Taipei, May 20, 2008 (CENS)--The Ministry of Economic Affairs (MOEA) recently approved Powertech Technology Inc.`s plan and Advanced Semiconductor Engineering Inc.`s (ASE`s) plan to fund investment projects in mainland China.

With the permission, Powertech will invest US$100 million to open a brand-new test and packaging factory in southern or central China to keep up with rising demands from memory-module maker Kingston Technology and other customers in the mainland.

ASE is ratified to put US$90 million into expanding an operating factory in Shanghai to keep it advantageous in the intensifying competition in the mainland`s test and packaging market.

Powertech Chairman T.K. Tsai pointed out his company would plow the enormous capital into the mainland to open the facility because it needs a huge manufacturing capacity in the mainland to cope with go-go demands from European and Japanese customers operating in the mainland.

Powertech is Taiwan`s No.1 test and packaging house dedicated to memory chips. It is its first application for mainland-bound investment. People familiar with the company`s investment project pointed out that the planned factory would acquire Kingston`s test and packaging factory in Shenzhen once it is completed. Kingston`s factory, named Payten, is receiving contracts from Hynix Semiconductor`s factory in Wuxi of Jiangsu Province and Powertech.

In return for the government`s green light to its investment plan, Powertech pledges to invest NT$8 billion (US$266 million at US$1:NT$30) over next few years to boost capacity at a factory in northern Taiwan, which was completed early this year, and increase 1,000 jobs.

Also, MOEA officials said Powertech planned to inject NT$20 billion (US$666 million) into Taiwan`s operations and create 2,000 jobs in next stage of its investment plan.

For ASE, the commitment as return for government permission is to put a total of US$550 million into Taiwan`s operation and increase high-ranking jobs for Taiwanese talents over next three years.

ASE put money into the Shanghai factory first time in June last year, with US$60 million. It added US$30 million to the factory in February this year. Now, it plans to inject US$90 million more into the facility. Industry watchers pointed out the world`s No.1 test and packaging house had been eager to scale up the factory`s output capacity in order to keep up with increasing orders from integrated device manufacturers (IDMs).

ASE executives pointed out the company`s deployments in the mainland had yield results, inspiring their company to put more money into its mainland operations. They said the company would use a holding company it owns in third location to bankroll the mainland factory.
(by Ken Liu)