UMC obtains approval for Xiamen fab investment

Taipei-United Microelectronics Corp. (UMC), the second largest contract chipmaker in Taiwan, has secured regulatory approval to increase its investment in a joint fab located in Xiamen in southeastern China, according to the Investment Commission.

In a statement on Monday, the commission said UMC is planning to pour an additional US$600 million into the 12-inch fab -- United Semiconductor (Xiamen) -- to expand its future production capacity.

The Xiamen fab became operational in mid-November 2016 with paid-in capital of US$2.05 billion. UMC pledged to invest US$1.35 billion, with Xiamen Municipal People's Government and Fujian Electronics & Information Group investing the remaining amount.

So far, UMC has poured US$750 million into the joint fab, according to the commission, and the US$600 million just approved by the government will complete its pledge for the joint venture.

The partners of the joint venture have put US$1.2 billion into the first phase of development of the Xiamen fab, and the new UMC funds are expected to be used for the second stage of the fab's development, the commission said.

The Xiamen fab currently rolls out 12,000 12-inch wafers every month. UMC Chief Financial Officer Liu Chitung (???) was cited by the local media as saying monthly production capacity is expected to rise to 16,000 units in the second quarter of next year.

UMC's investment in the joint Xiamen fab was one of the three applications by Taiwanese companies to invest in China approved by the commission on Monday.

The commission said it issued a green light to Fubon Life Insurance Co., one of Taiwan's leading life insurers, to acquire a 5.6 percent stake in Hangzhou-based China United Insurance Group for 1.75 billion Chinese yuan (US$264 million).

Through the investment, Fubon Life Insurance will indirectly own stakes in the Chinese group's subsidiaries, including China United Insurance Holding Co., to help it penetrate China's life insurance market, the commission said.

The commission also approved a plan by HannStar Display Corp., a small and medium-sized flat panel supplier in Taiwan, to invest US$25 million in subsidiary HannSpirit (BVI) Holding Co., located in the British Virgin Islands, for a project to assemble LCD monitors.

A green light was also given to Hon Hai Precision Industry Co., the world's largest contract electronics maker, to remit US$50 million to invest in Icreate Investment Ltd. in the Cayman Islands for general investment purposes.

On the same day, three foreign investors -- Germany's Allianz Life, Dutch power generating asset operator AXIA Power Holdings and American members-only warehouse club Costco -- received approval to invest a total of US$130 million in Taiwan, the commission said.

Source: Focus Taiwan News Channel