UMC outlines future course, chip design program
By Mark LaPedus
Electronic Buyers' News
(01/06/00, 06:58:46 PM EDT)
United Microelectronics Corp. may be booked solid for the next few months, but the chip foundry is taking several innovative steps to ensure that demand will be strong for the next few years.
For one, the Taiwan company plans to deliver its next-generation, 0.13-micron technology early this year, with production slated for 2001. The baseline process for the technology will be copper interconnect.
And in a move to differentiate itself from other foundries, UMC is launching a program to help its customers get their products to market more quickly. Under the program, called ASICplus, UMC will assist chip makers in nearly every phase of the product development, manufacturing, and test and assembly cycle.
Chip makers will have the option of handing off or co-developing their IC designs with one of a handful of third-party IC-design houses. Then, the design house will supervise or take control of the entire process flow. It will be responsible for bringing the chip into production within UMC's fabs, and will arrange the testing and assembly services with an independent provider.
Customers may have to get in line for the program, however. In fact, since the beginning of 1999, UMC's fabs have been running at or near 100% capacity. And its fab capacity will remain tight for the first half of this year, said Jim Kupec, president of UMC's U.S. subsidiary in Sunnyvale, Calif.
“We are formally on allocation until the second quarter of 2000,” he said.
UMC, the world's second-largest pure-play foundry, is not standing still. It is scrambling to develop technologies and programs to keep pace in the worldwide foundry industry against the likes of Chartered Semiconductor Manufacturing Pte. Ltd., IBM Microelectronics, and Taiwan Semiconductor Manufacturing Co. Ltd.
Like their counterparts in the electronics-distribution and contract manufacturing industries, foundry vendors are under pressure to offer more value-added services to attract new customers and differentiate themselves.
Previously, foundries exclusively provided high-volume commodity manufacturing for IC makers. Today, many are becoming one-stop shops, offering everything from design through test. For example, the major foundries are offering internal, ASIC-like design services to one degree or another for customers that wish to use them.
Putting a new twist in the evolving foundry model, UMC hopes to attract a new and emerging customer base with its third-party chip-design program, Kupec said.
UMC, which later this month will disclose more details about the program, including the identity of IC-design houses it will use, said ASICplus will not displace the traditional foundry model.
The program, for instance, is not tailored for large fabless design houses or integrated- device manufacturers. It is better suited for small but emerging IC makers, Kupec said.
Analysts praised the new concept.
“This makes sense for smaller fabless design houses'' that lack the resources to get their products to market, said Joanne Itow, an analyst with Semico Research Corp., Phoenix. “UMC wants to make sure these types of companies do not get lost in the shuffle.''
The new ASICplus program is the latest in a string of announcements from UMC, which is aggressively expanding its capacity, ramping new process technologies, and offering more valued-added services for customers.
UMC has also been in the consolidation mode to reduce costs. As part of those moves, Kupec has recently been given the additional responsibilities of worldwide marketing and sales for the company.
And this week, UMC will make good on its earlier promise to consolidate its entire foundry operations, folding its various joint-venture foundries into one flagship company under the UMC name.
The joint-venture foundries are United Integrated Circuits Corp., United Semiconductor Corp., United Silicon Inc., and Utek Semiconductor Corp.
The company has not completely given up the notion of the joint-venture model. Earlier this month, UMC and Hitachi Ltd. announced a plan to build a 12-in.-wafer fab in Japan.
With its fab operations in place, UMC plans to boost its capital expenditures from $1.7 billion in 1999, to $2.1 billion this year. By 2003, it will boost this spending to $3.6 billion.
And business remains robust despite stiff competition and the earthquake that rocked Taiwan last September. Having made a full recovery from the quake, UMC projects its sales will grow from $1.75 billion in 1999 to $2.5 billion in 2000.
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