UMC to Build US$3.6B Chip Plant in Singapore

Taiwan-based contract chip manufacturer United Microelectronics Corp. (UMC) announced Friday that it will build an advanced semiconductor plant in Singapore, with a planned investment of US$3.6 billion. When fully operational, the plant will have a total capacity of 40,000 300-millimeter (12-inch) wafers per month.

UMC also announced that it has signed a memorandum of understanding with Munich-based Infineon Technologies AG, which plans to take a minority stake in the Singapore plant.

Groundbreaking for the plant, which will be built in two phases, is scheduled for next year's first quarter, with equipment to be moved in to the first module in the third quarter of 2002, Hsinchu, Taiwan-based UMC said in a statement.

The plant will focus on so-called system-on-chip (SOC) products that will be built using 0.13-micron and 0.10-micron process technologies jointly developed by UMC, Infineon and IBM Corp.

SOCs are semiconductors that combine several functions, such as a processor, memory and a graphics engine, into one integrated chip.

UMC's choice of Singapore for the massive investment is a blow to the Taiwanese government's efforts to keep the country's chip makers from investing overseas. The announcement comes at a time when Taiwan is seeing a hollowing out of its manufacturing base, with many of the country's low-end electronics and computer products makers rushing to move production to China and other lower-cost locations.

UMC is the world's second-largest contract chip manufacturer, behind crosstown rival Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC).

Currently, contract chip manufacturers such as TSMC and UMC are feeling the effects of the slowdown in the PC industry, which is a major semiconductor customer. UMC, for example, earlier this month said that it expects first-quarter orders to be some 10 percent to 15 percent lower than for the current fourth-quarter.http://www.umc.com.tw

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