UMC takes different tack - Semiconductors

Electronic News, June 17, 2002 by Tom Murphy

After going through a reorganization--twice--United Microelectronics Corp. (UMC) representatives say they are more market-driven than ever before. The company hammered this point home frequently during its annual technology forum in Santa Clara, Calif., last week.

What that means is the company is less sales-driven and less technology-driven than it was when capacity demand was booming in 1999 and 2000, said Fu Tai Liou, chief officer of worldwide sales and marketing for UMC.

UMC can't just develop technology in a bottle and expect all of its individual customers to design to it. That was the attitude that the company used to take, Liou said. He served as the company's CTO before he was placed in charge of sales.

Now UMC will take a look at end-markets and listen to its customers' demands before proceeding to develop a technology platform, Liou said.

"We changed for a more global view," Liou said. "We have changed our mindset. I believe any foundry can't jump to this conclusion. Even IBM will take a long time to learn this."

IBM recently disclosed that it would open up more of its semiconductor production facilities to foundry services, specifically targeting complex ASIC designers.

Driving technology to its customers meant that UMC did not meet all of its customers' needs, Liou said. Now the company's focus will be more solutions-driven so that it can match its customers' needs more closely. After all, UMC has a number of different customers and many different markets. Some of its customers need more specialized technology in certain areas than others. Liou said the company is working hard to satisfy its clients in the wireless communication space, while it is taking time during the downturn to develop more leading edge technology for its wireline communications customers.

UMC's partnership with Advanced Micro Devices Inc. (AIvID) is just such a strategic technology development. Through the deal, AMID gets capacity to a jointly developed 300mm fab now under construction in Singapore. UMC, in turn, will get a better understanding of how to produce high-performance transistors used in making PC processors. AMD can turn around and market that capability to whichever customer might need it. Liou hinted that graphics processor companies might find the technology attractive. So might wireline communications companies looking to produce a network processor.

"We can't be focused on just technology," Liou said. "We have to focus on customers' needs."

UMC is trying to distance itself from its closest rival, Hsinchu, Taiwan-based Taiwan Semiconductor Manufacturing Co. (TSMC).

TSMC has called for process technology to be standardized as companies race to design chips on leading process technologies. The widespread belief is that TSMC has enough influence to bring the industry inline with its initiatives.

UMC seems to be singing a different tune. By appealing more to its specific customers' needs, UMC is saying that if you can't get what you need on a TSMC-defined process, then come to us and we will work out a process technology. That technology platform can bring out the performance characteristics that will allow you to earn an edge against competitive chips.