Chipmaker UMC appoints new CEO, reaffirms strategy

TAIPEI, Taiwan — Taiwan’s United Microelectronics Corp. (UMC) has appointed Jackson Hu to replace John Hsuan as chief executive officer, the company announced Wednesday in a statement.

Hu, formerly the CEO and president of SiRF Technology, joined UMC in March as the head of the company’s design support division. He replaces Hsuan, who took the reins as CEO in April 2002 from the company’s current chairman, Robert Tsao, the statement said. Hsuan will retain his position as vice chairman of the company.

Beyond shuffling the roles of senior executives at UMC, the move to appoint Hu as CEO will continue the company’s push to develop closer business relationships with key customers, said Alex Hinnawi, a spokesman for the company.

In April, that strategy was credited with increasing UMC’s first-quarter profits 87 percent over the same period last year. At the time, the company said its strategy reflected a change in the contract chip making business and would continue to play an important role in ongoing profit growth.

While UMC plans to continue to develop closer ties with its customers, the company plans to gradually divest itself of some holdings in listed integrated-circuit (IC) design companies. That divestment will be conducted in a fashion that will not adversely affect their share price or business relationship with UMC, the statement said. The company’s statement did not specify which companies it would divest from.

UMC will use the sale of these shares to boost its profitability, it said.

While UMC has promised to divest itself of some investments in listed IC design companies, the company has retained the option to invest in certain IC design companies to maintain a diversified customer base, according to the statement.

The Taiwanese contract chipmaker has taken a couple of stakes in IC design companies since resolving a manufacturing-process patent infringement case in the U.S. with PC chip set vendor Silicon Integrated Systems (SIS) last year. 

Following that decision, UMC and SIS agreed to work together more closely, with SIS shelving long-standing plans for a 300mm (12-inch) chip fabrication plant (fab) in Hsinchu, Taiwan. Instead, SIS opted to shift some production capacity to UMC, which took a financial stake of around 15 percent in the PC chip set vendor.

Besides SIS, UMC has also taken a financial stake in Silicon7 Inc., a privately held South Korean company that designs specialized SRAM (static RAM) chips.

In addition to reaffirming UMC’s partnership strategy, Hu is committed to accelerating the expansion of UMC’s 300mm wafer production capacity and to increasing investment in 90-nanometer processes for chip production, the statement said.

However, that does not necessarily mean that UMC will raise its capital expenditure (capex) forecasts for this year, currently at $500 million. “For the time being, we have not raised our capex estimates,” Hinnawi said.