Taiwan to allow three chip makers into China
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(InfoWorld) - In the most significant easing of investment regulations for Taiwan's technology industry to date, the island's government will allow two chip makers to build factories in China and one more to invest in a Chinese rival, a high level official said Tuesday. Memory chip makers Powerchip Semiconductor and ProMOS Technologies will both be allowed to build chip factories in China, while Advanced Semiconductor EngineeringÂ (ASE) will receive approvalÂ for a plan toÂ buy a low-end chip assembly companyÂ based in Shanghai. ASE is the world's largest chip assembly company. "An official announcement will be made on Wednesday," said Joseph Wu, chairman of the Mainland Affairs Council, Taiwan's official governing body for China relations. A group of government agencies agreed to the easing Monday during a committee meeting. The final step in making the decision formal is for the Taiwan Investment Commission, which is in charge of vetting China-bound investment applications, to give its stamp of approval and publicly announce the new measures. The easing is seen as a major breakthrough for Taiwan and China. For China, it could reinvigorate a chip industry that has slowed over the past few years as major chip makers such as Semiconductor Manufacturing International Corp. (SMIC) posted a string of money-losing quarters. It also represents a token of goodwill by Taiwan to political enemy China. Taiwan and China remain enemies after splitting in 1949 amid civil war. The island fears China could use chip technology to bolster its military capabilities against Taiwan. Despite the strained relationship and tough investment rules, China remains by far the favored destination for Taiwanese investment due to their shared language and culture, and China's lower costs and huge potential market. The formal announcement expected Wednesday will likely fall short of hopes held by Taiwanese chip makers. Companies have been lobbying the government for years to allow them to transfer 0.18 micron chip production technology to China, but such an opening will have to wait, Wu said. Taiwan Semiconductor Manufacturing Co. (TSMC) has made a strong push on the 0.18 micron issue, in part because Chinese rivals such as SMIC are already using the technology, and are able to win over customers because of it. Taiwanese regulations currently only allow its chip makers to use 0.25 micron technology in China. ASE's board of directors approved a plan to last month to invest $60 million in Global Advanced Packaging Technology, a Shanghai company.
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(InfoWorld) - One of Europe's largest chip makers is teaming up with Taiwan's biggest chip packaging and testing company on a joint venture in China, despiteÂ strict regulations regarding chip-related investmentsÂ on the part of Taiwan. NXP Semiconductors, the former chip division of Koninklijke Philips Electronics, and Advanced Semiconductor Engineering (ASE) on Friday said they signed a memorandum of understanding to form a joint chip packaging and testing venture in Suzhou, China. ASE will take a 60 percent stake in the venture, while NXP will hold the remaining 40 percent. The companies said the deal will only go through if it meets regulatory approval, but they indicated that the Chinese and Taiwanese governments have been cooperative. "We're pleased to be able to strengthen our relationship with ASE through the formation of this JV and appreciate the willingness of governments to help in this regard," said Ajit Manocha, chief manufacturing officer at NXP, in a statement. Taiwan and China remain enemies after splitting in 1949 amid civil war. The islandÂ heavily regulates China-bound chip investmentÂ over fears China could use the technology to bolster its military. Chip makers on the island find the rules a hindrance. But despite the strained relationship, China remains the favored destination for Taiwanese investment due to their shared language and culture, as well as China's lower costs and incentives for building factories. Â
