China is strongly motivated to develop its own thin-film transistor (TFT) LCD and wafer foundry industries, and hopes it can gain production technology and managerial know-how from Taiwan. In order to please China, President Ma Ying-jeou’s (馬英九) government has decided to sign an economic cooperation framework agreement (ECFA) with Beijing as soon as possible.
Last month, restrictions on Taiwanese companies establishing TFT-LCD plants in China using 6.5 generation technology and above were relaxed. Firms were also allowed to invest in 12-inch wafer fabs and establish operations for mid to high-level integrated circuit testing and packaging.
This will spur the relocation of the two main pillars of Taiwan’s electronics industry to China. Once an ECFA is signed, Taiwan’s electronics industry will fade away and as many as 750,000 workers will face unemployment.
The only restriction the Ma administration placed on this opening up of Taiwan’s electronics sector was that the production technology for wafer fabs in China lags two generations behind Taiwan’s. While it may sound like this seeks to minimize the loss of Taiwan’s cutting-edge technology to China, it is in fact a sure way to hand over technological know-how to China.
To use the example of Taiwan Semiconductor Manufacturing Co (TSMC) and its investment in China’s Semiconductor Manufacturing International Corporation (SMIC), SMIC has announced that it has already started using 45 nanometer process technology like TSMC does, so does this mean that TSMC will not be allowed to invest in SMIC in future?
In addition, there is a two-generation gap between Taiwan’s United Microelectronics Corp (UMC) and China’s Hejian Technology, which UMC wishes to acquire.
If this happens and Hejian increases its production technology to the same level as UMC’s, does that mean UMC will have to pull out of Hejian? Of course it won’t. So in reality, the two-generation gap in technology is just to dupe the public.
Many have stated that once an ECFA takes effect, trade tariffs between Taiwan and China will drop sharply. However, cutting tariffs will not be beneficial to Taiwan’s exports of electronic components to China because most electronics products now exported from Taiwan to China, like semiconductors, are already almost tariff-free. The average rate is 0.58 percent.
That means Taiwanese businesses will not lose much at all if an ECFA isn’t signed, while the passage of an ECFA would not really help them expand their business in China.
Even more worrying is that once an ECFA is signed, Taiwanese businesses will be able to invest even more in China’s high-tech industry than they do now. Because of industrial clustering, middle and upstream LCD and IC manufacturers will make big moves into China. For example, when Taiwan’s PC and notebook businesses were allowed to start production in China in the 1990s, manufacturers quickly moved to China. This caused the loss of hundreds of thousands of jobs in Taiwan.
The IC design industry has the highest value-added industry in Taiwan, so inevitably design development and staff will flow to China, causing the gradual death of the domestic electronics industry.
The knowledge and experience accumulated by Taiwan’s electronics sector will cease to exist here. What industries will we be left with to provide employment in Taiwan and what sort of production technology will allow us to engage in high value-added industries?
Chien Yao-tang is a member of Taiwan Thinktank.
TRANSLATED BY DREW CAMERON
After nine days of holidays for the Lunar New Year, government agencies and companies are to reopen for operations today, including the Legislative Yuan. Many civic groups are expected to submit their recall petitions this week, aimed at removing many Chinese Nationalist Party (KMT) lawmakers from their seats. Since December last year, the KMT and Taiwan People’s Party (TPP) passed three controversial bills to paralyze the Constitutional Court, alter budgetary allocations and make recalling elected officials more difficult by raising the threshold. The amendments aroused public concern and discontent, sparking calls to recall KMT legislators. After KMT and TPP legislators again
Taiwan faces complex challenges like other Asia-Pacific nations, including demographic decline, income inequality and climate change. In fact, its challenges might be even more pressing. The nation struggles with rising income inequality, declining birthrates and soaring housing costs while simultaneously navigating intensifying global competition among major powers. To remain competitive in the global talent market, Taiwan has been working to create a more welcoming environment and legal framework for foreign professionals. One of the most significant steps in this direction was the enactment of the Act for the Recruitment and Employment of Foreign Professionals (外國專業人才延攬及僱用法) in 2018. Subsequent amendments in
US President Donald Trump on Saturday signed orders to impose tariffs on Canada, Mexico and China effective from today. Trump decided to slap 25 percent tariffs on goods from Mexico and Canada as well as 10 percent on those coming from China, but would only impose a 10 percent tariff on Canadian energy products, including oil and electricity. Canada and Mexico on Sunday quickly responded with retaliatory tariffs against the US, while countermeasures from China are expected soon. Nevertheless, Trump announced yesterday to delay tariffs on Mexico and Canada for a month and said he would hold further talks with
In competitive sports, the narrative surrounding transgender athletes is often clouded by misconceptions and prejudices. Critics sometimes accuse transgender athletes of “gaming the system” to gain an unfair advantage, perpetuating the stereotype that their participation undermines the integrity of competition. However, this perspective not only ignores the rigorous efforts transgender athletes invest to meet eligibility standards, but also devalues their personal and athletic achievements. Understanding the gap between these stereotypes and the reality of individual efforts requires a deeper examination of societal bias and the challenges transgender athletes face. One of the most pervasive arguments against the inclusion of transgender athletes
RSS