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The China Semiconductor Industry Association (CSIA) is set to join the World Semiconductor Council (WSC), signifying a shift to a more co-operative relationship between Chinese and other major semiconductor powers.

The CSIA and the WSC yesterday signed a memorandum of understanding in Beijing, which invited the CSIA to apply for membership of the WSC.

The WSC is composed of industrial organizations from all major semiconductor manufacturing and consumption regions in the world except for China, the largest consumer of semiconductors and the fastest growing manufacturer.

"The accession of the CSIA into the WSC will promote exchanges and build a mutually beneficial relationship between the two organizations," said Yu Zhongyu, chairman of the CSIA.

He expected the Chinese Government would ratify the accession agreement "very soon."
The CSIA has been talking with the WSC since 2001 about council membership. But the relationship between the Chinese semiconductor industry and WSC members has been rocky.

In 2003, the WSC and the US Semiconductor Industry Association (SIA) launched complaints against China's value-added tax (VAT) preference policy to semiconductor makers in China.

The policy, drafted in 2000, said the actual VAT burden on semiconductor manufacturers should not exceed 3 per cent.

Since the VAT rate on imported products was 17 per cent, the WSC and the SIA believed it was unfair to imported products, although the Chinese side had a different interpretation on the actual VAT burden. In 2004, China scrapped the VAT policy.

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