The Ministry of Economic Affairs (MOEA) is evaluating whether to allow semiconductor manufacturers to move their 12-inch wafer fabs to China, an evaluation that will be the ministry's main task in the second half of the year, Vice Minister of Economic Affairs Hwang Jung-chiou said Monday. Hwang made the remarks at the Legislative Yuan in response to lawmakers' questions stemming from an earlier statement on the move by President Ma Ying- jeou. Ma said in a statement June 5 after meeting Applied Materials Inc. (AMAT.O) President and CEO Michael Splinter that Taiwan does not rule out allowing local 12-inch wafer fabs to go to China. Responding to a question from ruling Kuomintang Legislator Lee Ching-hua, Hwang said the policy has not yet been hammered out and added that the ministry's evaluation will craft measures to keep research and development and advanced technology in Taiwan, although he admitted it is unavoidable that some technicians and engineers will move to China. Taiwanese businessmen will 'not necessarily' immediately invest in China once the government lifts the restrictions, according to Hwang. Opposition Democratic Progressive Party Legislator Pan Meng-an said that establishing a 12-inch fab in China costs at least NT$100 billion (US$3.04 billion) , and will attract economic resources from up- and down-stream, which he warned will result in the 'eradication' of the industry from Taiwan. Hwang said the ministry's evaluation will focus on the division of labor between Taiwan and China, emphasizing that state-of-the-art technology will be made to stay in Taiwan, while older technology will be allowed to move to China. Taiwan has so far allowed local chipmakers to produce only 8- inch or smaller semiconductor wafers and to use 0.18-micron or larger processes in China. Meanwhile that day, the DPP held a news conference at the Legislative Yuan to criticize the government's proposed move. DPP caucus whip Lee Chun-yee said the semiconductor industry is Taiwan's economic lifeline and there should be a comprehensive evaluation before the move is made into policy, while another DPP caucus whip, Kao Jyh-peng, predicted that the policy, if adopted, will cause tens of thousands of Taiwanese people to lose their jobs while investment and know-how will move to China. According to DPP Legislator Chen Ting-fei, the policy will result in only micro- profits for Taiwanese firms, noting that earnings per share (EPS) and net profit margins of local firms fell after the government lifted restrictions on investment of 8-inch equivalent wafer fabs in China in 2002. 