Giant Taiwan chip maker seeks to build factory in mainland China

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The world’s largest contract maker of computer chips has requested permission from Taiwan, where it is based, to invest in China, the company said Monday, in a project reportedly worth 3 billion US dollars.

Taiwan Semiconductor Manufacturing Company said it planned to build a wholly owned plant to make 12-inch wafers in Nanjing, China. The wafers are silicon disks that are then processed into computer chips.

“In view of the rapid growth of the Chinese semiconductor market, we have decided to establish a 12-inch wafer factory and a design service center in China to provide closer support to our customers there and to further expand our business opportunities,” TSMC chairman Morris Chang was quoted as saying.

Investments by Taiwan companies on the mainland above a certain size are regulated by Taipei amid historic tensions since the end of the Chinese war in 1949 and a lack of formal diplomatic relations.

In September, the government relaxed restrictions to allow three 12-inch wafer factories to be built in China, as long as the production technology is at least “one generation” behind that available in Taiwan.

The review of TSMC’s application will take about two months, the Ministry of Economic Affairs said Monday.

The new plant’s output would be around 20,000 of the wafers per month, the statement said. The investment would total 3 billion US dollars, the state-run Central News Agency reported.

It would start as soon as the project gets the go-ahead from the Investment Commission under the Ministry of Economic Affairs, the company said.

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