To: Kirk © who wrote (53534 ) 10/2/2001 1:17:40 PM From: Proud_Infidel Read Replies (1) | Respond to of 70976 Silicon foundry UMC considers plan to buy customer fabs By Faith Hung EBN (10/02/01 12:08 p.m. EST) HSINCHU, Taiwan -- Despite its idle capacity, UnitedMicroelectronics Corp. said it will consider buying wafer fabs from its customers as a means to help them accelerate outsourcing and ease their financial burdens while the semiconductor industry fights to regain its footing. UMC, the world's No.2 silicon foundry, is considering “taking over fabs under certain circumstances,” said a company spokesman, citing chairman Robert Tsao. No specific targets or other details were available, the spokesman added. "[UMC] would like to help IDM [integrated device manufacturers] companies make a transition to fabless companies and help them solve problems,” he said. “This could be part of a strategic long-term agreement.” The foundry already has several manufacturing facilities in Taiwan, a joint-venture fab with Hitachi Ltd. in Japan, and one in Singapore under construction with Infineon Technologies AG. UMC also has deep pockets, holding about $1.74 billion in cash. “If UMC purchases any wafer fabs, it could very well be about bringing in contracts,” said Alfred Yin, an analyst with BNP Paribas Securities in Hong Kong. “Another consideration would be whether the plants are located in the U.S. or Europe, the major markets of UMC.” For now, UMC still has to face the fact that only about 35% of its manufacturing lines are running products, prompting analysts to predict a loss for the year. UMC is expected to soon cut the $385.5 million earnings target set earlier this year, analysts said. Taiwan Semiconductor Manufacturing Co., UMC's largest rival, last week slashed its full-year profit forecast by 72.9% to $173.9 million, saying that the industry's hoped-for IC recovery was not as strong as expected. TSMC also said that it won't use all of the $2.2 billion in budgeted capital expenditures this year and that such investments would shrink in 2002.