HSINCHU, Taiwan -- Taiwan Semiconductor Manufacturing Co. said it will shortly submit an application to the Taiwan government to build its first wafer fab in China.
TSMC, the No.1 pure-play silicon foundry worldwide, said that it's planning to file its application around July for a 200mm wafer facility to be constructed in the southeastern province of Jiangsu. Company deputy chief executive F. C. Tseng declined to reveal the specific location of the plant.
Still, industry sources in Taiwan pointed out that TSMC could pick one site from Sungjiang and three other cities nearby Shanghai, where the majority of desktop, laptop PC and component makers of Taiwan -- the world's largest supplier of these products -- have established manufacturing facilities.
The foundry service provider's move comes shortly after the Taiwan government eased restrictions on 200mm wafer investments in mainl and China. United Microelectronics Corp., the nearest rival of TSMC, will likely file a similar application soon, some analysts said.
TSMC's fab construction is expected to create a cluster near Shanghai, drawing backend chip packaging and testing houses such as Advanced Semiconductor Engineering Inc. to build their plants on the mainland. Kaohsiung-based ASE is the second-biggest independent player after Amkor Technology, Chandler, Arizona.
"As soon as TSMC decides where to build its fab, ASE will follow suit," said Alfred Yin, head of research at BNP Paribas Peregrine Securities Co. in Hong Kong. "Everyone wants to be near the Chinese market, and each of them would have to stay next door to save logistics costs."
TSMC, Hsinchu, Taiwan, will probably begin volume production about late 2003 on technology process of 0.25-micron, some analysts said, adding the new fab's capacity would reach 40,000 wafers per month.