The board of United Microelectronics Corp (UMC, 聯電) yesterday approved a proposal to allow its Chinese unit, Hejian Technology (Suzhou) Co Ltd (和艦科技), to file for a 2.5 billion yuan (US$380 million) initial public offering (IPO) in China.
Hejian’s IPO, aimed at funding capacity expansion and to vie for a stronger presence in China, is the latest in a slew of local firms looking to debut the shares of their Chinese subsidiaries.
Foxconn Industrial Internet Co’s (FII, 富士康工業互聯網) IPO on the Shanghai Stock Exchange earlier this month saw its market value surpass its Taipei-listed parent company, Hon Hai Precision Industry Co (鴻海精密).
“We began taking a serious look at this IPO project prompted by some similar [IPOs] launched by local peers,” UMC chief financial officer Liu Chitung (劉啟東) told a media briefing.
The world’s third-largest contract chipmaker said the IPO would help it curb a talent drain at Hejian by allowing the firm to implement an employee stock ownership program, Liu said.
Hejian, which has an 8-inch fab in Suzhou, Jiangsu Province, suffered a high employee turnover of between 15 and 20 percent last year because of constant poaching by its Chinese rivals, Liu said.
Based on UMC’s plan, Hejian is to offer up to 400 million new shares to raise about 2.5 billion yuan and plans to use most of the proceeds to boost its capacity from 65,000 wafers per month to 75,000 wafers.
Hejian has two Chinese subsidiaries: United Semiconductor (Xiamen) Co (聯芯) and UnitedDS Semiconductor (Shandong) Co (聯璟半導體).
United Semiconductor operates a 12-inch fab and UnitedDS Semiconductor designs chips.
UMC said the Hejian IPO would not adversely affect its revenue and profit as the three units contributed a combined 11 percent of UMC’s total revenue in the first quarter this year.
After the IPO, UMC would hold about an 87 percent stake in Hejian, down from 98 percent.
“An A-share listing on the Shanghai Stock Exchange provides an ideal path for UMC to quickly capitalize on the rapid growth of China’s semiconductor market and facilitate Hejian’s long-term development,” UMC joint president Jason Wang (王石) said in a statement.
The move is expected to help expand UMC’s market share and further increase its scale of production, technical quality and overall competitiveness, he said.
The proposed IPO is subject to shareholders’ approval at an extraordinary meeting scheduled for Aug. 20.
The board also approved a plan to buy the remaining 84.1 percent of a joint venture with Fujitsu Semiconductor Ltd for ￥57.63 billion (US$521 million).
The joint venture, Mie Fujitsu Semiconductor Ltd (MFS), operates a 12-inch fab in Japan.
UMC currently owns a 15.9 percent stake in the company.
“MFS is totally complementary to UMC in terms of customer portfolios and product lineups,” Liu said. “MFS mostly makes chips used in the automotive sector and for Internet of Things apps. Its customers are largely Japanese automakers.”
MFS posted revenue of ￥70.9 billion last year and a net profit of ￥2.66 billion.
GROWING OWINGS: While Luxembourg and China swapped the top three spots, the US continued to be the largest exposure for Taiwan for the 41st consecutive quarter The US remained the largest debtor nation to Taiwan’s banking sector for the 41st consecutive quarter at the end of September, after local banks’ exposure to the US market rose more than 2 percent from three months earlier, the central bank said. Exposure to the US increased to US$198.896 billion, up US$4.026 billion, or 2.07 percent, from US$194.87 billion in the previous quarter, data released by the central bank showed on Friday. Of the increase, about US$1.4 billion came from banks’ investments in securitized products and interbank loans in the US, while another US$2.6 billion stemmed from trust assets, including mutual funds,
Micron Memory Taiwan Co (台灣美光), a subsidiary of US memorychip maker Micron Technology Inc, has been granted a NT$4.7 billion (US$149.5 million) subsidy under the Ministry of Economic Affairs A+ Corporate Innovation and R&D Enhancement program, the ministry said yesterday. The US memorychip maker’s program aims to back the development of high-performance and high-bandwidth memory chips with a total budget of NT$11.75 billion, the ministry said. Aside from the government funding, Micron is to inject the remaining investment of NT$7.06 billion as the company applied to participate the government’s Global Innovation Partnership Program to deepen technology cooperation, a ministry official told the
AI TALENT: No financial details were released about the deal, in which top Groq executives, including its CEO, would join Nvidia to help advance the technology Nvidia Corp has agreed to a licensing deal with artificial intelligence (AI) start-up Groq, furthering its investments in companies connected to the AI boom and gaining the right to add a new type of technology to its products. The world’s largest publicly traded company has paid for the right to use Groq’s technology and is to integrate its chip design into future products. Some of the start-up’s executives are leaving to join Nvidia to help with that effort, the companies said. Groq would continue as an independent company with a new chief executive, it said on Wednesday in a post on its Web
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s leading advanced chipmaker, officially began volume production of its 2-nanometer chips in the fourth quarter of this year, according to a recent update on the company’s Web site. The low-key announcement confirms that TSMC, the go-to chipmaker for artificial intelligence (AI) hardware providers Nvidia Corp and iPhone maker Apple Inc, met its original roadmap for the next-generation technology. Production is currently centered at Fab 22 in Kaohsiung, utilizing the company’s first-generation nanosheet transistor technology. The new architecture achieves “full-node strides in performance and power consumption,” TSMC said. The company described the 2nm process as
RSS