Jan. 28, 2003 – Hsinchu, Taiwan – Taiwan Semiconductor Manufacturing Co. (TSMC) expects to start production at its planned wafer fabrication facility in China in 2H04 at the earliest, Chairman Morris Chang said.

The world’s largest foundry received “in principle” approval last week from the Taiwan government for its plans to build a 200mm fab in Songjiang, near Shanghai.

The Taiwanese government still needs to give final approval before the company can direct funds to the project or begin construction work on the plant, which would be TSMC’s first in China, reported Dow Jones.

TSMC submitted its application to the government for the plant last September.

Chang said he wasn’t worried about the pace of the government approval process but said TSMC needs to be in China to take advantage of the growing market there. “China is a huge market, we’ve got to be there,” said Chang.

He said TSMC needs a plant in China in order to generate new orders there.

Despite its entry to the World Trade Organization, analysts say that chips imported into China face being taxed by as much as 17%, including import duties and value-added taxes. Chang also said Chinese firms will buy from local chip foundries unless TSMC builds a plant there.