United Microelectronics Corp (UMC, 聯電), the nation’s second-largest contract chipmaker, has secured regulatory approval to increase its investment in a joint fab in Xiamen, China, according to the Investment Commission.
In a statement issued 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 production capacity.
The Xiamen fab became operational in November last year with paid-in capital of US$2.05 billion.
UMC pledged to invest US$1.35 billion, with the Xiamen Municipal People’s Government and Fujian Electronics Information Group (福建省電子信息集團) 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 would 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 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 produces 12,000 12-inch wafers every month.
UMC chief financial officer Liu Chi-tung (劉啟東) was cited by 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 also issued a green light to Fubon Life Insurance Co (富邦人壽) to acquire a 5.6 percent stake in Hangzhou-based China United Insurance Group (中華聯合保險集團) for 1.75 billion yuan (US$264 million).
Through the investment, Fubon Life Insurance would indirectly own stakes in the Chinese group’s subsidiaries, including China United Insurance Holding Co (中華聯合保險控股), to help it penetrate China’s life insurance market, the commission said.
The commission also approved a plan by HannStar Display Corp (瀚宇彩晶) to invest US$25 million in British Virgin Islands-based subsidiary HannSpirit (BVI) Holding Co for a project to assemble LCD monitors.
A green light was also given to Hon Hai Precision Industry Co (鴻海精密), 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 AG, Dutch power generating asset operator AXIA Power Holdings BV and US wholesaler Costco Wholesale Corp — received approval to invest a combined US$130 million in Taiwan, the commission said.