UMC chairman to resign in 2007 but He Jian affair rolls on

UMC's Tsao to resign in 2007
TAIPEI, Taiwan — Robert Tsao, chairman of foundry chipmaker United Microelectronics Corp., said Wednesday (June 22) that he would resign in 2007 and recommend chief executive Jackson Hu take over the position.

The move comes as Tsao faces increasing pressure from a criminal investigation into allegedly illegal investment by UMC in Chinese foundry He Jian Technology Corp. Tsao was questioned earlier this month, but no charges were filed against him. UMC demanded Wednesday that either charges are brought against its chairman or the entire matter dismissed.

Tsao said he would resign earlier if found guilty.

"Over the last months, the UMC-Hejian affair has become highly politicized and resulted in widespread social discourse and debate on whether or not the prosecutor's office will press formal charges against anyone," the company said in a statement delivered to the Taiwan Stock Exchange. "In order to avoid any future public conflict or opposition related to this incident, UMC respectfully requests that the Hsinchu prosecutor's office presses charges against UMC chairman Robert Tsao for all suspected crimes in the quickest manner possible."

The investigation has dragged on since February, when more than 120 investigators raided UMC offices, looking for evidence of investment activity in He Jian, which runs 8-inch wafer fabs in Suzhou, China, a city west of Shanghai.

In Taiwan, semiconductor manufacturers may open up or invest in 8-inch fabs in China only after they have received government approval. The process is intended to serve as a check on the flow of advanced technology to China, which Taiwan views as a potential military enemy.