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Looser rules not seen as spurring capital flight

Looser rules not seen as spurring capital flight

Minister of Economic Affairs Steve Ruey-long Chen said yesterday that there is "no need to worry" about capital flight after the easing of restrictions on local chipmakers investing in China.
Chen made the remarks after former President Lee Teng-hui (李登輝) expressed opposition earlier in the day to the ministry's announcement Friday that it would allow 8-inch wafer manufacturers to move their 0.18-micron manufacturing technology to China. Lee also disapproved of calls by local businessmen for the lifting of a 40-percent cap on investment in China, claiming that Taiwan will be left with no competitive edge, with no investment and all businesses gone.
"There should not be any misgivings about capital flight after the easing of the restrictions, " Chen claimed, adding that Taiwan's wafer manufacturing technology has the capacity to continue to maintain its dominant position.
Chen explained that related government agencies have discussed the relaxation over the past few months, believing that an easing will be in line with the nation's economic interests and the needs of the future development of the semiconductor sector. Taiwan currently only allows the transfer of 0.25-micron or larger processes to China.
Addressing the former president's misgiving about capital flight, Chen said that Taiwan manufacturers have already tested the 45-nano manufacturing process and lead the technology by two or three generations.
They will be able to solicit more business opportunities in China as well as continue to invest in Taiwan, Chen said.
Still investing in Taiwan
Local wafer manufacturers should put their limited resources into high-level technology, such as 12-inch wafers, 90-nano and 65-nano manufacturing process technology.
Through upgrading the technology, Taiwan's production value will increase this year, Chen predicted.
As for the lifting of the 40-percent investment cap, Chen said no decision had been made.
Premier Su Tseng-chang (蘇貞昌) yesterday also defended his Cabinet's decision to allow Taiwanese chipmakers with factories in China to make more advanced chips than they currently produce.
Su was rebuffing critics who have said that upgrading production at Chinese plants could result in China, Taiwan's political rival, getting its hands on the advanced technologies involved.
Switching to 0.18 micron technology means that manufacturers can squeeze more electronic components onto a chip, giving computers more computing power while requiring less energy.
Su said the change will help Taiwanese chipmakers better compete in China and overseas.
Taiwan chipmakers already produce even more advanced 0.09 micron chips domestically, but moving 0.18 micron production facilities to the mainland would help Taiwanese companies reduce costs.
"Taiwanese companies can keep their roots in Taiwan and do business all over the world," Su told reporters.
Supporters of closer economic relations with China faulted Su for being too slow.
"The step to open up is right, but it's a bit too late," said Ma Ying-jeou (馬英九), the leader of the main opposition Nationalists.
The world's biggest contract chipmaker by revenue, Taiwan Semiconductor Manufacturing Co., which had applied for use of the more advanced technology at its mainland China plant, welcomed the approval Friday.


Updated : 2020-11-30 04:45 GMT+08:00