Taiwan's United Microelectronics Corp (UMC), the world's No.2 contract chip maker, intends to expand its customer base in China via its joint venture factory with the Fujian Province government, company executives said Wednesday.

The factory, which will begin production in late 2016, will produce mobile and communication device chips for the Chinese market, Chief Executive Officer Po Wen Yen said during UMC's first-quarter analyst conference.

"We're trying ... to enlarge our overall customer base by penetrating into the exclusive domestic Chinese market," Chief Financial Officer Chitung Liu added.

UMC did not name any specific clients but said the factory will produce semiconductors for the nascent market in internet of things, in which chips are embedded into everyday objects like cars and household appliances.

UMC broke ground on the factory last month in a joint ceremony with government officials and major client Qualcomm Inc , which recently paid a $975 million fine, the largest in China's corporate history, to settle a long-standing antitrust probe by the Chinese government.

China's government is investing heavily to strengthen its local semiconductor industry, though Taiwanese firms still outperform Chinese competitors in revenue and technological expertise.

UMC owns 33 percent of the factory currently under construction in the southern Chinese city of Xiamen, with the ultimate goal of full ownership.

The company earlier reported first-quarter net profit of T$3.98 billion ($130.6 million), beating analysts' estimates.

By: DocMemory
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