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To: DJBEINO who wrote (8900)	11/3/2000 12:16:25 PM
From: DJBEINO	Read Replies (2) \| Respond to of 9582

UMC reaches strategic alliance tie with Ericsson Taipei, Nov. 2, 2000 (CENS)--United Microelectronics Corp. (UMC) reached Thursday a strategic alliance tie with Ericsson and both sides also signed a contract to ensure the stable supply of wafer products in the future. Beginning early this year, several international integrated design manufacturers (IDM) such as Sharp have already signed contracts with UMC to ensure a stable supply of wafer products. This indicates that most international IDMs are worrying about the shortage of wafers and trying to set up stronger cooperation ties with local wafer foundry manufacturers, executives at UMC said. More and more IDMs are negotiating with UMC regarding the supply of wafer products. But UMC declined to reveal details on this regard due to the commercial confidential factor. Based on the recent contract, UMC will provide Ericsson with stable supply of wafer products. Being the world's third largest mobile phone manufacturer, Ericsson has entrusted UMC in the manufacture of certain ICs on the OEM (original equipment manufacture) basis. Ericsson is reportedly to move its mobile phone production lines to Asia, East Europe, and Latin America to strengthen its competitiveness in the world market. The firm also moves its low-end mobile phone production lines to Taiwan and Armenia to ensure higher profit margins. Ericsson expects its mobile phone sales will total 563 million units in 2001. The firm's mobile phone will connect with the Internet, PDA (personal digital assistant), and notebook PCs in the future. Presently, sales of telecom used ICs have represented between 35% and 40% of wafer foundry plants. ICs for PC and relevant products declined to about 30% for the time being. In related news, the French-based Alcatel has cooperated with Taiwan Semiconductor Manufacturing Co. (TSMC) in the manufacture of Bluetooth chips for telecom purpose. TSMC will offer an embedded flash memory technology to ensure a successful production of such products for mobile phones.