UMC slows capacity rise at south Taiwan plant
TAINAN, Taiwan (Reuters) - United Microelectronics Corp (UMC), the world's second-largest contract chipmaker, said on Friday it would bring one of its most advanced semiconductor plants in south Taiwan to full capacity slower than scheduled due to the downturn in the industry.
Frank Wen, general manager of UMC's Fab 12A, said the plant was not likely to meet its original output schedule of 20,000 12-inch silicon wafers per month by the end of 2002.
Wen told analysts at the plant in the Tainan Science-based Industrial Park that UMC was in the middle of business planning and had not set up revised targets, "but it looks like 20k is not a reasonable number."
Faced with one of the semiconductor industry's worst-ever downturns, UMC's decision to slow the new plant would cut the company's pace of capital spending and limit its manufacturing capacity that would be standing idle.
UMC this month cut its 2001 forecast to a T$3.2 billion ($92.6 million) net loss from a T$13.33 billion profit after making record earnings in 2000. The depreciation cost on capital equipment is one of chipmaker's biggest drains on net profit.
UMC has slashed capital expenditure and has announced plans to sell manufacturing equipment this year.
But until now it has kept plans to upgrade from the current standard of eight-inch silicon wafers to 12-inch, which would allow the company to produce chips more efficiently.
Fab 12A, costing $3 billion, is the company's first plant in Taiwan using 12-inch wafers. It will have capacity of 40,000 wafers per month when it is fully completed.
TRIAL PRODUCTION TOO
The plan is currently running trial production, though a target of 5,000 wafers per month in December is also likely to be reduced, Wen said.
Though 12-inch technology is not fully mature, Wen said the fab's yields -- the number of functional chips per wafer, a key measure of quality for microchip makers and a closely-guarded secret -- were equivalent to UMC's mature eight-inch processes.
Wen said he had already spent T$25.3 billion on FAb 12A and has not yet set a capital expenditure budget for next year.
"Equipment vendors every day call to ask me that. I tell them you are in big trouble next year," he joked.
Another plant of equal size, Fab 12B, had been scheduled to start construction next to 12A in the fourth quarter of 2002, but it has been postponed indefinitely.
Taiwan's UMC, along with compatriots Taiwan Semiconductor Manufacturing Co <2330> and ProMOS <5387>, have all been building 12-inch plants, which are still rare in the semiconductor industry.
UMC also is building a joint-venture 12-inch plant in Singapore with Infineon . Another joint-venture 12-inch plant with Hitachi <6501> in Japan already has capacity of about 10,000 wafers per month.
Wen's comments came out after the market closed on Friday. UMC shares had gained T$0.70, or 2.44 percent, to T$29.40, outperforming Taiwan's benchmark TAIEX index, which added 0.31 percent. |
