Powerchip Technology Corp (力晶科技) yesterday said it has inked an agreement with Hefei Construction Investment and Holding Co Ltd (合肥市建設投資控股) to invest in a Chinese chipmaker to manufacture driver ICs for LCD TV panels.
The move came two months after the company was reported to be in talks with the Hefei City Government to jointly build a 12-inch fab in the city, the capital of Anhui Province, China.
“At this stage, Powerchip is not planning to get a majority stake in Hefei Jejing Electronic Co Ltd (合肥合晶電子). We are more likely to have less than a 10 percent stake,” company spokesman Eric Tang (譚仲民) said by telephone.
“China is a market with a large potential for growth. A big portion of our revenue comes from China,” Tang said. “We will provide the technology for chip manufacturing.”
Hefei Jejing Electronic, which was formerly run by the Chinese government, plans to spend 13.53 billion yuan (US$2.18 billion) on the new 12-inch fab, which will produce driver ICs for LCD TV panels on 0.15 micron, 0.11 micron and 90-nanometer process technologies, Powerchip said in a filing with the Taiwan Stock Exchange.
The new fab, which will have a monthly capacity of 40,000 12-inch wafers, will commence operations in 2018 or 2019, Tang said.
That would make Powerchip the second Taiwanese chipmaker to operate a 12-inch fab in China after United Microelectronics Corp (UMC, 聯電).
UMC, the nation’s second-largest contract chipmaker, is scheduled to make 12-inch chips at a new plant next year, using 55-nanometer and 40-nanometer technologies, via a US$6.2 billion three-way venture with the Xiamen City Government and Fujian Electronics & Information Group (福建電子信息集團).
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), the world’s biggest contract chipmaker, said earlier this month that it is still evaluating the feasibility of building a 12-inch plant in China. TSMC currently operates an 8-inch plant in Shanghai.
Powerchip started shifting away from DRAM manufacturing three years ago to focus on driver ICs, power management ICs and complementary metal oxide semiconductor (CMOS) image sensors, with major clients including Apple Inc, Samsung Electronics Co and Xiaomi Corp (小米).
The company reported a net profit of NT$12.03 billion (US$386.4 million) last year, or NT$5.43 per share, on revenue of NT$40.12 billion.
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