BUILDING work has started on another plant in Taiwan that will produce silicon wafers. Located at the Hsinchu Science-based Industrial Park, the Taisil Electronics Material Corp is a joint venture between state-run China Steel and US-based MEMC Electronics Material Inc. Total investment in the project will top NT$4.84 billion (about HK$1.4 billion), according to China Steel officials. MEMC owns 45 per cent of the equity in the business, China Steel 35 per cent, while Chiao Tung Bank and the China Development Corp own 10 per cent each. China Steel signed the joint venture agreement with MEMC in May. Economics Minister P. K. Chiang said at the ground-breaking ceremony for the new project that the silicon wafer plant would help decrease Japan's trade surplus with Taiwan. It will do this by helping to meet domestic demand in Taiwan for raw silicon wafers, a business which is worth NT$3 billion a year. C. Y. Wang, the chairman of China Steel as well as the new company, said the plant was being built to create a more self-sufficient operating environment for the Taiwanese electronics industry. US-based MEMC merged with the German chemical industry giant HULS in 1989. MEMC, currently the world's second-largest silicon wafer supplier, fills 30 per cent of Taiwan's total annual demand for silicon wafer materials. Japanese suppliers dominate with a 60 per cent share of the market. There are more than 30 silicon wafer plants worldwide. Of the six largest, four are in Japan, with the remaining two in Germany. The top six plants together, meet 85 per cent of world demand. A plant such as Taisil is used to process silicon wafers from the stage of making the ingots, and then slicing and polishing to epitaxy (a crystalline substance grown on the silicon wafer). Integrated circuit (IC) manufacturers buy raw silicon wafers from plants such as Taisil, then etch circuits on the raw wafers for use in all kinds of memory chips. At present, only two silicon wafer plants are operating in Taiwan - Tatung Corp and Sino-American Silicon Products. But the two plants produce raw silicon wafers that can be used only on four-inch silicon wafer fabrications for transistors and light-emitting diodes. The new plant is scheduled to be completed within two years and is expected to come on line in 1997. First phase production capacity has been designed at 40 million square inches of polished silicon wafers. Capacity will be expanded to 100 million square inches in 1996. The plant will initially employ 350 people. The number will rise to 500 when the plant is at full production.