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September 29, 1998

NIPPON STEEL SELLS SEMICONDUCTOR UNIT TO UMC

By CBR Staff Writer

Japan’s Nippon Steel has announced that it will sell its 56% stake in Nippon Steel Semiconductor Corp to Taiwan’s United Microelectronics Corp. The 30,560 shares will be sold for approximately 50,000 yen each and totalling 1.53bn yen ($11.25m). The transaction will be completed by December 15. Nippon Steel president, Akira Chihaya, said at a joint press conference with UMC that the sell off was prompted by the slump in semiconductor prices and the bleak outlook of the market. He also said that the company would post an end of year loss of about 120bn yen because it had guaranteed Nippon Steel Semiconductor borrowings. However, he said that he did not expect this to effect the company’s net earnings forecasts because the loans would eventually be covered by asset sales. UMC said that they saw the potential growth in Japan for integrated-circuit-design companies who outsource manufacturing and the purchase is intended to help them tap that market.

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