United Microelectronics Corp. (UMC) and Fujitsu Semiconductor Ltd. have announced an agreement for UMC to become a minority shareholder of a newly formed subsidiary of Fujitsu Semiconductor that will include its 300 mm wafer manufacturing facility located in Kuwana, Mie, Japan. UMC's advanced 40 nm technology will be also licensed to Fujitsu Semiconductor.
The company will provide high quality foundry services to customers by combining Fujitsu Semiconductor's low power process and embedded-memory technology with UMC's foundry expertise and advanced process technology. Under the terms of the agreement, UMC will invest JPY 5 billion as an initial investment by which UMC will subscribe for approximately 9.3 per cent of the Company's shares.
Po Wen Yen, CEO of UMC, said, "We are continuously exploring ways to expand our operations to increase our customers' competitiveness while also delivering maximum value to our stakeholders. Partnering with a leading Japanese semiconductor company like Fujitsu Semiconductor for a local joint venture will not only offset the time, risk and cost of building a new fab, but also provide access to another 300 mm manufacturing source in addition to UMC's own 300 mm operations in Taiwan and Singapore.
With three 300 mm operations in different regions throughout Asia, both parties will hold unique positions to be able to serve customers looking to mitigate manufacturing risk, such as Japan's automotive chip makers, who vigorously seek suppliers that implement robust business continuity plans. UMC will also be able to leverage this strategic partnership to gain new foundry business within the Japanese market."
Haruki Okada, president of Fujitsu Semiconductor, said, "Fujitsu has been in search of a partner with whom to jointly operate a new foundry company based on its Mie 300 mm wafer fab. I am pleased to announce that Fujitsu Semiconductor and UMC, a leading global semiconductor foundry, have entered into the joint venture agreement. Since Fujitsu Semiconductor and UMC have built up a good relationship while Fujitsu Semiconductor has outsourced its products to UMC for years, I am confident that the joint venture will succeed.
“The joint venture will provide excellent foundry services to customers, based on a wide variety of CMOS technologies with highly-skilled process developing and porting ability, the 40 nm process technology licensed by UMC and high quality manufacturing system certified by automotive customers. I am expecting that the joint venture will be not only one of the best foundry companies in the world, but also a bridge between Taiwan and Japan."
UMC will license its 40LP (Low Power) process technology to Fujitsu Semiconductor as an expanded process offering for the company and contribute capital to expand the Company's 40 nm manufacturing capacity. The products currently manufactured by Fujitsu Semiconductor at Mie Fab will be manufactured and delivered by the Company to customers including Fujitsu Semiconductor.
Through this partnership, the new Japan-based joint venture will aim to expand its business globally as a pure-play foundry company by strengthening its production and development capability as well as cost competitiveness.