Analysts estimate that UMC had about $3.7 billion in cash or cash equivalents at the end of 2006. UMC said the buyback would not affect its on-going plans to expand, especially as the company's six eight-inch fabs approach full depreciation.

"After careful calculation, the company has determined that cash flows generated from UMC's future operations will be sufficient for the research and development of advanced process technologies and the continued expansion of advanced manufacturing capacity, including the second 300mm fab in Taiwan's Tainan Science Park which is estimated to cost $5 billion," the company said in a statement.

By: DocMemory
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