United Daily News Editorial (Taipei, Taiwan, ROC)
December 16, 2015
Executive Summary: Cross-Strait economic and trade policy require long-term calculations. They require an understanding of semiconductor industry transformation. The government must understand the purpose of Mainland investment on Taiwan. It must allow or disallow such investments based on rational considerations. The red tide has struck Taiwan. We on Taiwan must accelerate personnel training, increase industry-university cooperation, maintain and upgrade water, electricity and energy supplies, and improve the underlying conditions for Taiwan's semiconductor industry. DPP incitement of "red tide striking Taiwan" alarmism may win votes. But blindly imposing a closed door policy when confronted by competition, is hardly a responsible attitude, especially given DPP double standards. After all, the red tide will hardly be stopped by DPP spittle alone.
Full Text Below:
Two multi-billion dollar semiconductor industry investments on the Mainland and Taiwan have left people in shock. First, Taiwan Semiconductor Manufacturing (TSMC) built a 300mm wafer fab on the Mainland. This “go west” move by the Taiwan semiconductor industry set records for both investment amount and level of technology. A few days ago, the Mainland-based Unisplendour (UNIS) made a 100 billion dollar investment in a Powertech Technology (PTI) IC packaging and testing plant. It later announced that it was buying shares in Siliconware Precision Industries (SPIL) and ChipMOS Technology IC packaging and testing plants. These three investments add up to nearly 100 billion.
Both investments involved the semiconductor industry. Both were multi-billion dollar investments. The DPP treated the TSMC investment on the Mainland as nothing to worry about. But turned around and blasted SPIL for inviting UNIS to compete against Advanced Semiconductor Engineering (ASE). Tsai Ing-wen responded to the TSMC investment on the Mainland matter of factly, saying "These industries require a global presence". But according to former CEPD chairman Yin Chi-ming, Tsai Ing-wen called on business leaders earlier regarding this matter. She expressed support for these moves based on election considerations. Tsai Ing-wen advisor Lin Chuan rushed to her defense, and said he was responsible for the assessment, and that Tsai Ing-wen had nothing to do with it. By contrast, the DPP excoriated UNIS investment in three Taiwan IC packaging and testing plants. The DPP legislative caucus demanded that the Ministry of Economic Affairs first report to the legislature. Lin Chuan insisted that the UNIS case not be handled by the current administration, and that the Ministry of Economic Affairs must delay any review. This clearly implies that the DPP intends to withhold approval.
The military personnel housing case, the Ding Hsin case, and now the UNIS case, have become the main targets of the DPP during the election campaign. Allegations that "Taiwan companies are becoming Chinese companies" have painted the KMT into a corner. But take a closer look. The DPP has long opposed anything to do with the Mainland. Contrast its attitude toward TSMC investment on the Mainland with its attitude toward UNIS investments on Taiwan. Note the double standard. These two major events impact the semiconductor industry on both sides of the Strait. But to the DPP, they are nothing more than electioneering maneuvers.
The rise of the “red supply chain” is considered a key factor in Taiwan's export recession. Amidst this rising red tide, TSMC is transferring capital and technology to the Mainland. UNIS is throwing money around, making mergers and acquisitions. Local industries are looking to the Mainland. These are all matters of concern. But one cannot combat the rising red tide by slamming the door shut, by suddenly blocking entry or exit. One must instead consider the realities of the semiconductor industry.
Last year the Mainland imported 217.6 billion USD worth in semiconductors, and about the same amount as it did in petroleum. The Mainland semiconductor products trade deficit was nearly 156.7 billion, a 9% increase over the previous year. The Mainland is the world's largest manufacturer of mobile phones, tablets and other IT industry products. Naturally establishing its own semiconductor industry is an important development goal.
Mainland business accounts for over 50% of TSMC's compound annual growth over the past five years. This high growth rate means that the Mainland semiconductor market is no longer something remote, but a close by business opportunity we cannot afford to pass up. The foundry industry, and even the IC design industry and IC packaging and testing industry is increasingly dependent upon the Mainland market. They also of course face challenges from the other side.
Take the IC design industry for example. Last year Taiwan manufacturers accounted for 18% of the global market share, second only to the United States. The Mainland is in hot pursuit. It accounted for 9%. How long can Taiwan maintain its lead? The Mainland IC design industry is developing rapidly. In 2010 it accounted for a mere 5% of the market share. In just four short years its share has nearly doubled, and it has become a major competitor to Taiwan.
The above figures show that the Mainland is establishing a position for itself in the global semiconductor industry. It is catching up in technical standards. For Taiwan's semiconductor manufacturers to remain competitive, they need a best-case scenario. TSMC has leading-edge technology. Even though it has been on the Mainland nearly a decade, it retains its competitiveness. As Morris Chang notes, "When I look out the window from my TSMC office, I see no signs of the red tide."
The DPP has long denied the importance of the Mainland market for Taiwan businesses. Yet it simultaneously alleges that “the Mainland economy will destroy Taiwan”. In the past it obstinately opposed Taiwan investments on the Mainland. Now it obstinately opposes Mainland investments on Taiwan. In fact, TSMC built Shanghai's first eight-inch wafer plant in 2007. Eight years later, TSMC continues to lead Mainland companies. It retains its position as the world's leading semiconductor foundry.