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The top executive at Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), the world&#39;s biggest contract chipmaker, offered a mixed message Thursday about prospects for the global chip industry in 2008.Speaking at the company&#39;s third quarter investor conference, President and CEO Rick Tsai predicted that the chip industry will strengthen in 2008, but he also said TSMC will spend &quot;significantly less&quot; on new plants and equipment next year.TSMC announced net sales of NT$88.96 billion&#160;(US$2.73 billion) for the July to September period, up nearly 8 percent over the same time last year. Its net profit fell 6.5 percent to NT$30.37 billion, nearly in line with analyst&#39;s expectations.&quot;The third quarter was better than expected, not just for TSMC, but for the whole electronics industry,&quot; Tsai said. Sales of chips to the PC sector, mobile phone segment and consumer electronics products group were all brisk, he said.But many analysts considered TSMC&#39;s forecast to be more important than its third-quarter results. That&#39;s because of&#160;uncertainty about economic growth in the U.S.&#160;due to the housing loan problems there, high oil prices, and other troubles that could ultimately impact spending on electronics.TSMC is considered a&#160;bellwether for the tech industry&#160;because of the wide range of chips it manufactures, which end up in products including Xbox 360s, iPhones, PCs, and automobiles.&quot;We&#39;re expecting 2008 to be a better year than 2007 for the semiconductor industry,&quot; Tsai said. The chip industry will grow by a mid-to-high single digit percentage in 2008, the company forecast, compared to expected growth of 4 percent in 2007.Despite the rosy outlook, TSMC will reduce its 2008 capital spending from the expected US$2.6 billion in 2007. Spending cuts often indicate that a company isn&#39;t very bullish about business prospects, but TSMC said it wants to reduce spending next year because it spent heavily on production lines in 2007 that won&#39;t begin producing chips until next year.The change in spending plans is significant, said Eric Chen, research director at BNP Paribas Securities (Taiwan). If TSMC&#39;s capital spending drops by about 30 percent, as many analysts have predicted, it won&#39;t be a surprise, he said. But if the company reduces spending by a lot more, it suggests that TSMC may be more concerned about future economic growth than it is letting on.Tsai said TSMC hasn&#39;t determined a specific figure yet for its 2008 capital spending.BNP believes Europe and the U.S. may both face slowing economic growth next year.
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(InfoWorld) - Chinese companies will be welcome to exhibit at Taiwan's annual Computex IT next year, the show's organizers said Saturday. The announcement came as organizers revealed a 10 percent increase in the number of foreign visitors at this year's show compared to last year. About 33,000 visitors from overseas attended this year's fair versus 30,275 last year, said Walter Yeh, executive vice president of the Taiwan External Trade Development Council, at a Taipei news conference held as the fair ended its five-day run. Local visitor numbers saw a more modest increase from 100,177 last year to around 103,000 this year, he said. Both figures were a little above organizer targets. The rise in visitor numbers is impressive given the weather that Taipei has been experiencing this week. The usually hot and humid weather seen during early June was replaced this year by day after day of torrential rain that has caused deadly landslides elsewhere on the island. "We will make good arrangements with heaven," Yeh said of Computex 2008. Next year's show will see exhibitors split between the four exhibition halls that currently house the expo and a new center some distance away. Organizers hope to arrange shuttle buses to take people between the sites and estimate it will take 15 minutes -- a possibly optimistic goal given anecdotal journey times this week of around 30 minutes. The organizers are yet to decide how they will split the show but promise the new space will mean next year's show will see around 4,500 booths versus the 2,926 at Computex 2007. Yeh said the show this year had waiting list about 500 companies long, so Computex 2008 should not only mean they are welcome but will also signal the opening of the show's doors to companies from China. Until now, Chinese companies have not been welcome at the Taiwanese show due to space issues, said Yeh. "We don't have enough space, but next year, we will have space," he said. "Some of their best manufacturers can be here, we will welcome them." Yeh added he is confident that Chinese companies will appear at Computex 2008. China and Taiwan separated in 1949 during a civil war between the Nationalist army of Chiang Kai-shek and the Communist forces of Mao Zedong. The two sides never reconciled, and China has repeatedly threatened to attack Taiwan if the island formally declares independence from the mainland.
