UMC’s China fab investment approved
CHIPMAKING:UMC’s investment in 40nm and 55nm process technologies in China will still be one generation behind its most advanced tech in Taiwan, an official said
By Lauly Li / Staff reporter
01/01/2015
The Investment Commission yesterday approved United Microelectronics Corp’s (UMC, 聯電) application to invest in a 12-inch wafer fabrication plant in China.
The nation’s No. 2 contract chipmaker plans to invest a total of US$1.35 billion in a three-way joint venture with the Xiamen City Government and Fujian Electronics & Information Group (福建電子信息集團) to manufacture advanced chips in China.
Commission spokesperson Chu Ping (朱萍) said the regulatory body approved UMC’s application to wire US$710.64 million — which includes US$260.64 million from HeJian Technology (Suzhou) Co (蘇州和艦科技) — to fund the investment over the next three years.
UMC gained an 86 percent majority share of HeJian in 2012.
Chu said the company would file another application to transfer the remainder of the US$1.35 billion.
Acting commission executive secretary Emile Chang (張銘斌) said it is the largest investment the regulator has approved in the past two years.
“Although UMC’s five-year investment in the 12-inch wafer fab conforms to the government’s regulations on China-bound investments, the commission still requested that the company meet several conditions,” Chang said.
The commission asked that UMC carry out research and development for 14-nanometer (nm) technology in the Southern Taiwan Science Park (南部科學工業園區) within the next three years, Chang said, adding that the chipmaker must also recruit 3,000 employees in Taiwan over that period.
It must also invest US$1.3 billion annually for capital expenditure in Taiwan, which is higher than its proposed investment in China, he said.
Chang added that the company should report on the progress of its China investment to the commission and the Ministry of Economic Affairs on a quarterly basis.
He said UMC had agreed to the terms proposed by the commission.
The Industrial Development Bureau said that China developing its semiconductor industry is positive for Taiwanese companies as it can help them expand their presence and secure their positions in the world’s largest semiconductor market.
The bureau said that UMC’s strategic investment would help it secure more orders from China and expand its production capacity.
Bureau Deputy Director-General Lien Ching-chang (連錦漳) said UMC’s proposed investment in 40nm and 55nm process technologies in China will be one generation less advanced than the company’s most advanced 28nm technology.
“There will be no risk of leaking technologies to China,” Lien said.
UMC shares gained 1.72 percent to close at NT$14.75 yesterday in Taipei trading. They rose 19.43 percent over the year, compared with the broader market’s 8.08 percent increase over the same period, Taiwan Stock Exchange data showed.
