Can someone explain to me what the hell this news means? Thanks.
2nd UPDATE: Taiwan To Rule On Tech Investment In China Early 2010
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(Adds comments from Chi Mei Optoelectronics, TSMC and UMC on possible loosening of restrictions on China-bound investments.)
By Jessie Ho
Of DOW JONES NEWSWIRES
TAIPEI (Dow Jones)--Taiwan said it is inclined to ease restrictions on investments by local technology companies in China, as U.S., Japanese and South Korean firms seek to boost their share of China's rapidly growing high-tech market.
Taiwan bans its flat-panel makers from setting up manufacturing plants in China and allows chip foundries to establish less advanced facilities there, but Taipei has been loosening restrictions on investments in its political rival since President Ma Ying-jeou came to office last year on a platform to improve cross-strait relations.
The government is considering easing the restrictions on technology investments in China and may make a final decision early next year, Minister of Economic Affairs Yen-Shiang Shih said, according to a public relations official from the ministry.
The companies would still only be allowed to invest in plants that are less advanced than the ones they operate in Taiwan, and the investment amount should also be less than the amount they invest in the island, Shih said, according to the official.
Major chip makers such as Intel Corp. of the U.S. and flat-panel makers such as South Korea's Samsung Electronics Co. have or plan to build advanced factories in China.
Taiwan's AU Optronics Corp. (AUO), the world's third-largest flat-panel maker by revenue after Samsung and LG Display Co., will apply to set up its first flat-panel plant in China as soon as the government allows such investments, spokeswoman Yawen Hsiao said Monday.
"The China market is very important...we are preparing actively" for investment there, she said.
The plant would produce flat panels for televisions to meet growing demand in China, Hsiao said, without giving further details.
AU Optronics has assembly plants in China's Suzhou, Xiamen, Shanghai and Sichuan provinces. Hsiao said the company would prefer to build LCD manufacturing plants near its existing facilities in China but it hasn't come up with a final plan yet.
Smaller rival Chi Mei Optoelectronics Corp. (3009.TW) will begin planning China-bound investments after it gets official approval, said a public relations official who declined to be named.
Chi Mei has assembly plants in China's Guangdong and Zhejiang provinces.
Taiwan Semiconductor Manufacturing Co. (TSM), the world's largest contract chip maker by revenue, doesn't need to build more advanced 12-inch wafer plants in China for now, company spokesman J.H. Tzeng said.
It will consider applying more advanced chip production technologies in its plant in Shanghai if the Taiwan government allows it, he said. TSMC uses less-advanced 0.18 micron technology to make eight-inch wafers in its Shanghai plant.
TSMC's smaller rival, United Microelectronics Corp. (UMC), will apply to acquire the remaining 85% stake it doesn't already own in Chinese chipmaker HeJian Technology (Suzhou) Co. once the government eases investment restrictions, said a public relations official at the company who declined to be named.
-By Jessie Ho, Dow Jones Newswires; 88622 502-2557;
jessie.ho@dowjones.com
