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UMC to invest in Xiamen to produce 12-inch wafer in joint venture

UMC to invest in Xiamen to produce 12-inch wafer in joint venture

Taipei, Oct. 9 (CNA) Taiwan's United Microelectronics Corp. (UMC), the world's No. 3 contract chip maker, announced Thursday that it will invest in a 12-inch wafer foundry in Xiamen, China. UMC's board of directors resolved Thursday for the company to enter a three-way agreement with the Xiamen Municipal People's Government and Fujian Electronics & Information Group to form a joint venture company in the Chinese city, which is separated from the Taiwan-controlled islands of Kinmen by just a few kilometers of water. UMC anticipates its investment in Xiamen could reach approximately US$1.35 billion in the next five years, with funding starting in installments from 2015 based on the progress of the joint venture. The company said the joint venture will manufacture 12-inch wafers, initially offering 55 nanometer and 40 nm technologies with a production capacity of 50,000 per month. Total investments are targeted at US$6.2 billion. The Hsinchu-based company has been busy building cross-border cooperation. In August, it entered a partnership with Japan's Fujitsu Semiconductor on chip production. CEO Yen Po-wen cited China's domestic semiconductor market, now the world's largest and where demand far outweighs local production, as the reason for the decision. "We believe our decision to establish local manufacturing (in China) is our best approach to benefit from this substantial China growth and to gain additional foundry opportunities worldwide," Yen said. "The joint venture not only provides our customers the option to source IC components that are made in China, but also locates us within the Chinese market to enhance UMC service and support for local fabless customers," he said. "The benefits for choosing Xiamen for the fab location are numerous," he continued.
Xiamen is one of five Chinese cities designated a municipality with independent planning status, he explained, adding that it boasts high living standards and a good quality of life. It is only a short distance from Taiwan and has similar culture, language and climate, allowing seamless support from UMC's Hsinchu headquarters, he said. He also pointed to Xiamen's well-established infrastructure to supply local engineering talent that can establish a world-class foundry for the company. (By Jackson Chang and Lilian Wu)


Updated : 2021-04-18 14:04 GMT+08:00