LONDON Foundry chip manufacturer United Microelectronics Corp. (Hsinchu, Taiwan) wants to involve a strategic partner in plans to raise capital according to local reports and market watchers have indicated GlobalFoundries Inc. (Sunnyvale, Calif.) as a candidate.
Alternatively a consortium based around a mix of GlobalFoundries, a leading customer and leading equipment supplier ASML Holdings NV could provide a way forward for UMC. GlobalFoundries, which has a major fab under construction in New York, is eager to add capacity quickly and tapping into UMC could allow it to achieve that using the leverage of an additional cash injection.
Earlier in May UMC said it was planning a private placement of no more than 10 percent of its total shares or about $400 million. Analysts noted at the time that UMC lags behind TSMC, Samsung and GlobalFoundries in process technology and that UMC might cut a deal with either IBM or GlobalFoundries or a leading customer such as Texas Instruments (see Analyst: UMC seeks R&D partnership).
Now UMC's board has approved plans for the issue of up to 1.3 billion new shares worth about $400 million, subject to approval by shareholders, according to a Digitimes report.
UMC wants to involve a strategic partner and is open to involvement from any strategic partner through the private placement, the report said, quoting chief financial officer Chi Tung Liu.
Texas Instruments, ASML and GlobalFoundries are among the potential investors for the placement, the report said, referencing the Chinese Language Economic Daily News, which in turn cited unnamed sources.
Advanced Technology Investment Co., the Abu Dhabi owned parent of GlobalFoundries was rumored to have approached UMC in January 2010 with a view to taking a stake in UMC and securing additional production capacity. The link was denied at the time.