The fab, which is close to UMC's other operations in the Hsinchu Science Park, uses 0.18-micron and 0.15-micron manufacturing processes. It is equipped to produce 24,000 wafers per month and is running at about 70 percent capacity, a UMC spokesman said. Its maximum capacity is 35,000 wafers per month.

The transaction will boost UMC's monthly capacity by about 10 percent and provide some minor relief to the foundry's backlog. Even in the traditionally slow first quarter, UMC's current operations are running at 100 percent manufacturing capacity utilization and demand should remain steady for at least the next few months as the semiconductor industry upturn continues to gain momentum.

"With capacity booked, it's just a great time to do it," said Don Floyd, a Taipei-based semiconductor analyst for Lehman Brothers. "UMC gets very cheap capacity. SiS gets a lot of money so they can invest in R&D, which they should have been doing in the first place, and they can forget about doing manufacturing."

The SiS fab has been something of a ball and chain for the company. Originally a fabless firm, SiS decided to build a fab in the late 1990s, believing that its chipset business would grow at a faster rate if it wasn't constrained by a total reliance on foundries. The company also had plans to build a 12-inch wafer facility, going so far as to break ground and lay out a ramp-up schedule.

But after a loss-ridden downturn, criticism over its plans to become a manufacturer, and a lawsuit launched by its former foundry partner UMC -- alleging process patent infringement -- the company's chairman was deposed in a corporate coup that saw UMC take the helm of the chipset maker's board of directors. The 8-inch fab was promptly spun off from SiS' main IC design operation as SiS Microelectronics Corp. (SMC), and the 12-inch fab plans were mothballed, making SiS fabless again.

Thursday's deal brings to an end the boardroom saga between the two companies, with both sets of corporate officers approving the deal.

UMC will issue 357 million new shares to accommodate the acquisition, the company said. A spokesman said the fab should be rapidly integrated into the UMC operations, but declined to give a timeline.

By: DocMemory
Copyright © 2023 CST, Inc. All Rights Reserved