UMC denies reports on employee poaching from China

Taipei--United Microelectronics Corp. (UMC, ??), the second largest contract chip maker in Taiwan, Monday denied a local media report that a Chinese semiconductor firm has poached a number of the company's high-end chip developers.

UMC denied it has experienced a major loss of personnel to China, rejecting a report that Shanghai Huali Microelectronics Corp., a wafer foundry operator in China, poached about 50 UMC employees.

The report claimed that the 50 UMC former employees worked on developing the Taiwanese firm's 28 nanometer process which has become a major source of sales for the chip maker.

According to the report, Huali's move to hire UMC's 28nm development team reflected the Chinese firm's ambitions to develop the same technology and overcome its current technological bottleneck.

Although Huali has been conducting production based on the 28nm process on a trial basis in a 12-inch wafer plant, the Chinese firm has announced its intention to expand the 12-inch factory. This marks a move to focus more on the development of the 28nm process and trial production for the new capacity is scheduled to start in 2018.

At present Huali's sales focus mainly on lower-end 55nm and 40nm processes.

UMC has made significant progress in 28nm process development. In the fourth quarter of last year, chips made using that process accounted for 22 percent of the company's consolidated sales, worth NT$38.31 billion (US$1.24 billion), up from 21 percent in the third quarter.

In 2016, chips made using the 28nm process made up 17 percent of UMC's total sales, up 7 percentage points from a year earlier.

The report indicates that firms in the semiconductor sector in China have been offering attractive compensation packages to attract Taiwanese professionals at a time when the Chinese government is looking to cultivate its own integrated circuit business.

In January, Tsinghua Unigroup (????), a Chinese IC giant backed by the authorities in Beijing, confirmed that it had hired Sun Shih-wei (???), former UMC vice chairman, after Sun retired from the Taiwanese firm in 2015.

Market analysts said the company hired Sun because Unigroup felt the former UMC executive would help to accelerate the development of foundry operations.

Shares in UMC rose 0.44 percent to close at NT$11.45 after hitting a low of NT$11.35 on the Taiwan Stock Exchange on Monday after the company denied the reports of employee poaching.

Source: Focus Taiwan News Channel