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UMC may lead TSMC in 12-inch tech

United Microelectronics Corp (UMC, 聯電) is ahead of its rival Taiwan Semiconductor Manufac-turing Co (TSMC, 台積電) in a key area of technology, a leading US chip developer claimed yesterday.

Kris Chellam, chief financial officer at Xilinx Inc, said that if UMC is successful in ramping up the technology, it will be ahead of all other semiconductor foundries in the world.

"Right now we are [UMC's] primary customer bringing up 12-inch technology for them, and I think if they are successful they will have an advantage over any other foundry in the world, because I don't think TSMC is ramping up 12-inch at anywhere the same rate as UMC is," Chellam said in an interview with the Taipei Times yesterday.

Foundries are dedicated to the manufacture of silicon chips for developers such as Xilinx. Silicon chips are used in products as diverse as printers, mobile phones and computers. The large disks of silicon, called wafers, are what individual chips are cut from.

At present, most wafers are eight inches in diameter, but the industry is moving toward the more advanced 12-inch wafers.

Chellam characterized Xilinx's partnership with UMC as a symbiotic relationship, which has helped propel UMC's 12-inch technology development.

"We have been able to work very closely with UMC to create a winning combination ... They need products to prove their process, and we need a process to drive our products," he said.

However, the lead that Chellam claims UMC has over TSMC may be in a very specific area, said George Wu (吳裕良), an analyst at Primasia Securities Co.

"Both TSMC and UMC may have some distance [in technological advancement] for major clients, but generally they are very close," Wu said. "UMC focused in the past on communications products and this is where Xilinx leads, so it is possible that UMC may lead in 12-inch technology here," Wu said.

Xilinx concentrates on telecommunications and storage chips for consumer products. International market research firm Dataquest places the company at number five in the global applications specific integrated circuit (ASIC) market.

The company's customers in Taiwan include Acer Inc (宏電), Accton Technology Corp (智邦) and D-Link Corp (友訊). Xilinx manufactures 70 percent of its chips at UMC.

TSMC and UMC operate one dedicated 12-inch fab, but it is uncertain which of the companies will lead the market. TSMC also operates two six-inch and 10 8-inch fabs in Taiwan, while UMC has one six-inch and six eight-inch fabs here.

"There is no way to know for sure which company will leap into the next generation of products first," Wu said.

Chellam's comments come as both TSMC and UMC are poised to announce their third quarter sales results and predictions for the fourth quarter.

TSMC will hold its investors' conference this afternoon in the Westin Hotel, Taipei. UMC will deliver its results in the same venue on Oct. 30.
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