Taiwan’s second largest chipmaker, United Microelectronics Corp (UMC), has announced a group consolidation program that will see the parent company merging with four of its affiliates. United Semiconductor Corp (USC), United Integrated Circuits Corp (UICC), United Silicon Inc (USI) and UTEK Semiconductor Corp will be integrated into UMC via a series of share swops.
This reorganization focuses our Taiwan-based fabs into a single, more financially efficient and competitive organization, said UMC group chairman, Robert Tsao. He said the integration, which is scheduled to be completed by the end of the year, will raise UMC’s revenue target from NT$25bn ($780m) this year to more than NT$70bn ($2.18bn) next year.
Although the group will remain as the island’s second-largest semiconductor manufacturer behind Taiwan Semiconductor Manufacturing Corp, which recently expanded foundry capacity by buying 30% a stake in Acer Semiconductor Manufacturing Inc, it will put it on a more equal footing.
After the merger, UMC’s revenues will be comparable with TSMC’s which has been ahead of us for nine years, Tsao said, and if we acquire another company now, UMC’s revenues will no doubt exceed TSMC’s. However local analysts said they doubted UMC would overtake TSMC anytime soon. What the merger will do, they said, is make UMC’s operations more efficient by cutting out duplication of effort and reducing its expenditure, although Tsao said nobody would be laid of as production capacity is being expended. The total capitalization of the five companies will drop by 30% to NT$88.3bn ($2.76bn) dollars.
