The Executive Yuan has relaxed restrictions in investing 12-inch wafer facilities in China, allowing Taiwanese IC manufacturers to set up factories through sole proprietorship, reported Commercial Times on September 1. Under current laws, Taiwanese IC manufacturers are only allowed to invest in China through equity participation or M&A. Both routes risk leaking Taiwanese vendors' intellectual property or know-how to the outside. The deregulation will permit a maximum of three 12-inch wafer fabs to be built in China, with their production processes lagging at least "one generation" behind the technology available in Taiwan, said MOEA (Ministry of Economic Affairs). However, the number of 12-inch wafer facilities built under joint venture is not limited under the revised regulation.