Witnessing paradigm shift in semiconductor technology

SAN JOSE, Calif. — Taiwan’s United Microelectronics Corp. (UMC) is accelerating its fab expansion efforts. It is also planning a private placement of no more than 10 percent of its total shares or about $400 million.Foundry vendor UMC did not elaborate. Analysts believe that UMC is gearing up for a new R&D partnership in an effort to play catch-up in the foundry market. UMC trails behind GlobalFoundries, TSMC and Samsung in process technology, it was noted.

“In general, it sounds like they are positioning for some kind of technology alliance/licensing. The Street may speculate a new relationship with IBM (similar to the IBM tech licenses that SMIC, Chartered/Global Foundries and Samsung,” said Steven Pelayo, an analyst with HSBC, in a report. ”Alternatively, this could be related to a potential stronger relationship with a key customer like Texas Instruments.”

At one time, there were rumors that UMC would join IBM Corp.’s ”fab club,” which includes IBM, GlobalFoundries and Samsung.

As reported earlier this year, Xilinx Inc. said it will use leading foundry TSMC as one of two foundry suppliers for its 28-nm FPGAs, a major strategy shift that has been the subject of industry rumors and analyst speculation for weeks.

Xilinx said it is using TSMC and Samsung Electronics Co. Ltd.’s foundry division to make 28-nm parts. Xilinx’ shift to TSMC is a bitter pill for rival foundry UMC, which has been a foundry supplier to Xilinx for more than a decade.

Meanwhile, UMC is speeding up its fab ramp. The company ”will kick off official operations of the phase-three and phase-four production facilities at its 12-inch Fab 12A at the Southern Taiwan Science Park (STSP) on May 20, compared to the original schedule set for the third quarter,” Pelayo said.