United Microelectronics Corp (UMC,
The equipment was sold to Happy Wealth Holdings Ltd, said UMC spokesman Alex Hinnawi, who refused to give further details about the buyer. Last month, a Chinese-language newspaper said UMC planned to sell chipmaking equipment to China.
The sale comes after a global slump in chip demand left more than half of UMC's production capacity idle. It is upgrading plants with newer technology to cut costs and return to profitability.
"This is positive," said Ernie Tam, who holds UMC shares as part of the US$2 billion he helps manage at Baring Asset Management Ltd. "If UMC is operating at a utilization rate below 50 percent, why not sell some of the older equipment?"
The sale represents about 10 percent of UMC's total production capacity. It aims to sell up to a third of total capacity by next year.
The sale to Happy Wealth comes after the newspaper reported Jan. 18 that UMC was planning to sell chipmaking equipment to China through a unit in Japan. UMC declined to comment on the report, saying only that it is selling equipment to a third-party broker who will eventually decide the final buyer.
UMC shares were unchanged at NT$41.80.
The equipment is capable of producing 35,000 8-inch silicon wafers a month, with transistors measuring between 0.25 micron and 0.35 micron in width. UMC's most advanced chips have 0.13-micron transistors, which are the smallest produced commercially by any company, including Intel Corp, the biggest chipmaker.
Chipmakers are trying to cut production costs and improve the efficiency of their products by cramming more transistors on a semiconductor. By making chips smaller, the companies increase the number of chips made from each silicon wafer.
UMC plans to spend billions of dollars to open three 300mm silicon-wafer plants, one in Taiwan and two in Singapore.
One of the plants is a US$3.6 billion venture in Singapore with Infineon Technologies AG of Germany. The plant may cut production costs by as much as a third by more than doubling the number of chips that can be made from 200-millimeter wafers.
The second Singapore plant is a joint venture with Advanced Micro Devices Inc, the second-largest maker of computer processors. The project will be housed under the same roof as the venture with Infineon. UMC hasn't disclosed the cost of the plant.
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