UMC puts second 300-millimeter fab into production

With demand for semiconductors recovering, United Microelectronics Corp. (UMC), the world’s second-largest contract chip maker, announced Tuesday that its second chip fabrication plant (fab) to employ 300-millimeter silicon wafers has begun commercial production.

The fab, located in Singapore, is run by UMC subsidiary UMCi Pte. Ltd. and began pilot production last year. UMC expects the fab to produce 10,000 wafers per month by the end of 2004, giving the company added production capacity at a time when contract chip makers, including UMC and rival Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC), are seeing their capacity utilization rates hit levels close to 100 percent.

UMCi is UMC’s second 300-millimeter fab to enter commercial production. The company’s first 300-millimeter fab, Fab 12A, is located in Tainan, Taiwan and began commercial production in 2002. Fab 12A is expected to produce 20,000 wafers per month by the end of this year.

With a significantly larger surface area, 300-millimeter diameter wafers can produce up to 2.5 times more chips than is possible with the 200-millimeter wafers used in older fabs. This translates into lower production costs for chips and increased productivity, UMC said.

The announcement that UMCi has entered commercial production comes just one week after UMC announced it had completed the acquisition of a 200-millimeter fab in Hsinchu, Taiwan, formerly owned by Taiwanese chip vendor Silicon Integrated Systems Inc., for NT$10.7 billion ($320.4 million).

That acquisition was a way to quickly expand production capacity without incurring the costs of constructing a new fab, the company said.