The Taiwanese government has given foundry chipmaker Taiwan Semiconductor Manufacturing Co. Ltd. (Hsinchu, Taiwan) approval to build a 300mm wafer fab in China, according to reports that reference the Investment Commission of the Ministry of Economic Affairs.
TSMC already operates one fab in China, but until the latest ruling the Taiwan government forbade Taiwanese companies from owning and operating fabs that process the more cost efficient larger wafer size.
Taiwan announced a plan to invest about $3 billion in building a wafer fab in Nanjing, Jiangsu Province, China in December 2015. The facility is planned for a capacity of 20,000 wafer starts per month and would begin volume production of 16nm FinFETs in second half of 2018, but the plan was subject to Taiwan government approval. At the time TSMC chairman Morris Chang said such a move would provide closer support to TSMC's customers there and further expand the company’s business opportunities.
The authorities relaxed the prohibition on Taiwan companies investing in 300mm wafer fabs in China in September 2015, saying that it would allow a maximum of three such plants.
However, before TSMC can move equipment into the Chinese wafer fab the Investment Commission will require proof that the foundry has begun manufacturing the more advanced 10nm manufacturing process in Taiwan, the reports said. This is intended to maintain Taiwan's technical lead over China.
TSMC's investment will bring pressure to bear on indigenous Chinese foundries such as Semiconductor Manufacturing International Corp. as it will likely have superior facilities and more advanced manufacturing process technology.
This article originally appeared on EE Times Europe.