TSMC Said to Build 12-inch Wafer Fab in Nanjing, China

28 Aug

Following news that Taiwan’s Ministry of Economic Affairs (MOEA) might soon loosen rules on 12-inch wafer fab investment in China, Taiwan Semiconductor Manufacturing Company (TSMC) is reportedly working on building a 12-inch wafer fab in Nanjing, China, by sole proprietorship, according to a bid announcement by the Chinese city government.

According to the announcement, an engineering consulting company from China’s Jiangsu was conducting an open tender on a piece of land in Pukou Economic Development Zone on behalf of TSMC, leading to speculations that TSMC has chosen the spot for its 12-inch wafer fab.

Current regulations still forbid Taiwanese companies building 12-inch wafer factories in China by sole proprietorship. Taiwan’s United Microelectronics Corp. (UMC) and Powerchip Technology Corp. have set up 12-inch wafer fabs in Xiamen and Hefei, respectively, through equity participation or joint ventures. TSMC, with fears of leaks of technology, hopes to build its 12-inch fab in China as a sole proprietor but has been prevented due to legislation.

Earlier media reports said the MOEA might soon ease the regulations on such investment in China. A spokesman at that time declined to comment on the details, confirming only that the ministry has met with related agencies on the issue.

Based on Taiwan’s current regulations on setting up wafer fabs in China, the technology of process node used in the Chinese plant should be one generation behind that in Taiwan. TSMC is currently working with 16nm process in Taiwan, and is expected to produce 20nm or 28nm products in China. TSMC’s reported 12-inch wafer fab in China, if established, may enter trial production in the second half of 2017, and its Taiwan factories will have entered 10nm production process by that time. Meanwhile, TSMC Chairman Morris Chang said early this year that his company was considering expanding its 28nm production in China.

Currently, UMC’s new fab in Xiamen focuses on 40nm and 55nm production process. The company’s most advanced process node is 28nm. Its Xiamen plant might switch to 28nm production if its factories in Taiwan can successfully enter mass production with the 14nm node in 2016.

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