United Microelectronics Corp. (UMC) has agreed to participate in a three-way joint venture for a new 12-inch wafer fab based in Xiamen, China.
UMC will partner with Fujian Electronics & Information Group and the local Xiamen government for the new manufacturing facility and its investment could reach approximately $1.35 billion over the next 5 years, the Hsinchu, Taiwan-based company said. Upon approval from the Taiwanese government, funding for the facility will begin in 2015.
UMC has been branching out with its investments in what it deems key locations to shore up business. In a recent interview with Electronics 360, Kite Huang, senior manager of technical marketing at UMC, said the company has been seeking to further diversify its 300mm production outside of its own fabs in Singapore and Taiwan. That includes a recent deal with Fujitsu Microelectronics where UMC took a 9.3 percent stake in one of Fujitsu’s independent 12-inch foundries in the Mie prefecture of Japan.
The Xiamen facility will be the second fab for UMC in China. Currently, UMC holds an 86.88 percent stake in HeJian Technology (Suzhou) Co., Ltd. that provides 8-inch wafers for its customers in the Asia-Pacific and mainland China. The joint venture in Xiamen will manufacture 12-inch wafers initially offering 55nm and 40nm technologies with a capacity reaching 50,000 wafers per month. Total investment in the Xiamen facility is targeted at $6.2 billion, UMC said.
Po-Wen Yen, CEO of UMC, said in a statement that Xiamen is a good location because it is one of five cities designated by China as a municipality with independent planning status. Other benefits to the location include a higher quality of life, a short distance to Taiwan (with similar culture, language and climate) and excellent living standards, Yen said.
“China’s domestic semiconductor market has become the world’s largest,” Yen said. “Current levels of domestic semiconductor demand far outweigh China’s production supply, with semiconductor import revenue surpassing that of crude oil. We believe our decision to establish local manufacturing is our best approach to benefit from this substantial China growth and to gain additional foundry opportunities worldwide. We anticipate the joint venture can propel the next round of UMC’s foundry business growth.”