TSMC Chairman Headed to Boao Forum

The chairman of Taiwan Semiconductor Manufacturing will be part of a delegation to the Boao Forum for Asia (BFA) this weekend in China, a meeting that could foreshadow a new era of business relations between Taiwan and China.

It will be the first meeting between Chinese officials and a high ranking member of administration elected to office in Taiwan on March 22, a group that is far more pro-China and pro-business than the current administration.

The Taiwan delegation to the Boao Forum is being led by vice-president elect Vincent Siew, who is also the founder and chairman of the Cross-Straits Common Market Foundation. The foundation was established in 2001 to find new ways for Taiwan and China to set aside political differences and cooperate economically. The two sides split in 1949 amid civil war, and China has vowed to use force if necessary to take over Taiwan.

A war today between Taiwan and China would halt the global IT industry, due to the sheer volume of PCs, mobile phones, iPods and other devices and components made in both places.

The recent presidential election in Taiwan ushered a more China-friendly president-elect into office, Ma Ying-jeou. Unlike his pro-Taiwan independence predecessor, Ma won in part on a platform advocating much stronger business ties with China, including direct shipping and air traffic between the island and the mainland. Currently, all ships and airplanes have to route through a third destination, often Hong Kong, to avoid going directly between Taiwan and China and causing a military ruckus.

Ma's new administration will take office on May 20.

Another major issue for the island is technology investment to China. For years, Taiwanese officials have scrutinized and often stymied certain technology investment to China for fear of lost jobs and that some Taiwanese technology might be used to improve weapons for China's People's Liberation Army.

Ma has pledged to allow Taiwanese companies to use whatever technology the U.S. allows into China. For chip makers such as TSMC, it will be a major change Intel, the world's largest chip maker, has already been granted permission from U.S. authorities to build a 12-inch (300-millimeter) semiconductor factory in China, able to produce chips with 90-nanometer etching technology. Current restrictions in Taiwan only allow chip makers to build old 8-inch chip (200-millimeter) factories using 180-nanometer technology there.

TSMC chairman Morris Chang will be part of the delegation to the Boao Forum, but it is not known what he will discuss at the forum, a TSMC spokesman said. Local Taiwanese news reports say the group's meetings will include time with Chinese President Hu Jintao.

A spokesmen for Mr. Siew said the group is still trying to arrange a meeting with China's president, but that nothing has yet been confirmed. In any event, the Boao meeting will be the first since the Taiwan election where high level officials from both sides will hold discussions. Siew is set to meet with several Chinese officials.

The 2008 Boao Forum will be held April 11-13 in Hainan, China.

Chang has attended a number of economic and political forums over the years, including representing the island in 2006 at the Asia Pacific Economic Cooperation (APEC) Economic Leader's Meeting.