Shen Rong-chun, Deputy Minister of Economic Affairs, said, the current regulations of setting the new fab in China is limmited by the number of total, which is three 8-inch fabs as an upper limit. The undergoing 12-inch wafer fab will also be limited to three; whether new setting, acquisitions or equity, the technology of process node should be one generation behinded Taiwan.

TSMC, for example, the most advanced process in production is 16-nm, which means the manufacturing node in China should be under 16-nm.

Shen stressed that the Taiwan government missed the best timing to open the door of investing in display panel in the China, leading China display panel makers to be enormous expanded by its huge domestic market and government subsidies, which has serious affected Taiwan's LCD panel industry. And this deregulation of 12-inch fab is not to make the same mistake.

Industrial Development Bureau pointed out that Taiwan's main competitors have already invested ICs fab in China, including Intel and Samsung. It is necessary for Taiwan to have 12-inche fab in China, to closer the market and competit with international rivals. This deregulation will be able to maintain the leading position of Taiwan in the global semiconductor market.

MOEA said, the new regulations will be deliveryed to Executive Yuan for approval next Thursday if no dispute. Companies may apply for the permission at the end of August.

TSMC spokesman Sun said, “TSMC still under evaluating, not yet finalized; but the deregulation of sole proprietorship of 12-inch fab will help TSMC and other semiconductor firms in the global distribution, protection of intellectual property rights and trade secrets.”