The economics ministry has approved a leading chipmaker’s application to invest in a Chinese company to make 12-inch wafers.
The chipmaker, the United Microelectronics Corporation (UMC), is planning to invest 710 million US dollars in the company located in Xiamen, Fujian province.
The opposition Taiwan Solidarity Union has questioned the investment project, saying that it could result in the transfer of key technologies to China.
But Vice Economics Minister Jong-chin Shen said on Tuesday that concerns over the transfer of technology are not valid because the technology in question is a bit outdated.
“The most advanced technology that Taiwan’s main competitors are investing in China is the so-called 12-inch fab using 14 nanos," said Shen.
"But the best technological know-how UMC has is 28 nanos. The UMC is allowed to invest in China using only 40 to 55 nanos."
Shen said if the government did not approve the application, Taiwan’s industry would lose its competitive edge.