The company is evaluating Shanghai as a location for the plant because semiconductor orders there are growing, said William Lee, a company spokesman.
"Via plans to invest in computer chip packaging and testing plants because our demand for such services is growing rapidly," said Lee, citing chairwoman Cher Wang as the source of the plan.
While the Taiwan government prohibits chipmaking investments in China, its political rival, local investors are finding ways to skirt the ban and take advantage of China's growing semiconductor market.
The Shanghai Daily reported in November that Taiwan-backed Shanghai Grace Semiconductor Manufacturing Co has already broken ground for a chip plant in the city.
Winston Wang, Cher Wang's brother and chairman of Shanghai Grace, said former Siliconware Precision Industries Co vice president Lin Chih-kuo would be appointed president of the new Via plant, the Economic Daily News reported.
Shanghai Grace may cooperate with Via to form a complete supply chain, fabricating, packaging and testing chips, the paper said.
Semiconductor packaging and testing are the final steps in chipmaking. Silicon wafers are cut into so-called die, which are then assembled into plastic packages and tested.
A chip assembly and test factory costs hundreds of millions of dollars to build compared with the billions of dollars needed to build a silicon wafer plant.
Via has gained market share in the chipset business against No. 1 chipmaker Intel Corp. Chipsets link a processor with other parts of a computer such as memory chips and the display.
The company estimates its 2000 revenue at NT$30.9 billion (US$936 million), beating expectations.
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