April 5, 2002 – Taipei, Taiwan – United Microelectronics Corp. (UMC) has called off a deal involving the sale of its 200mm wafer equipment to a chip-equipment broker, citing mounting demand for chips that use 0.25- and 0.35-micron technology.

The announcement came after UMC said it had reached an agreement to sell part of its 200mm wafer plants in Taiwan to equipment broker Happy Wealth Holding for US$225 million, reported the Financial Times.

UMC Chairman Robert Tsao decided to sell off the 200mm equipment following a one-year severe slump in the global semiconductor industry last year, sources at the foundry said. There has been speculation that the equipment was ultimately destined for mainland China, skirting a ban on chip investments in the mainland that was lifted only recently.

However, the company said it has seen strong demand for chips using 0.25- and 0.35-micron processing technology since early this year, therefore it decided to call off the deal.

UMC said its capacity utilization rate has rebounded to over 60% in the first quarter and will improve further in the second quarter.