Economics Minister John Deng told legislators on Thursday that the investments of Taiwanese hi-tech companies in China are strictly regulated by the government. However, he said that TSMC’s application will be approved if cutting-edge Taiwanese technology is protected and the new plant’s production process is at least one generation older than the one used in Taiwan. Deng said that TSMC will also be required to invest domestically.
In the face of the rising “red supply chain” in China, Deng said the local IC industry has no choice but to enter the Chinese market. Deng urged TSMC to seek its own business opportunities in China rather than being taken over completely by South Korean and Chinese chip makers.
The economics minister called TSMC’s investment project in China an “expansion rather than a shrinking of Taiwan’s economic clout.” He said that’s because TSMC’s competitiveness and R&D has been recognized by the global community.
It will take the Investment Commission about two months to review and approve TSMC’s application. China has set a clear goal to produce enough IC chips to meet 40% of domestic demand by 2020, and 70% of domestic demand by 2025. It is generally believed that TSMC has to establish a presence in the Chinese market now before it is too late to do so.
Founded in 1987 by Morris Chang, TSMC is the world's oldest and largest semiconductor foundry. The company's total managed capacity reached 16.4 million 8-inch equivalent wafers in 2013. In 2013, the company held a global market share of 46%.
TSMC is listed on the Taiwan Stock Exchange (TWSE) and its American Depositary Shares trade on the New York Stock Exchange (NYSE) under the symbol "TSM".