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China Not the Only Place to Lower Costs March 23, 2007

Posted by David in Taiwan.

A 20-03-2007 article carried by the International Herald Tribune said that Taiwan Semiconductor Manufacturing has received Taiwan’s approval to “use more advanced manufacturing technology at its plant in Shanghai, China.”

According to the story the chipmaker can now “upgrade its production in China to 0.18 micron technology from 0.25 micron.” The narrower circuitry will allow for more semi-conductors to be packed on the wafers, which means cutting production costs.

“Taiwan Semiconductor and other Taiwan companies are pushing the island’s government to lift restrictions on their investments in China, where labor costs are cheaper, customers are closer and overseas rivals are expanding.”

However, their bid to be more competitive on the global market is meeting resistance because of Taiwan’s fear “that the island could lose jobs and technology to its political rival.”

Although I understand Taiwan Semiconductor’s position, I also see the Taiwanese government’s point-of-view. Until formal independence is declared the relationship between those two countries (China and Taiwan) will remain complex, and Taiwan businesses will continue to face these types of challenges.

Maybe those companies should look elsewhere to have their goods manufactured cheaply. India or Vietnam are good possibilities in my opinion.



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