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TMSC gets fab toehold in China

Taiwan Semiconductor Manufacturing Company (TSMC) gained approval this week from the Taiwanese government to start investing in a fabrication facility in mainland China, becoming the first chipmaker on the island to be given legal approval to do so. The total investment in the project is $898 million, with $371 million coming from the company itself, $418 million coming from bank loans in China and a remaining $109 million covered by anticipated revenue from operations.

Although Taiwanese notebook and CD drive companies have already opened operations in China, the Taiwanese government has maintained tight restrictions on foundries such as TSMC that make chips for other companies. Taiwanese companies invented the foundry business and still lead it. TSMC executives and others, though, have said that an inability to move to China will prevent them from participating in the world's fastest growing market.

Ken Gao reported for ZDNet China. For the full story in Mandarin, visit here.