Asia Focus
08/01/1999
Anticipating growth, rivals TSMC, UMC make extra capacity
With their fabs running fully loaded in recent months, rival Taiwan foundries United Microelectronics Corp. and Taiwan Semiconductor Manufacturing Co. have moved to secure additional capacity, with UMC seeking efficiencies in a merging of its joint ventures and TSMC picking up a majority stake in neighbor Acer Semiconductor Manufacturing Inc. (ASMI).
For its part, TSMC has agreed to take a 30% stake in ASMI, buying out about 23% of parent Acer's share in the fab and renaming it TSMC Acer Semiconductor Corp. The ASMI shares will cost TSMC NT$5.47 billion (about US$168 million), or NT$9.5/share. Acer will see its 49% stake in ASMI shrink to 26%, and will gain a profit of NT$1 billion in the transaction.
The deal comes about a year after Acer purchased Texas Instruments' 33% stake in the fab and embarked on a plan to find a new partner for the facility, and follows TSMC's recent announcement that it would build a 300mm line with joint venture affiliate Vanguard International Semiconductor Co. in Hsinchu.
Under TSMC management, the ASMI 200mm fab will run TSMC's logic process, DRAM processes to fulfill existing Acer obligations, and an IBM advanced logic process licensed to Acer, said Magnus Ryde, president of TSMC USA. The fab, located near the TSMC complex in Hsinchu, is running 0.50µm and 0.35µm processes, with some 0.25µm activity. TSMC's goal for the facility is to "get down to at least 0.22 micron, and maybe 0.18 micron" next year, Ryde said.
The facility will allow TSMC to add roughly 20,000 wafers/month to its capacity levels in the near-term; ASMI itself has an estimated current capacity of 25,000 wafers/month and plans call for capacity to increase to 38,000 wafers/month by the end of 2000. A cash offering of NT$8-10 billion is planned to help bring in new tooling for logic-based processes. Ryde expects equipment orders could begin in the next few months, though the conversion to TSMC's logic process will happen before then, "as soon as humanly possible," he said.
In UMC's consolidation, joint venture companies United Semiconductor Corp. (USC), United Integrated Circuits Corp. (UICC), United Silicon Inc. (USIC) and the publicly held UTEK Semiconductor will be merged into UMC, creating a single, more financially efficient organization, UMC said. UMC's Nippon Foundry Inc. is not included in the merger.
As a result, UMC said it will be able to speed up capacity expansion efforts by about a year, bringing its total capacity output to more than 2.4 million 8-in. equivalent wafers next year instead of in 2001. About 50% of next year's capacity is expected to be dedicated to 0.25µm and 0.18µm processes, said Jim Kupec, president of UMC Group USA. This estimate is on par with a plan outlined by TSMC, which sees a little more than half of its 2.4 million wafers coming out next year to be at 0.25µm and below.
For 1999 and 2000, UMC is holding capital spending flat with last year at $1.3 billion, with about 90% of that figure dedicated to new equipment buys and equipment upgrades. Revenues for UMC are targeted at $1.6 billion for 1999, marking a 45% hike from the $1.1 billion logged last year.
Kupec said the UICC fab, which was shut down after a 1997 fire, has been reconstructed and will be ramping 0.25µm/0.18µm processes over the next 1.5 years to a capacity of about 32,000 wafers/month. Equipment installations at UMC's recently completed Fab 5 facility will begin this summer, and first silicon is planned for 1Q00. USIC and UTEC are also seeing aggressive ramps.