics Corp. Both companies are anxious to tap the Chinese market, which TSMC chairman Morris Chang predicted yesterday "will grow 20% in the next 20 years."
TSMC and UMC are the world's biggest pure-play foundries, holding about two-thirds market share. Taiwan is also the No.4 DRAM maker in terms of output, with major players such as ProMos Technologies contract manufacturing DRAM for Infineon Technologies AG and Powerchip Semiconductor Corp. producing chips for Mitsubishi Electric Corp.
Both TSMC and UMC already have 300mm wafer fabs in Taiwan making thousands of wafers per month.
The island's government will set up a committee to monitor the flow of technology to China, said the premier, adding that approval for removing the ban is subject to a legislative session scheduled for May.
The government postponed making any decision for months in part because opponents cited national security as a major concern. For more than five decades, Beijing has seen Taiwan as a breakaway province and has threatened to use force if necessary to bring about reunification.