The DPP has denounced the UNIS investment as an economic “Trojan Horse". But the electronics industry sees it as nothing out of the ordinary. Price earnings ratios on Taiwan's stock market are lower than they are on the Mainland's stock market. This affects the market value of the same category of businesses, and enables Mainland capital to engage in arbitrage. UNIS investment in SPIL is motivated merely by the desire to profit from hostilities between SPIL and ASE. As Hon Hai chairman Terry Gou noted, UNIS is “just another stock investor."
Cross-Strait economic and trade policy require long-term calculations. They require an understanding of semiconductor industry transformation. The government must understand the purpose of Mainland investment on Taiwan. It must allow or disallow such investments based on rational considerations. The red tide has struck Taiwan. We on Taiwan must accelerate personnel training, increase industry-university cooperation, maintain and upgrade water, electricity and energy supplies, and improve the underlying conditions for Taiwan's semiconductor industry. DPP incitement of "red tide striking Taiwan" alarmism may win votes. But blindly imposing a closed door policy when confronted by competition, is hardly a responsible attitude, especially given DPP double standards. After all, the red tide will hardly be stopped by DPP spittle alone.
一是台積電赴中國大陸設立十二吋晶圓廠， 創台灣半導體業西進金額與技術層次的雙高紀錄。另一個千億投資， 是大陸紫光集團，繼日前入股我封測廠「力成」後， 高調宣布要入股「矽品」與「南茂」封測廠， 這三投資案總投資金額亦逼近千億。
對矽品迎來紫光對抗日月光則砲聲隆隆。對台積電登陸，蔡英文說： 「企業要有全球布局的需要」，一貫的蔡式風格回應； 但前經建會主委尹啟銘指稱，蔡英文稍早拜會企業大老即知此事， 基於選舉考慮表示支持；智囊林全則跳出來護駕， 辯稱此事是他負責評估，與蔡英文無關。 至於紫光參股台灣封測三廠，民進黨則火力全開抨擊， 黨團要求經濟部要先向立法院報告，才能處理紫光案。林全也指稱， 紫光案不宜由現在的政府處理，經濟部應暫緩審查。言下之意， 民進黨將全力阻擋此案。
台灣公司變中國公司」的耳語，把國民黨逼到牆角。問題是， 細究民進黨一向的「逢中必反」， 對照處理台積電登陸與紫光參股的兩套標準， 這兩宗影響兩岸半導體界的重大事件， 其實只是被民進黨當作廉價的選舉操作。
在這紅潮中，台積電帶著資金與技術登陸， 與紫光挾著銀彈撒錢併購， 加劇國內對兩岸產業天平向大陸傾斜的憂慮。然而， 要對抗這股紅潮，不能只是採取「閉關政策」，忽而「阻進」， 忽而「阻出」，而必須權衡兩岸半導體產業發展的現實。
其中，其半導體產品的貿易逆差高達一五六七億美元， 較前年大增九％。由於大陸已是全球最大的手機、 平板等ＩＴ產業製造基地，扶植自身半導體業， 自然成為其重要的發展目標。
如此高的成長率，意味大陸半導體市場不再只是遠方的風景， 而是近在眼前必須掌握的商機。不只晶圓代工業， 台灣ＩＣ設計業與封測業近年更是倚重大陸市場，當然， 同時也面臨來自對岸的挑戰。
位居第二，僅次於美國。緊追在台灣之後的，就是大陸， 市占率為九％。台灣的優勢不知還能維持幾年。 大陸ＩＣ設計業發展迅速，二○一○年市占率才五％， 短短四年間即翻揚近倍，成為台灣的主要競爭對手。
技術水準則急起直追。台灣半導體廠商要維持競爭力，最好的情況， 是像台積電那樣擁有絕對領先的技術，即便登陸近十年， 也能保有競爭力。如張忠謀所言：「從台積電的辦公室往窗外看， 還沒看到紅潮。」
卻不斷宣傳大陸經濟「滅台論」，過去是強烈反對台商登陸， 現在則是反對陸資來台。事實上，台積電二○○ 七年在上海設立第一座八吋廠，八年過後， 台積電並未因登陸而被大陸廠商超前， 仍穩居全球半導體代工業龍頭。
但電子業界的看法，則比較持平。 由於台灣股市本益比低於大陸股市， 連帶影響兩岸相同類型企業的市值，這讓大陸資金有了套利空間。 紫光要參股矽品，利用的正是矽品與日月光的交惡； 鴻海董事長郭台銘就評論紫光，「只不過是一個炒股的投資者。」
瞭解兩岸半導體業界的轉變，看清紫光等陸資來台的真正盤算， 政府施政才能做到該放就放、該擋就擋。在這股襲台紅潮的壓力下， 台灣要做的是加速培養人才、擴大產學合作、維持並提升現有的水、 電與能源供應品質，強化台灣作為半導體產業基地的條件。 民進黨操弄「紅潮襲台」的話題或可在選戰中得利， 但一味用鎖國心態面對兩岸競爭，甚至出現雙重標準， 絕非負責的態度。畢竟，光靠口水是擋不住紅潮的。