News

24 August 2009

 

UMC establishes subsidiary targeting LED and solar investments

The board of directors of United Microelectronics Corp (UMC) of Taipei, Taiwan (the world’s second biggest silicon wafer foundry, after Taiwan’s TSMC) has approved the establishment of a new subsidiary, UMC New Business Investment Corp - capitalized at an expected NTD$1.5bn ($46m) - for the purpose of investing in the solar and LED industries. The firm is also establishing a New Business Development Center, headed by UMC senior VP Wen-Yang Chen, who is currently responsible for operations and sales at UMC's 8-inch and 6-inch silicon wafer fabrication plants.

The firm says that Wen Yang Chen will leverage his experience in the semiconductor industry to conduct evaluations on various investments. He will also be responsible for the integration, management and utilization of human resources, technology and capital. The new center aims to focus on industry sectors with high growth and profit potential. UMC New Business Investment Corp will then target timely strategic investment on the basis of the center’s evaluations.

UMC says that, with major developed and developing countries both having recently listed energy saving and carbon reduction as primary administrative policies to face the challenge of potential energy shortages in the future, technologies for renewable energy and energy saving are becoming the focus for technology development, lending some predictability to the growth of related industries. In particular, the use of solar energy has great development potential in the renewable energy sector, while the LED is a focus for energy saving. UMC reckons that its expertise and technologies are highly applicable to the fundamentals of these two industries, so the new business development center will focus on these sectors. In the short-to-mid term, UMC plans to complete the development of related technologies and establish a preliminary scale of operations. For the long term, as key proficiencies mature and resource integration is complete, the new energy business is expected to become core for UMC.

The firm stresses that it aims nevertheless to continue to strengthen its competitiveness in the foundry industry, while also adopting an intelligent capital utilization strategy through the new energy business development to increase capital utilization performance and to build momentum for long-term growth.

*Previously, in mid-June, Hsinchu-based Taiwan Semiconductor Manufacturing Co Ltd (TSMC) announced plans to explore business opportunities in the renewable energy sector (including LEDs and solar energy) with the formation of New Business Development Organization. Dr Rick Tsai (TSMC’s CEO over the past few years) was appointed its president (reporting to Dr Morris Chang, TSMC chairman and now also CEO ). “Looking to the future, TSMC needs to develop long-term growth opportunities,” said Chang. Chang targets US$2bn in revenue from the green energy sector by 2018 (while revenue from the firm’s chip foundries should rise to US$14-15bn by that time).

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