TAIPEI -- A senior Taiwanese official on Tuesday hinted that the local authorities may approve Taiwan Semiconductor Manufacturing Co.'s planned $3 billion investment in China at the end of this month.
Speaking three days after Taiwan's ruling Kuomintang, or Nationalist party, was roundly defeated by the pro-independence Democratic Progressive Party in the presidential and parliamentary elections, Wu Ming-ji, director general of the Ministry of Economic Affairs' Industrial Development Bureau, said neither party opposes the TSMC deal.
"The review process would not be affected by the election's outcome," Wu said.
The official said a special task force is still reviewing TSMC's investment proposal and will reach a conclusion soon. The task force will then send its evaluation to the Investment Commission, the body responsible for approving investments by Taiwanese companies in China, for a final decision before the end of January or the Chinese New Year in early February.
On Dec. 7, TSMC submitted an application to establish a wholly owned 12-inch wafer-manufacturing facility to produce its advanced 16 nanometer chips beginning in 2018 in the Chinese city of Nanjing. Currently, TSMC's sole mainland manufacturing base is in Shanghai.
TSMC Chairman Morris Chang said on Jan. 14 that building another plant in China would enhance the company's access to the growing Chinese market, which accounted for 9% of the company's revenue in the fourth quarter of 2015.
"It is considered a positive move for TSMC, which has much more advanced technology than its smaller Chinese rivals," said William Dong, head of Taiwan equities at UBS. "To grow operations in China at this point could effectively help them overpower any other local and international competitors," he said.
Although the government appears to be moving toward approving the TSMC deal, outgoing Minister of Economic Affairs John Deng said Monday that officials may postpone a decision on whether to allow mainland investment in Taiwanese chipmakers and whether to allow the Beijing-backed Tsinghua Unigroup to invest in Taiwanese chip assemblers, including Powertech Technology, ChipMOS Technologies and Siliconware Precision Industries.
Deng cited widely split public opinion as the reason for the likely delays, and said the proposals may not come under review until after president-elect Tsai Ing-wen is sworn in on May 20.
According to Wu, any Chinese investment in Taiwan's chip sector needs to be approved by the new parliament, which will be inaugurated on Feb. 1.