January 17, 2005 – Formosa Plastics Corp. announced yesterday it will spend NT$7 billion (US$219 million) to build the island’s first 12-inch silicon wafer plant through its unit, Formosa Komatsu Silicon Corp., reports the Financial Times .

The plant will be located in Formosa Plastics’ industrial park in Mailiao, Yunlin County. Officials of Formosa Plastics, which owns 24% of Formosa Komatsu Silicon Corp., said the plant will produce 50,000 wafers/month in the initial stage. It aims to raise the production to 100,000 wafers/month eventually.

The factory will cater to the needs of Taiwan Semiconductor Manufacturing Co., United Microelectronics Corp., and other semiconductor manufacturers in Taiwan, as well as companies in mainland China, officials at Formosa Plastics said.

“In the future, the production capacity will continue to expand depending on the needs of the market,” an official added.

The officials estimated that Taiwan’s demand for 12-inch wafers was around 100,000 units/month last year and they predicted that it will increase to 300,000 units monthly by 2006, or 20% of the global demand of around 1.5 million wafers/month.

They said the investment project falls into the category of a new strategic industry, enabling it to enjoy five-year tax-free incentive treatment, and that the industrial park also has other investment incentives, while its water and electricity are cheaper compared with other facilities in the same sector, making the project a highly competitive one.