To: AJ Berger who wrote (6713 ) 12/28/1999 2:06:00 PM From: DJBEINO Respond to of 9582
UMC poised to unseat TSMC as top foundry supplier Taipei, Dec. 27, 1999 (CENS)--Local market analysts estimate that United Microelectronics Corp. (UMC) will report sales of NT$110 billion (US$3.43 billion at US$1:NT$32) next year, around 85% of the sales figure forecast by its rival Taiwan Semiconductor Manufacturing Co. (TSMC). Based on the strong showing, some analysts predict that UMC may unseat TSMC as world largest IC foundry supplier in the year of 2001. UMC has been noted for its ambitious expansion plans, which so far have involved the incorporation of five affiliates. Local market analysts estimate that the chip-making conglomerate will enjoy considerable growth in sales and profits following the incorporation. This year, TSMC is forecast to generate sales of NT$72 billion (US$2.25 billion) while UMC is estimated to generate NT$61 billion (US$1.9 billion) or so. The two companies forecast sales to grow by 80% next year. They estimate that both companies will have sales of NT$180 billion (US$5.625 billion) in 2001 and that UMC may even cross that mark. UMC is constructing a 12-inch silicon-wafer fab at the Tainan Science-based Industrial Park. It is also in talks with Hitachi of Japan over the joint construction of a similar facility. Both factories are scheduled to begin production in late 2001. TSMC's first 12-inch fab is estimated to begin commercial production in second half of 2001. Next year, UMC will start production at two new eight-inch wafer fabs, raising the number of company facilities to eight. TSMC will add one facility to its existing five factories. Local market watchers predict that UMC will catch up with TSMC in profits and revenues next year. From 1997 to 1999, TSMC and UMC have spent roughly NT$130 billion (US$4.06 billion) each on expansions. As of 2006, TSMC's spending is estimated at NT$400 billion (US$12.5 billion) while UMC's spending is forecast to total NT$500 billion (US$15.6 billion). Market analysts point out that UMC has preferred to expand capacity by allying with integrated-device manufacturers (IDMs), chipmakers who design their own chips, a strategy that allows UMC to gain instant access to production capacity and contracts. Over the next two to three years, they say, UMC will very likely unseat TSMC as world's biggest IC foundry supplier if it continues to expand its cooperative ventures with IDMs worldwide. The analysts say that TSMC has been widening its lead over UMC in recent years due to more effective management.