Analysis on Taiwan Authorities' Chipmaking 'Lift'

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Last updated at: (Beijing Time) Friday, April 05, 2002

Analysis on Taiwan Authorities' Chipmaking 'Lift'

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People lately saw out at long last the Taiwan authorities with a go-ahead to "lift" its ban on using 8-inch wafers to invest on the mainland. But with this "go-ahead" is nothing but many unexpected restrictions to pour a bucket of cold water on Taiwan investors aspiring for chip undertakings on the mainland. People cannot but help to ask: Is this "lift" a new form following the old rut of "no hurry, be patient" developed?

As things are now in Taiwan, "lift" must be on a small scale restricting investors using 8-inch wafers to develop on the mainland when "effective management measures" are used. Before 2005, as ruled by the authorities, Taiwan chipmakers would be allowed to build chip plants using 8-inch wafers on the mainland only after their homegrown plants had undertaken mass production of 12-inch wafers for six months in Taiwan. Public opinion holds that the authorities nominally dish out a "lift" on plants using 8-inch wafers to undertake production on the mainland but in actuality it enforces an "order of martial law" in the way "effective management" becomes "effective restraint" and a changed form of "blockade".

Last August, since Taiwan's "Council for Economic Planning and Development" put forward "active opening, effective management" in the place of "no hurry, be patient" semiconductor makers in Taiwan had become most anxious to call for a "lift" on developing 8-inch wafer production on the mainland. But a handful of "Taiwan independence" forces have tried every effort to obstruct this and prevent Taiwan chipmakers from developing wafer production on the mainland.

We should say Taiwan chipmakers seeking development on the mainland are fully justified. This is due to the fact that the world's largest growing semiconductor market is found on the mainland with a market demand for as many as 17 billion chips by 2005. Chip production is just at a developing stage on the mainland and most chips to be used are relying on imports. There must be the opportune time for Taiwan's semiconductor manufacturers for a greater market share and expanded semiconductor production on the mainland.

To miss this there will be no sound market growth of enterprises as for those chipmakers in Taiwan. An early effort to seize on time and lose no opportunities will help compete and win greater market share on such a huge market as on the mainland. When things should go the other way round, "you are certainly to surrender the take-off mainland market" to other competitors and to the frustration of Taiwan chipmakers there will be no "upper hand" for them to go in for hi-tech research and production.

Obstacles have been set by Taiwan authorities with its "lift" on Taiwan chipmakers trying to invest in 8-inch wafer production on the mainland for "criminal procedures" are to be quoted as deterrence to "law breaking". Things are too all clear to Taiwan chipmakers that 8-inch technology is no exclusive proprietary possession to them. A missing step to follow the forward march of investment on the mainland would equally mean to lose a step in competition with international manufacturers.

As things are generally known, "lift" on 8-inch wafer production on the mainland must be a matter within the context of economy from a professional point of view. Things should be run according to the law of nature. But the Taiwan authorities simply turn it into a problem of "ideology", politicizes it and is ready at any time to label chipmakers as elements "endangering security" and "betrayer of Taiwan". Promulgation of policies for a "lift" just shows that the Taiwan authorities do not care about the future of Taiwan. Such an "investment environment" is certainly in a way to make one sick at heart.

Putting it bluntly, to invest in 8-inch production on the mainland must closely concern Taiwan's development and the interests of no others but Taiwan investors. In Taiwan there are altogether 23 8-inch wafer plants and of these 25 percent have already laid off for a saturated market. In contrast, on the mainland a huge market is presented, with a multitude of orders placed. There will be augured vast market potential and enhanced competitive power instead of being "marginalized" for Taiwan chipmakers.

Should Taiwan authorities want to "upgrade and develop" Taiwan's economy they must in no way set up obstacles in the course of economic exchanges and cooperation across the Taiwan Straits. Poet Xin Qiji put it well in two of his famous lines back during the Song time (960-1279): There is no way to block the towering sights of green mountains for the water of rivers always flows east". It is time for the Taiwan authorities to think trice before acting.

By People's Daily Online

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