UMC restructures and forms joint ventures

01/01/1999

UMC restructures and forms joint ventures

Having recovered from a fire last year, UMC Group, based in Taiwan`s Hsinchu Science Park, is undergoing a restructuring plan that includes joint ventures with customers, and is building a fab in Tainen.

Over the past few years, UMC has been spinning off various groups and repositioning itself to become a pure global foundry. Facing a 1:6 market share ratio against competitor TSMC, and trying to manage a company with more than 2000 employees, UMC turned to a "small working group" concept, under which it released its product divisions and made them independent. UMC created six new product companies - chip-set, communications, multimedia, memory device, consumer products, and CAD tool design companies. "In this way," said John Hsuan, CEO of domestic operations, "UMC can service and support customers more efficiently. It was a mix of spin-offs and management buy-outs."

UMC went on to form joint venture programs with customers to achieve greater market share. Each of the new small working groups became a new foundry company with the investment from a customer. "When customers become joint venture partners, they ally with you to utilize next-generation technology and share the vision for future success," said Hsuan. UMC has formed a joint venture with S3 and its Align Semiconductor; a second venture with HI Lattice, ISSI Opti, ESS, and Oak; and a third venture with Xylinx, Sandisk, Alliance, and a Chinese design house.

Despite the market`s professed overcapacity, UMC has broken ground for a "new age" fab at the new Tainan science park. With the new fab, UMC will increase its 0.25-?m production. UMC now produces 5000 wafers/month with 0.25-?m features, and Hsuan expects to produce 50,000, 0.25-?m devices/month by 2H99. Also in the works is pilot production for 0.18-?m aluminum as well as copper technology. Hsuan expects that by the end of 1999, the 0.18-?m production rate will approach 10,000 wafers/month.

Hsuan also discussed new safety precautions that were taken in the aftermath of its 1997 fire. UMC hired a risk management expert to help UMC revamp its safety systems, implemented an auditing team, and improved fire-fighting equipment, including high-rise gear. UMC also donated money to help the local fire department buy more modern equipment. - Al Furst, Asia Consultant, PennWell International