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(InfoWorld) - Taiwan issued a warning to local companies not to export electronics components and other items that could be used to make military equipment to Iran or North Korea, promising penalties for failure to comply. "We have had a few cases recently where customs officials have caught sensitive products that were to be exported, and told the companies that they needed to gain permission to export such items to these countries. None of those items got past customs," said James Wu, deputy director general of Taiwan's Bureau of Foreign Trade. It's an important reminder for Taiwanese companies because the island is one of the world's largest suppliers of high tech components such as semiconductors and PC parts, including DRAM (dynamic RAM) and motherboards, as well as precision tools. Taiwanese companies also engage in trade with North Korea, Iran, and other countries deemed high risk for the export of certain items that can be used to make military hardware. The government sent out a statement to companies and posted a notice on its Web site as a reminder that certain electronic components, chemicals, and machine tools can be used to make weapons, and therefore cannot be exported to North Korea and Iran. The list of controlled items includes consumer electronics devices such as computers, laser printers, optical disc drives, digital mobile phones and digital cameras, as well as industrial products such as silicon wafers and manufacturing robots and more unusual items such as heavy water or mushroom spawn containing narcotics. Last year, the government increased the number of sensitive products to 542 items, from about 300 previously. The change was partly the result of talks with the U.S., according to the statement released Tuesday. Violators of the policy can face jail time if officials believe they intentionally tried to export sensitive items, or for repeat attempts. But in most cases, companies have unknowingly boxed up sensitive items to ship overseas, and were given warnings, Wu said. The government can also cancel or suspend a company's export license for failure to comply with the ban.
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The device is part of the Taiwanese computer maker's ongoing attempt to re-establish itself in the U.S. market.
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Taiwan Semiconductor Manufacturing Co., the world&#39;s biggest producer of made-to-order chips, on Tuesday reported record net profits in the third quarter, but the company&#39;s chairman predicted leaner times in the fourth quarter and next year.
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By George Hsu  Taiwan stocks, laggards in Asia since 2001, may catch up with markets elsewhere in the region next year as new products spur demand for video game consoles, computers and semiconductors.
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Advanced Micro Devices Inc. ,  the world's number two maker of microchips for personal  computers, will supply China's second-largest PC maker with  chips, scoring its latest victory in a market share battle with  bigger rival Intel .
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(InfoWorld) - The Chinese government has given Intel permission to build a $2.5 billion chip-manufacturing plant in Dalian, on China's northeastern coast. Intel plans to build a plant that will produce semiconductors, including microprocessors, on 300-millimeter wafers using a 90-nanometer manufacturing process, China's NDRC (National Development and Reform Commission) said in an announcement (in Chinese) on its Web site. The plant will have a monthly production capacity of 52,000 chips, it said. The planned plant will be the first constructed by Intel in China, and it will operate along with test and assembly plants in Shanghai and Chengdu, a city in southwestern China. The NDRC announcement did not say when construction will begin on the plant or when it would begin production. Intel declined to comment on the NDRC announcement. "We haven't made any announcements, and we don't plan to," said Chuck Mulloy, a company spokesman. If the NDRC announcement is accurate, the Dalian plant would be a coup for the Chinese government, which has made the development of the country's semiconductor-manufacturing industry a national priority. The most advanced production technology currently used by Intel is a 65-nanometer process, and the company has plans to begin producing chips using a 45-nanometer process later this year. The lower the number, the smaller the size of the smallest feature that can be created on a chip. Moving to a more advanced production process means chips can be produced at a lower cost, since more can be crammed onto a single silicon wafer. More advanced process technologies also generally help to improve performance and reduce power consumption. While a planned plant in Dalian that uses a 90-nanometer process technology would lag several generations behind the most advanced technology used by Intel, the plant would still rank among the most sophisticated in the world. Ben Ames in Boston contributed to this report.
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IBM , Singapore's Chartered  Semiconductor  and Samsung Electronics   will join forces to develop and manufacture chips using an  advanced processing technology, the companies said on  Wednesday.
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Exports from Taiwan jumped 17.9 percent in January on demand from China for electronics.  Overseas shipments rose to $19.9 billion, the Taiwanese Ministry of Finance said Wednesday in a statement. It was nearly double the 9.1 percent gain in December.
