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UMC board votes to close Japan fab

Posted: 24 Aug 2012 ?? ?Print Version ?Bookmark and Share

Keywords:semiconductor foundry? restructuring plan? cost cutting?

United Microelectronics has announced that upon the consensus of its board of directors, operations at its 200-mm fab in Japan will cease once all final orders are completed. Liquidation of the subsidiary's assets will come at a later time.

"Owing to macroeconomic conditions, the industry's fast-changing environment, customer demand decline and continued unstable energy supply caused by Japan's 2011 earthquake, semiconductor vendors upstream and downstream have either reduced or eliminated capacity in Japan to save costs," UMC said in a regulatory filing with the Taiwan Stock Exchange. "In line with this trend, [UMC Japan] will be shut down to enable UMC to integrate business, improve resource use efficiency and lower operating costs as UMCJ was unable to effectively reduce costs and reach performance targets."

UMC Japan was acquired by UMC from Nippon Steel Semiconductor Corp. UMC originally bought a majority of Nippon Steel Semiconductor in 1998. The Taiwanese foundry acquired the remaining stake in the fab, since renamed UMC Japan, in 2009.

UMC said it would continue to serve customers in Japan through its other fabs, nearly all of which are in Taiwan.

UMC said the UMC Japan fab has a monthly capacity of approximately 20,000 200-mm wafers. Until June 30, total assets for the subsidiary were 16.8 billion yen (about $212.2 million) with liabilities of 2.8 billion yen (about $34.4 million), UMC said.

The subsidiary had first half operating revenue of 3.7 billion yen (about $46.8 million) and a net loss of 1.6 billion yen (about $20.2 million), UMC said.

UMC said last month it would sell up to 10 percent of the company to a strategic partner or partners. UMC, long the No. 2 player in the semiconductor foundry business behind rival Taiwan Semiconductor Manufacturing Co. (TSMC), is expected to slip to third in foundry sales this year behind TSMC and Globalfoundries, according to IC Insight.

Dylan McGrath
??EE Times

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