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Politics : Formerly About Applied Materials -- Ignore unavailable to you. Want to Upgrade?

To: StanX Long who wrote (60706)	2/19/2002 4:43:14 AM
From: StanX Long	Read Replies (1) \| Respond to of 70976

UMC to Withdraw From Hitachi Chip Venture, Sell Stake (Update1) By Minoru Matsutani 02/19 01:40 quote.bloomberg.com Tokyo, Feb. 19 (Bloomberg) -- United Microelectronics Corp. will withdraw from its Japan chipmaking venture with Hitachi Ltd., making good on a promise to sell its entire 40 percent stake if it couldn't gain control of the partnership. The second-largest maker of chips for other companies will sell its stake in the year-old venture to Hitachi, Japan's third- largest chipmaker, for 10.7 billion yen ($80.3 million), UMC spokesman Alex Hinnawi said. The sale will make Trescenti Technologies Inc. a wholly owned Hitachi subsidiary. Trescenti, which began producing chips last year in the midst of the chip industry's worst-ever year on record, has never operated at more than half capacity. Hitachi will gain control of a plant capable of making chips with the industry's most advanced technology, while UMC will focus on a similar plant in Taiwan and two more it's building in Singapore, including one with Advanced Micro Devices Inc., the No. 2 maker of computer processors. ``They (UMC) probably want to take the cash and get it in something new,'' said Ian Lui, who counts shares in UMC among the $547 million he helps manage at Allianz Asset Management Co. ``They felt like they had a passive role.'' UMC's shares dropped 3.5 percent to NT$44. Hitachi's shares fell 15 yen, or 1.83 percent, to 806. They've declined about 19 percent in the past year, compared with a 26 percent drop for the Topix Electric Appliances Index in the same period. More Chips Trescenti is the sole plant in Japan capable of making chips from 300-millimeter-diameter silicon wafers. The dinner-plate- sized disks yield more chips than conventional 200-millimeter wafers and can help cut production costs by as much as a third. While investors welcomed the move to cut costs, they emphasized the need for Hitachi to introduce products that generate steady revenue.