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(InfoWorld) - Fairchild Semiconductor and Himax TechnologiesÂ both completed steps this week that finalize, or nearly finish, their bids to buy Taiwanese chip makers. Fairchild received regulatory approval from the Taiwan government toÂ buy System General Corp., which specializes in chips that manage power in digital devices. A Fairchild subsidiary will now be allowed to remit $197.2 millionÂ into Taiwan to complete the purchase, according to a report by the Taiwan Investment Commission. Fairchild expects the deal to be completed by the end of the second quarter of this year. Himax, a Taiwanese maker of chips for LCD (liquid crystal display) screens, announced Thursday that it closed its acquisition of rival Wisepal Technologies in an all-stock deal valued at around $50 million. The purchase gives Himax a better position in the small-to-medium sized display market, the company said. The transactions highlight the large number of chip deals made over the past year, and follows closely on the heels of aÂ high profile $5.5 billion offerÂ made for the world's largest chip assembly company, Taiwan's Advanced Semiconductor Engineering (ASE), in November. The biggest chip deals have been made in the U.S. and Europe. Last year, a group of private equity investors agreed to payÂ $17.6 billion for Freescale Semiconductor, while Koninklijke Philips ElectronicsÂ sold a majority stakeÂ in its chip unit to another group for around $10.6 billion. Fairchild, of South Portland, Maine, was born from the ideas and investments of several chip titans, including Gordon Moore and Robert Noyce, both later of IntelÂ fame, and was incorporated in 1957. System General, of Taipei, opened in 1983, focusing on power management chips from the start. Fairchild cited System General's strong power products and sales in China and Taiwan as key reasons for its interest in the company. Himax will gain a few new large customers as part of its deal. Wisepal supplies LCD chips to Taiwan's Compal Electronics, the world's second largest contract laptop manufacturer, as well as handset maker Compal Communications and handset display maker TPO Displays. Compal Electronics and TPO Displays were the two largest shareholders in Wisepal prior to the acquisition by Himax. Â
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Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), of Hsinchu, Taiwan, has expanded its patent-infringement fight against rival contract chip maker Semiconductor Manufacturing International Corp.
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Three more Taiwanese chip makers plan to&#160;spend significantly less money on new factories and equipment&#160;this year as a DRAM (dynamic RAM) glut and uncertainty about the global economy weigh.Lower capital spending forecasts in the chip industry are a sign the global IT industry is on edge about future demand. Analysts have expected DRAM makers to cut back on spending for a long time due to&#160;falling chip prices. Prices for mainstream DDR2 (double data rate, second generation) chips remain below production costs, and most DRAM makers have reported losses for the fourth quarter.Powerchip Semiconductor, Taiwan&#39;s largest memory chip maker, Wednesday said it plans to spend NT$35.1 billion (US$1.09 billion) on new chip factories, technology and production line equipment this year, less than half the NT$86.3 billion it spent last year.Powerchip&#39;s smaller rival on the island, ProMOS Technologies, also more than halved its projected 2008 capital spending to US$800 million, down from US$1.84 billion last year. The company also put the expansion of its fourth 12-inch factory on hold pending a rebound in the DRAM market.United Microelectronics (UMC), the world&#39;s second largest contract chip maker, forecast its 2008 capital spending at US$500 million to US$700 million, down from US$900 million last year.The company&#39;s customers have turned cautious due to global economic worries, said Jackson Hu, CEO of UMC, at an investors&#39; conference in Taipei on Wednesday. The company forecast its chip shipments will decline as much as 15 percent in the first quarter, compared to the fourth quarter of last year as chip demand weakens, particularly for communications chips.Global semiconductor equipment spending is forecast to fall 9.9 percent to US$40.3 billion this year, from US$44.8 billion last year, according to Gartner. The market researcher blamed over-investment by DRAM makers in 2007 for the cutback in semiconductor capital spending this year. Concerns about a U.S. economic recession have also put chip makers in a cautious mood, Gartner said in a report published early this month.&#160;
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The new company, which does not yet have an English name, will open early next year in an advanced 12-inch chip factory Powerchip started building in central Taiwan earlier this year.
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US-based chipmaker Texas Instruments Inc. said it will spend about US$300 million (euro 240 million) over the next three years to increase output at its facilities in the northern Philippines.