Friday, April 25, 2003
United Microelectronics Corporation (UMC) is building closer relationships with its selected clients what the local media dubbed UMC as the "virtual IDM" model.
UMC, world's second largest producer of wafers, bought shares in companies such as Silicon Integrated Systems (SIS) and others. UMC has also formed a joint venture with ALI Technologies, ULi Electronics, in which UMC holds a 40% stake via an affiliate. The company also owns over 30% of Faraday Technology, a provider of intellectual property (IP) cores and ASIC design services. UMC also planning to invest in local chipmaker Princeton Technology Corp. to strengthen its multimedia chip sector.
Few months before, UMC chairman Robert Tsao told investors he planned to invest in strategic companies that had the potential to grow faster than the rest of the industry. The reason for the change in policy is that the current business model of making chips for large customers is failing, he said. Report said that UMC's priority may be to manufacture for the larger customers during times of tight capacity, which may conflict with the smaller companies it has invested in.
This means the company may no longer be able to accept certain new IC designers that may be competing with its existing clients. It is part of UMC's strategy to invest in IC design houses in Taiwan and overseas to secure orders.
By: DocMemory
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