(Nikkei BP Group)
(No.1 High-Tech News Site in Japanese)
| Two Top Taiwan Foundries to Expand Capacities Overseas
October 1, 1998 (HSINCHU, Taiwan) -- Two of Taiwan's leading foundry
fabs announced plans to expand capacities overseas.
|This indicates a positive long-term outlook amid business downturn in
the semiconductor industry, and possibly unfavorable conditions at a
new science park in Southern Taiwan where both firms have new fabs planned.
Taiwan Semiconductor Manufacturing Co. (TSMC) and United Microelectronics
Corp. (UMC) both disclosed on Sept. 29 deals of additional production
TSMC, the leading foundry house in the world, is to team up with Royal
Philips Electronics of the Netherlands, and EDB Investment (EDBI) --
the investment arm of the Economic Development Board Investments of
Singapore government -- to form a joint venture with a total investment
of US$1.2 billion for a new wafer fabrication facility in Singapore's
Pasir Ris Wafer Park.
This will be the eleventh semiconductor wafer fab in Singapore.
UMC Group, the world's second-largest dedicated foundry, is to take over
the management and operation of Nippon Steel Semiconductor Corp. (NPNX)
based in Tateyama, Chiba Prefecture, Japan by acquiring 56 percent of
the shares by Dec. 15, 1998. This is the first overseas merger carried
out by a Taiwan-based foundry fab.
UMC's infusion of 0.25-micron technology, as well as management know-how,
is targeted at transforming NPNX -- one of the two semiconductor subsidiaries
of the Nippon Steel Corp. of Tokyo -- from a DRAM manufacturer into
a foundry fab. In view of the growing fabless design industry in Japan,
the UMC/NPNX collaboration is positioned to capture an early lead in
Japan's foundry market.
UMC has similar fab-operation takeover deals under negotiation, one in
Europe and two in the United States. It is rumored that Rockwell International
Corp. of the United States is one of them. UMC declined to confirm or
deny the rumor.
Construction of the new Philips/TSMC/EDBI facility in Singapore is to
start in early 1999, with pilot production slated for the second half
of 2000, a time when all three partners anticipate logic IC chips will
be in strong demand. The new fab is to reach full monthly capacity of
30,000 wafers in 2003 with 0.25-micron, 0.18-micron technology and denser
For the Singapore project, Philips and TSMC will each hold 48 percent
and 32 percent of the shares, and they will be able to call on 60 percent
and 40 percent of the production capacity. Morris Chang, TSMC chairman,
said the project is an extension of the company's strategy to be close
to its clients.
Philips, the leading semiconductor supplier in Europe, and TSMC have
had a partnership since 1987. Philips was one of the major founding
shareholders of TSMC, and still holds 27.6 percent of TSMC shares. Philips
focuses on systems-on-silicon for consumer and communication applications,
a relatively solid sector even today, when the market for commodity
products is suffering from over-capacity.
TSMC currently has five fabs in Hsinchu, Taiwan, and one in Camas, Wash.,
plus a new facility under construction in Tainan Science-based Industrial
Park in Southern Taiwan.
Toward the end of last year, both TSMC and UMC announced billion-dollar
foundry fab projects in Tainan Park. Now both companies are engaged
in capacity expansion overseas. UMC's suspension of all construction
in the Tainan project is causing some industry analysts to speculate
that Tainan Park is falling out of favor due to flood hazards and poor
(Charlene Huang, Asia BizTech Correspondent)