The government yesterday formally gave the green light to Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) to relocate the chipmaker's low-tech eight-inch wafer facilities to Shanghai, a government official said.
"TSMC will be able to obtain official permission in two weeks," Minister of Economic Affairs Lin Yi-fu (
"We concluded that the migration will not hurt the development of the nation's high-tech industry and labor market," Lin said. "Furthermore, the company's investment plan is reasonable."
With government approval, the world's biggest made-to-order chipmaker became the first local chipmaker to build a factory in China.
The company's investment plan, proposed in late 2002, made an important stride last week after the ministry's Investment Commission agreed that the company has reached the minimum required production capacity at its advanced 12-inch wafer plants for six months in a row with a production rate at 90 percent capacity -- which is a prerequisite to obtain final official permission.
The second push is TSMC's labor policy, Lin said, citing TSMC's proposal which says benefits of its current employees will not be affected by the plan.
Lin also dismissed concern over the outflow of local high-tech talent, saying that, among the 166 staff members of TSMC's Shanghai factory, only 22 were Taiwanese, while another 100 local technicians will still be based in Taiwan to provide support to the Chinese subsidiary.
TSMC's investment plan, which indicates that the company plans to remit US$371 million -- including US$56 million that was remitted previously -- out of a total investment of US$898 million in three years, seemed quite reasonable to people at the meeting, Lin added.
TSMC welcomed the government's final approval of its plan yesterday.
"We're glad to hear about the approval," chairman Morris Chang (張忠謀) told reporters after an investors' conference held in Hsinchu yesterday. "Next, we're preparing to move the equipment over."
As TSMC enjoyed its long-awaited victory, downstream package-and-testing companies, whose associations also applied for such permission, however, will need to wait as the ministry's Industrial Development Bureau is still evaluating the proposal, Lin said.
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