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Hsinchu, Taiwan - There's no longer a free lunch in the semiconductor wafer foundry business.
Facing capacity shortages for the foreseeable future, more and more fabless chip companies are finding it a necessary evil-and will even go to great lengths-to invest in fab space in return for guaranteed wafers. Just last week, for example, Taiwan's United Microelectronics Corp. (UMC) announced the formation of its second independent wafer foundry venture, this time with six U.S. fabless chip companies, including ATI Technologies Inc., Integrated Silicon Solutions Inc., Oak Technology Inc., Opti Inc., Trident Microsystems Inc., and a partner to be named later.
Under the plan, Hsinchu-based UMC will break ground on a new 8-in., 0.25- to 0.35-micron fab here by the end of 1995 or the beginning of 1996, with plans to go into production by mid-1997. The fab will cost $1 billion. UMC will take a 50% stake in the new venture, while the other partners will hold the remaining shares in return for guaranteed capacity.
This venture-to be run like an independent company-follows the formation of a similar but separate joint wafer venture last July between UMC and two other fabless IC companies, Alliance Semiconductor Corp. and S3 Corp. This alliance, which will be run separately from the latest venture, calls for...