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TSMC's China plan a must do: vice premier

TSMC's China plan a must do: vice premier

Vice Premier Chang San-cheng said Tuesday that a proposal by Taiwan Semiconductor Manufacturing Co. (TSMC) to set up a 12-inch wafer plant in China is a must do for the world's largest contract chip maker.

TSMC has to establish a 12-inch wafer plant in China now or it would be hard for non-Chinese IC suppliers to sell their products there in the future, Chang said, noting that China is aiming to produce 40 percent of its own integrated circuit demand by 2020, and 70 percent by 2025.

TSMC said Monday that it had applied to the Taiwan government for approval to set up a 12-inch wafer plant in Nanjing, Jiangsu Province, and will fully fund the US$3 billion project if it is approved.

Pending approval, TSMC said, the Nanjing plant will begin commercial operation in the second half of 2018, with a production capacity of 20,000 units per month on the advanced 16 nanometer process, which it launched commercially in Taiwan in the third quarter of this year.

The government said Monday that it will take two months to review TSMC's application. Taiwan government regulations allow a maximum of three 12-inch wafer plants in China, but TSMC does not have any there, as all three of its 12-inch plants are located in Taiwan, producing 700,000 to 800,000 units per month.

However, TSMC has one 8-inch wafer plant in Songshan, Shanghai. Lin Po-feng, head of the Chinese National Association of Industry and Commerce, said TSMC's move to operate a 12-inch wafer plant in China has come somewhat late but the company has no choice but to invest in the huge China market as part of its global expansion strategy.

Overseas investment is already an irreversible trend in Taiwan amid uncertainty over the political situation, and electricity and labor supply, Lin said.

Meanwhile, market analysts said TSMC's planned 12-inch wafer plant in China will pose a direct threat to its Chinese competitors, in particular Semiconductor Manufacturing International Corp. (SMIC) and Shanghai Huali Microelectronics Corp., eroding their market share.

Following TSMC's announcement of its plan to set up a 12-inch wafer plant in China, its shares remained resilient on the Taiwan Stock Exchange, slipping only 0.70 percent to close at NT$142.50 Tuesday, while the weighted index ended down 1.31 percent. (By Jackson Chang, Yang Shu-min, Lin Meng-ju and Frances Huang)

Updated : 2021-09-28 19:52 GMT+08:00