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  • IBM Earns Large Royalties via Tech Transfers to Taiwan
  • December 16, 1998 (TAIPEI) -- IBM Corp. is positioning itself to continue earning large royalty payments from Taiwan's microchip makers, based on its extensive portfolio of proprietary semiconductor technology.
    Already, IBM has transferred 0.17-0.25 micron semiconductor technology to Acer Semiconductor Manufacturing Inc. (ASMI) and Nan Ya Technology Corp. And recently, the Armonk, New York-based company signed a deal with Pacific Electric Wire & Cable Corp. to transfer 0.15-0.25 micron semiconductor technology.

    These three deals are expected to result in very large multiyear payments to IBM.

    The royalties paid by Nan Ya Technology and Pacific Electric Wire & Cable are judged to be substantial. However, ASMI is likely to be paying somewhat less for logic IC technology and 0.25 micron wafer processing technology, industry observers said.

    Although the semiconductor market had been stuck in a recession, IBM is emerging as a major winner by exporting its patented know-how. Each year, the U.S. computer giant reaps large payments from royalties and technology transfers.

    Also, IBM's alliances with Taiwan-based manufacturers helps it expand its wafer foundry business in Asia.

    Pacific Electric Wire & Cable's semiconductor plant is scheduled to begin 8-in. wafer production in 2000.

    Local analysts said that such an investment is not likely to be profitable because 8-in. wafers may have become virtually obsolete by 2000. Also, the relatively small output in the initial stage of production will be no match for the immense volumes of United Microelectronics Corp. and Taiwan Semiconductor Manufacturing Co., Ltd.

    Nevertheless, the risk on the part of IBM is limited, as Taiwan-based semiconductor makers pay royalties regardless of their profits.

    (Commercial Times, Taiwan)

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    Updated: Tue Dec 15 14:25:36 1998 PDT