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  • Taiwan's Microchip Producers Expect Rebound in 1999
  • December 18, 1998 (SAN FRANCISCO) -- Taiwan's producers of microchips expect a rebound in their business in mid to late 1999, following a lackluster 1998, according to speakers at a U.S.-Taiwan chip conference.
    The U.S.-Taiwan Semiconductor Conference, held in Santa Clara, Calif., was highlighted by a projection that Taiwan's microchip industry will expand by 24.4 percent in 1999. The industry is expected to rack up sales of U$12.4 billion next year, according to Genda Hu, president of the Taiwan Semiconductor Industry Association (TSIA).

    Hsinchu-based TSIA estimates that sales this year will reach US$10 billion. That level would represent a plateau, Hu noted.

    Hu also serves as general director of the Electronics Research and Service e Organization of Taiwan's Industrial Technology Research Institute. He earlier worked at IBM Corp.'s Thomas J. Watson Research Center and Xerox Corp.'s Palo Alto Research Center.

    The China External Trade Development Council (CETRA) is one of the sponsors of the conference, which is intended to bring together executives and technical experts of U.S.- and Taiwan-based microchip companies. Among the goals of the conference is the building of stronger ties between the semiconductor industries of the two microchip powers. CETRA is a Taipei-based quasi-governmental trade organization.

    Companies featured at the conference included Taiwan Semiconductor Manufacturing Co. (TSMC), United Microelectronics Corp. (UMC), Acer Semiconductor Manufacturing Inc. and Walsin Microelectronics Corp.

    TSMC and UMC are two of Asia's three largest semiconductor makers that focus on foundry operations. The other is Chartered Semiconductor Manufacturing Co. of Singapore.

    UMC Group and S3 Inc., a Santa Clara, Calif.-based graphics microchip company, recently announced that they produced the graphics industry's initial 0.18 micron design. The 0.18 micron technology will enable S3 to deliver better performing graphics accelerators. The two companies said that the new microchip will be available in the first half of 1999. S3 owns 16 percent of United Semiconductor Corp.'s manufacturing facility. USC is an affiliate of the UMC Group.

    The S3-UMC relationship is only one of many linking Taiwan-based and U.S. microchip companies.

    Acer Semiconductor Manufacturing is another Taiwan-based microchip maker with strong ties to U.S. companies. IBM has transferred technology to Acer Semiconductor and other IC companies in Taiwan.

    TSMC-USA Co., based in San Jose, Calif., is among the affiliates of Taiwan companies seeking to raise its profile in the Silicon Valley. Taiwan-based companies with offices in the Silicon Valley are doing research and development on system-on-a-chip know-how and other innovative technologies.

    Speakers at the conference said their companies hope to move toward higher value-added types of microchips, including the system-on-a-chip devices.

    On the business climate in the sector, many of the speakers from Taiwan said that the global microchip market will pick up in the second half of 1999.

    Among the challenges facing Taiwan's microchip industry is obtaining necessary investment funding for new wafer fabs and dealing with legal complaints, such as those filed by Micron Technology Inc. of the United States. Micron is a large producer of DRAMs.

    (Neil Davis, Asia BizTech Correspondent)

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    Updated: Fri Dec 18 00:33:40 1998 PDT