Taiwan chip foundries' existing China investment not affected by latest core key tech ban

Bryan Chuang, Taipei; Judy Lin, DIGITIMES Asia 0


Advanced semiconductor manufacturing technology under 14nm was included in the list of 22 key core technologies to be banned from illegal outflows to foreign adversaries on December 6, announced by Taiwan's National Technology and Science Council (NTSC). Wang Mei-hua, Taiwan's Minister of Economic Affairs, said semiconductor foundry manufacturers are already aware of the ban on advanced semiconductor manufacturing processes, and their existing investments in China will not be affected.

Wang specifically reminds companies that received government subsidies to cover more than half of their R&D expenditures for key core technologies that they are required to obtain government permission for technologies or personnel to enter China.

Hestia Power, a SiC power chip startup spun off from the Industrial Technology Research Institute (ITRI) and invested by ITRI and Hermes Epitek, disbanded its entity in Taiwan after transferring technologies to China and establishing a company in Shanghai, became the latest case of concern. The manufacturing process technology of its 600V planar transistor was developed by the ITRI.

To prevent key technology/trade secret leaks and theft, Taiwan has amended the National Security Act and the Act governing relations between the people of the Taiwan Area and the Mainland China area (Cross-Strait Relations Act) in June 2022 to increase punitive measures on economic espionage and illegal technology outflows.

After the announcement of the list of 22 core key technologies to be banned for preventing illegal trade secrets outflows, the National Science Council (NSC) stated that overseas investment, establishment of factories abroad, export of goods, or technological cooperation by companies will be managed through diverse approaches by existing relevant regulations and mechanisms.

The "National Security Act" defines national core key technologies as those that, if flowing into foreign countries, the Chinese region, Hong Kong, Macau, or overseas hostile forces, would cause significant harm to national security, industrial competitiveness, or economic development, and meet one of the following conditions: 1) Control should be implemented based on international conventions, defense needs, or considerations for the security protection of national critical infrastructure; 2) It can lead to the development of leading technologies in Taiwan or significantly enhance the competitiveness of important industries.

According to the "Cross-Strait Relations Act," personnel engaged in national core key technology businesses receiving government funding require approval when going to China. The NSC is authorized to formulate the "Regulations for the Recognition of Certain Standards for Government-Funded Subsidies," with the draft planning certain criteria, limiting key technology project personnel to those whose government funding exceeds 50%.

The NSC stated that in the determination of national core key technologies, it adopts the position of safeguarding national economic security while balancing scientific and technological research and development. It continuously reviews and evaluates the implementation of regulations, aiming to protect Taiwan's crucial key technologies and make Taiwan a globally reliable partner.