UMC considers fab closure, but not layoffs
By Mike Clendenin
EE Times
(07/03/01 11:43 a.m. EST)
TAIPEI, Taiwan — United Microelectronics Corp. said Monday (July 2) that it might make sense to temporarily close one or more of its wafer fabs if the industry downturn gets worse. At the same time, the company stressed it would not lay off any workers.
As the downturn bites deeper into bottom lines, rumors have been swirling through the Hsinchu Science Park about UMC mothballing at least one fabrication facility because of low utilization rates. In a letter to employees, UMC chairman Robert Tsao acknowledged the possibility; however, a UMC spokesman later said there are no immediate plans to do so.
Tsao's letter was intended to allay anxiety among employees about the rumors, which have been building over the past few weeks, the spokesman said. "There was no statement that we will close a particular fab. We just said that due to the current situation it might make sense for us to temporarily ramp down a fab," he said.
UMC is still moving forward with capacity expansion plans. Its 300-mm wafer fab in the Tainan Science Park is slowly ramping up and is expected to produce 5,000 to 7,000 wafers per month by year's end. The company already has partial ownership of one 300-mm wafer facility in Japan and is planning pilot production at a Singapore joint venture in the first quarter of 2003. Because of these expansion plans, the UMC spokesman said it doesn't make sense to let employees go.
So far, the downturn is affecting UMC more than its foundry rival, Taiwan Semiconductor Manufacturing Co. Ltd. UMC recently said it would lose money in the second quarter and believed the third quarter might be worse. In the Monday letter, Tsao said many people think the worst downturn in foundry history is poised to continue and he encouraged employees to maintain their spirit and prepare for the next upswing in the semiconductor cycle.
Sales at UMC and TSMC have consistently drooped lower since the beginning of the year. In the first quarter, UMC and TSMC posted 26 percent declines in quarter-on-quarter sales. Results for the final month of the second quarter are due by July 10. Despite skepticism from analysts, TSMC chairman Morris Chang still maintains that his company will be profitable in the second quarter and that fortunes will improve from here on out. At the beginning of the quarter, Chang said his company would weather another 26 percent sequential quarterly sales decline. Last month, UMC adjusted its figure from a 30 percent quarterly drop to a 35 percent drop.
In related news, the sluggish performance at the foundries was partially reflected in a recent report by the Industrial Technology Research Institute. On Monday, ITRI said Taiwan's IC production value will slip 12 percent this year, to $17.8 billion. |
