DPP's Tsai against lifting chip tech ban on China

Chipmaking is not only an important industry, but also a “highly strategic” industry for Taiwan, said Tsai Ing-wen, chairwoman of the Democratic Progressive Party (DPP).

“The evaluation of the issue must be conducted carefully, and no presumptions should be made,” she said.

Without careful planning or letting the nation fully understand the issue, a change of policy to allow chipmakers to set up 12-inch fabs in China would spark “a huge controversy” in society, Tsai claimed.

Asked if the DPP would launch protest campaigns against the move towards relaxing the 12-inch fab ban, Tsai said it depends on how the government would be handling the case.

“This is a very serious matter,” she warned.

President Ma Ying-jeou on Friday told Michael Splinter, chairman of U.S.-based Applied Materials, during a meeting in Taipei that the government does not rule out letting Taiwan semiconductor firms build 12-inch wafer fabs in China.

Taiwan is well known for its semiconductor industry, which the government has been tightly guarding as one of the pillars of the nation's economy.

Currently Taiwan makers are only allowed to invest in 8-inch wafer fabs in China, with the technology level no more advanced than the 0.18-micron processes.

Building integrated circuits (IC) on 12-inch wafers using more advanced processes is more cost-efficient, but it is more technologically demanding.

While many chipmakers in Taiwan are already operating 12-inch fabs and have migrated to nanometer processes, few of their competitors in China have been able to do so.

The Taiwan government's ban on exporting such advanced semiconductor technologies to China is a measure against helping it build up its competitiveness too much, which would in turn undermine the business of the companies on the island.

The pro-independence camp, which generally cautions against over-reliant economic relations with China, is eager to see the semiconductor ban stay put.

But many industry players argue that the ban is actually undermining their competitiveness in the China market, urging the government to ease the restrictions.

The Ministry of Economic Affairs (MOEA) will evaluate the wafer ban during a review in July of existing restrictions on China-bound investment by Taiwanese businesses, an official has said.

Woody Duh, head of the ministry's Industrial Development Bureau, said the government will observe the Wassenaar Arrangement on Export Controls for Conventional Arms and Dual-Use Goods and Technologies while dealing with the issue.

The multilateral arrangement, introduced in 1996, is to ensure that transfers of these items do not contribute to the development or enhancement of military capabilities that undermine regional and international security and stability.

The arrangement does not restrict the export of 0.18-micron chipmaking technologies but requires participating states to decide on a case-by-case basis whether to allow the export of technologies using processes smaller than 0.18 microns.

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