Second Largest Chipmaker Shuts Japanese Plant

Second Largest Chipmaker Shuts Japanese Plant

"Because of declining demand from Japanese clients amid fast changing global economic and industrial trends, compounded by insufficient supply of power following the 2011 earthquake, ... UMC Japan's operation cost could not be effectively lowered," the company said.

United Microelectronics Corp. (IW 1000/881), the world's second biggest contract microchip maker by revenue, has decided to close its plant in Japan due to weak demand, officials said Wednesday.

"In a meeting on August 21, the board arrived at a decision to put an end to the foundry service in Japan and dissolve its fully owned entity UMC Japan," the company said in a filing to the Taiwan Stock Exchange.

UMC is best known for the manufacture of microchip wafers for major brands abroad. It is second only to the Taiwan Semiconductor Manufacturing Company  in this role.

UMC completed a buyout of the unit in Japan in 2009 after acquiring a stake from Nippon Steel Semiconductor.

"Because of declining demand from Japanese clients amid fast changing global economic and industrial trends, compounded by insufficient supply of power following the 2011 earthquake, ... UMC Japan's operation cost could not be effectively lowered," the company said.

The plant, which had a monthly capacity of 20,000 eight-inch wafers, posted an accumulated net loss of 1.6 billion yen ( US$20 million) as of the end of June, it said.

Copyright Agence France-Presse 2012

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