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Hitachi, UMC to launch joint wafer venture

The companies say they have agreed to launch a joint venture to manufacture 300mm wafers for Hitachi's products and UMC's foundry customers.

Hitachi and United Microelectronics Corporation today said they had agreed to launch a joint venture which would manufacture 300mm wafers.

The new company, yet to be named, will combine Tokyo-based Hitachi's process and manufacturing technology with Taiwan-based United Microelectronics Corporation's (UMC) silicon foundry experience.

Half of the capacity of the joint venture will be reserved for Hitachi's products, with the other half reserved for products supplied to UMC's foundry customers. The joint venture will be established by the end of February 2000 and start mass production sometime in 2001.

Hitachi and UMC will hold a 60 percent and 40 percent equity stake, respectively, in the venture.

Hitachi will contribute its 0.18-micron and beyond process technology, as well as its experience in the development of 300mm manufacturing systems. UMC will also contribute its 0.18-micron and beyond technology to the company.

The "300 mm" designation refers to the size of the wafer. Current silicon wafers measure 200mm across. The shift to 300mm wafers will essentially double the size of the wafers. Larger wafers allow semiconductor manufacturers to squeeze out more chips per wafer. Ideally, profits will rise because chip output will outpace an increase in fixed costs.

UMC, which manufactures processors for semiconductor designers that do not maintain their own fabrication facilities, should be one of the beneficiaries to the shift to 300 mm wafers. Applied Materials and other semiconductor equipment makers should also benefit because of the necessary investment in new "steppers" and other manufacturing equipment. The shift will coincide with a wave of demand for semiconductors, according to analysts and trade groups.

Although more attractive from the processors-per-wafer perspective, the shift to 300 millimeter wafers will require intense investment in new manufacturing equipment. Financial figures from Sematech, a trade group for semiconductor equipment manufacturers, estimate that the conversion could cost as much as $50 billion. Most manufacturers are timing the shift to the larger wafers to occur toward the end of 2001.