Computer chip giant Taiwan Semiconductor Manufacturing Corporation (TSMC) came a step closer to moving its eight-inch wafer plant to Shanghai on Thursday, as opponents to the plan agreed to end their boycott.
The multi-billion dollar proposal by TSMC has met with strong resistance from former president Lee Teng-hui and the pro-independence Taiwan Solidarity Union (TSU) since it was approved, with conditions, by the Economics Ministry last month.
Mr Lee and the TSU's 13 lawmakers have argued that the transfer of the technology will eventually result in the 'hollowing out' of Taiwan's microchip industry and pose tough competition to local companies.
Premier Yu Shyi-kun succeeded in reaching a compromise with Mr Lee on the issue yesterday. Leading a group of senior officials, Mr Yu told TSU chairman Huang Chu-wen that the government would allow TSMC's plan to go ahead only after it mass-produced chips at its 12-inch wafer plant in Taiwan.
'The government will see that such mass production meets various criteria set by the Economics Ministry, including whether those products occupy a sizeable market in the world,' Mr Yu was quoted as saying by Mr Huang during the meeting.
The Economics Ministry has agreed in principle to allow TSMC to set up the eight-inch fabrication plant on the mainland, allowing the company to move funds to Shanghai for the building of the premises.