Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Technology Stocks : Alliance Semiconductor -- Ignore unavailable to you. Want to Upgrade?

To: DJBEINO who wrote (2094)	12/8/1997 7:07:00 AM
From: DJBEINO	Read Replies (1) \| Respond to of 9582

INTERVIEW: UMC to invest 1.3-1.5 bln usd on new fab/sees difficult H1 (FROM DEC 4, 1997) ---- by Adela Lin ---- TAIPEI (AFX-ASIA) - United Microelectronics Corp said it plans to invest 1.3-1.5 bln usd in a new 8-inch wafer plant in Hsinchu, even though the company expects next year to be a difficult one for the industry. Work will begin at the site later this month, with "production slated for 1999, with 0.25 micron processing technology and full capacity at 40,000 pieces of eight-inch wafers (per month)," UMC chief finance officer Gary Tseng told AFX-ASIA in an interview. Earlier this year, UMC announced a 500-bln-twd investment program for the construction of six wafer fabrication plants in the Tainan Science-based industrial park, with the first to be an 8-inch facility. Tseng said "next year will be a bloody year" for the industry, with demand in the first half in particular likely to be weak. "Pentium II will not become the mainstay (chip) until the second half," Tseng said, while the company is looking to digital video disc and high-speed modem systems to spur demand after that. Noting that "the Comdex show (in the U.S.) was not so exciting," Tseng said many industry players have voiced concern over the outlook for the first half. He said UMC's January capacity has been booked and it is now taking orders for February, adding that demand should pick up in the second half of next year. At the same time, however, "the supply side in the second half may increase as well," he said, referring to expected new capacity coming on-stream in Taiwan and South Korea. "Our company will see growth next year but the magnitude is likely to be lower than the industry's forecast (of 20 pct)." Asked about the impact of the recent depreciation of regional currencies on the company, Tseng said weakness in the Taiwan dollar may help earnings in the short-term but will be a negative factor in the long-term. "We pay U.S. dollars for capital expenditure (on equipment)," he said. For the longer-term, Tseng said increased capacity, higher income from company units and a much more settled market should see the company boosting growth by 2000. UMC has previously said it expects group monthly sales in 2000 of 10.00 bln twd on total capacity of 200,000 pieces of eight-inch wafers at six manufacturing sites. Tseng said that the investment in the new Hsinchu plant is part of the company's strategy of increasing output to boost market share. UMC recently closed its 4-inch wafer fab in Hsinchu, where it currently operates an 8-inch and a 6-inch plant. This expansion will also be mirrored at the group's units. United Semiconductor Corp, 43 pct held by UMC, plans to increase capacity at its Hsinchu plant to 35,000-40,000 eight-inch wafers per month next year from 20,000 currently. United Semiconductor also began construction of its second plant in Tainan of southern Taiwan last month. United Silicon Inc, 40 pct held by UMC, is scheduled to start manfuacturing in March next year, with capacity expected to reach 15,000 units of eight-inch wafers per month by the end of 1998, Tseng said. Referring to 40 pct-held United Integrated Circuits Corp unit, whose plant was damaged by a fire in October, Tseng said the company hopes to settle its insurance claims by March so that it can start rehabilitation and hopefully then production by October. Tseng said United Integrated will commence with a 0.25 micron production process and a full monthly capacity targeted at 30,000 eight-inch wafers. "We expect to receive some 30 pct of the insurance payment for United Integrated this month," he said, adding that UMC and its insurers have agreed to value the assets concerned at around 12.30 bln twd. He declined to give a figure for the insurance settlement. An official at a foreign insurance company that provides reinsurance to United Integrated told AFX-ASIA that the reinsurers have basically agreed to settle the claim and processing work is now under way. Yesterday, UMC closed unchanged at 62.5 twd.