The Rundown: GlobalWafers, Starlux, and Indonesian Migrant Workers

GlobalWafers Co. Chairperson Doris Hsu. Photo: CommonWealth

A bi-weekly snapshot of Taiwan business news stories brought to you by CommonWealth and AmCham Taipei’s TOPICS

GlobalWafers edges closer to US$4.5 billion acquisition

Taiwanese semiconductor silicon wafer fab GlobalWafers announced on November 30 that it intends to acquire German Siltronic AG for US$4.5 billion. If the deal goes through, GlobalWafers would become the world’s second largest producer of silicon wafers in terms of revenue behind Japan-based Shin-Etsu Chemical, which currently controls around 33% of the global silicon wafer market.

GlobalWafers predicts that post-acquisition, quarterly revenue could increase by at least NT$10 billion. The company notes that production in the second half of 2020 reached full capacity across the board, including for 12-inch and 8-inch wafers. Even with an influx of consumer-related orders, as well as those related to 5G and automotive customers, the fab was able to maintain a high quality of production, and shipments of certain wafers began to rebound to their pre-coronavirus levels.

Silicon wafers are the most important production material for manufacturing semiconductors. GlobalWafers’ customers include the Taiwan Semiconductor Manufacturing Co. (TSMC), United Microelectronics Corporation (UMC), Samsung, and other major multinationals. Following the company’s rise in the wafer production field, it along with TSMC, ASE, and other firms have helped secure Taiwan’s leading position in different segments of the semiconductor supply chain, including manufacturing, testing, and key materials.

Starlux to start KL service from next year

Starlux founder and former EVA chairman Chang Kuo-wei. Photo: CommonWealth

Taiwanese luxury airline Starlux announced on November 27 that it would begin regular flights to Kuala Lumpur starting early next year, continuing its strategy of gradually adding back routes since the outbreak of COVID-19 forced it to discontinue flights in the Spring.

Starlux said that it made the decision based on Kuala Lumpur’s strategic significance in the Southeast Asian economy and its position as a freight forwarding hub. The company will begin flights of its fleet of Airbus A321neo from Taoyuan to the Malaysian capital every Tuesday and Friday from January 5, 2021.

Starlux’s Taoyuan-Bangkok route began operations on December 1, while the company plans to open the Osaka route on the 15th and the Tokyo route on the following day. It will also increase the number of cargo flights to Penang and Macau, adding weekday afternoon flights to the normal schedule. Starlux said that it will continue to adjust its services on a monthly basis in order to respond to market demand.

Taiwan bans Indonesian migrant workers

In response to the rapid increase in COVID-19 infections in Indonesia in recent weeks, the Central Epidemic Command Center (CECC) announced in late November that it would halt the entry of Indonesian migrant workers for two weeks starting from December 4. It is expected that the order will impact approximately 1,350 Indonesian laborers.

The CECC’s commander, Minister of Health and Welfare Chen Shih-chung, said that over the past several months, Taiwan has required that migrant workers arriving first from the Philippines and then Indonesia quarantine collectively in official facilities. However, as Indonesia’s pandemic situation has intensified and the accuracy of negative tests from there is unreliable, the CECC decided to increase immigration controls on Indonesian migrant workers.

Chen estimated that the ban will stay in place until December 17, and based on the situation in Indonesia at that time, the CECC will consider whether to begin allowing half of the original number of migrant worker arrivals to resume on the following day. If the number of Indonesia’s cases has not begun receding by then, the center will maintain its strict controls. It will also examine whether to allow those migrant workers who have completed the necessary procedures and arranged for a place to quarantine to enter Taiwan on a rolling basis.

At the time of the CECC’s announcement, Taiwan had already begun mulling whether to cease sourcing migrant labor from Indonesia after the Indonesian government demanded that certain agency and immigration fees be paid by Taiwanese employers. On December 2, Minister of Labor Hsu Ming-chun said that the Ministry of Foreign Affairs had found another country under Taiwan’s New Southbound Policy that was willing to cooperate on supplying migrant labor to Taiwan. The MOL says that it could sign a new memorandum of understanding with the country by next year at the earliest, with workers starting to arrive in 2022.

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