Taipei, July 11, 2008 (CENS)--In view of the permission by the U.S. government for Intel to set up 12-inch wafer plant featuring 90 or even 60 nanometer technology, the government should further liberalize investments by local IC makers in China, said President Ma Ying-jeou yesterday (July 10).

Ma made the remark when receiving Mike Splinter, president of Applied Materials Inc., at the Presidential Office, noting that the U.S. government`s decision is significant, since the U.S. is the principal nation for the Wassenaar Arrangement, an agreement among more than three dozen states controlling exports of arms-related goods and technology.

In response, Yiin Chii-min, economics minister, confirmed that the Ministry of Economic Affairs (MOEA) is evaluating further relaxation of the restrictions on investments by semiconductor makers in China, under the two principles of conforming to international practice and control of key technologies.

He remarked, though, that it`s unlikely for domestic semiconductor makers to set up 12-inch wafer fabs in China at the present stage, even if the government allows them to do so, due to low returns, as China lacks a complete industrial environment spanning the up-, mid-, and downstream sectors, as the situation in Taiwan.

Yiin refers to Intel`s policy of maintaining two-generation lead for its domestic operation over its Chinese plant in Dalian, now under construction, which will embrace 90-nanometer technology, compared with 45-nanometer technology for its U.S. plant now, which will advance to 30 nanometer when the Dalian plant inaugurates its production.

At present, the government allows domestic semiconductor makers to set up 8-inch wafer fabs featuring 0.18-micron technology in China and the MOEA is reportedly studying the feasibility to upgrade the technology to 0.13-micron level or even 90 nanometer at a later stage, the latter of which will necessitates the permission for setting up 12-inch wafer fabs.

Presently, two domestic semiconductors, Taiwan Semiconductor Manufacturing Corp. (TSMC) and ProMos Technologies, have established one 8-inch wafer fab each in China. TSMC`s Songjiang plant in Shanghai is turning out 40,000 pieces per month and incurred NT$520 million of loss in the first quarter this year. ProMos`s plant in Chongqing, with monthly capacity of 80,000 pieces, just launched operation this month.

(by Philip Liu)