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Approved outbound investments soar almost 200% due to TSMC's Arizona plan

10/21/2023 09:10 PM
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A TSMC plant in Arizona. CNA file photo
A TSMC plant in Arizona. CNA file photo

Taipei, Oct. 21 (CNA) Due to a plan under which contract chipmaker Taiwan Semiconductor Manufacturing Co. (TSMC) is building two advanced wafer fabs in the U.S. state of Arizona, the amount of approved outbound investments from Taiwan in the first nine months of this year surged almost 200 percent from a year earlier, according to the Department of Investment Review under the Ministry of Economic Affairs (MOEA).

Data compiled by the department showed that approved outbound investments during the nine month period totaled US$17.48 billion, up 190.06 percent from a year earlier after TSMC sought approval to move US$8 billion overseas to boost the capital of TSMC Arizona Corp.

TSMC, the world's largest contract chipmaker, is investing US$40 billion to build the two fabs in Arizona with the first one scheduled to begin commercial operations in 2025, a year behind schedule due to a lack of skilled construction workers, and the second slated to roll out chips in 2026, using the sophisticated 4 nanometer and 3nm process respectively.

In addition to TSMC, the department said iPhone assembler Hon Hai Precision Industry Co., the largest contract electronics maker in the world, filed an application during the nine month period to inject more than US$800 million into its subsidiary Foxconn Singapore Pte. Ltd. while Yang Ming Marine Transport Corp., a leading container cargo shipper in Taiwan, also sought to remit US$800 million to its unit in Singapore, the department said.

In the first three quarters of the year, the department said, the amount of approved foreign direct investments (FDI) stood at about US$7.97 billion, down 28.42 percent from a year earlier largely due to a relatively high comparison base over the same period of last year.

Despite a fall in FDI, it was still the third highest level for the nine month period in about 15 years, the department added.

In terms of approved investments from the countries targeted by the government's New Southbound Policy, the amount for the nine months rose 25.59 percent from a year earlier to US$2.46 billion with Singapore, Thailand and Malaysia the top three investors in Taiwan, the data showed.

The data also indicated the amount of approved investments planned by Taiwanese companies in the countries under the New Southbound Policy soared 65.49 percent from a year earlier to US$4.33 billion in the first nine months of the year with Singapore, Vietnam and Thailand the top three destinations.

The New Southbound Policy aims to enhance trade and exchanges between Taiwan and 18 countries in Southeast and South Asia, as well as Australia and New Zealand, in a bid to reduce Taiwan's dependence on China and was introduced after President Tsai Ing-wen (蔡英文) took office in 2016.

The size of approved China bound investment fell 17.03 percent from a year earlier to US$2.53 billion in the nine months with the electronic components industry Taiwanese investors' favorite destination, attracting US$736 million in investments, and accounting for 29.10 percent of the total, the department said.

Meanwhile, the amount of approved investments from China totaled US$26.58 million in the nine months, an increase of 38.08 percent from a year earlier, the department said.

Since Taiwan lifted a ban on Chinese investments in June 2009, the government has approved about US$2.59 billion in funds from China with about US$741 million pouring into the retail and wholesale business, the largest portion among local industries ahead of US$413 million going to the electronics component business, according to the department.

(By Liu Chien-ling and Frances Huang)

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