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Government restrictions dampen PSC’s enthusiasm for China investment
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Old 23rd December 2005, 12:24   #1
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Default Government restrictions dampen PSC’s enthusiasm for China investment

Hans Wu, Taipei; Esther Lam, [Friday 23 December 2005]

With Powerchip Semiconductor Corporation (PSC) scheduling a very aggressive 12-inch fab construction roadmap, the Taiwan-based memory maker has expressed disappointment with the local Taiwan’s government’s restrictions on investing in China.

Currently, Taiwan memory makers are only allowed to invest in production down to 0.25-micron node – although the government is currently reviewing investment on 0.18-micron production. Although PSC has applied for permission to build an 8-inch fab in China, with the PSC board approving the investment last year, the application has not yet been approved by the Taiwan government authorities. In the mean time, PSC is shifting its focus to 12-inch fab production, industry observers noted.

According to company chairman Frank Huang, as cited by the Chinese-language Economic Daily News (EDN), it makes no sense for PSC to do unprofitable business in China. Huang stressed that even the easing of restrictions proposed by the Taiwan government trails far behind market trends, as some Taiwan chipmaker are already producing on 90nm process technology. Even if its application is approved by the goverment, PSC would not move forward immediately if the allowable process node is not reduced to sub-0.18-micron., Huang said.

PSC has also applied to construct two 12-inch wafer fabs in the Central Taiwan Science Park (CTSP), and sourced stated that Taiwan’s National Science Council approved the investment on December 20. However, PSC vice president and spokesman Eric Tang stated the company has not yet received any notification from the authority.

Total capacity at these two new 12-inch fabs should total 80,000-90,000 12-inch wafers per month, Tang noted. PSC expects construction at its third 12-inch fab will commence in the first quarter of 2006, with volume production to follow in mid 2007.

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