The research purpose of this article is to analyze the development of 12-inch Silicon Wafer Fab in China via International Political Economy of Realism. The theories of realism revolve around basic propositions: states are the central actors and governments actively influence the economy via many methods. This research shows that 12-inch Silicon Wafer Fab in China is quite consistent with the main viewpoints of realism. Firstly, autonomy is the motive. Policies and funds are the driving force. Moreover, from the perspective of international regime and national power, many dilemmas of development can be seen. This article also suggests that Taiwan must face China's challenges and opportunities.