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UMC Integrates Four IC Design Affiliates Into One

2008/04/10 | By Ken Liu

Taipei, April 10, 2008 (CENS)--United Microelectronics Corp. recently integrated four of its IC design affiliates-ITE Tech Inc., Afa Technologies Inc., Chip Advanced Technology Inc., and Smedia Technology Corp.-into one, a move viewed as the foundry's attempt to outdo MediaTek Inc. in terms of integrated strength.

MediaTek is Taiwan's No.1 design house by revenue and No.1 supplier of digital-TV chips. ITE is another UMC-held design house that is trying to move in on MediaTek's turf.

To make its affiliate competitive in the combat, UMC decided to integrate the four affiliates' resources. Baseline date for the consolidation is set on January 1, 2009. The integration will see ITE become the only surviving company, whose paid-in capitalization will increase to NT$1.89 billion (US$63 million at US$1:NT$30) and whose annual revenue will likely surge at least 50%.

ITE was opened 12 years ago and made NT$4.8 after tax per share last year alone. The company recently diversified into digital-TV chip segment from computer-chip design.

Afa has recently branched out into TV-demodulator design after long involvement in Flash control ICs. Chip Advanced has been dedicated to power-management ICs while Smedia has specializing in video chips.

ITE executives pointed out these companies will integrate their specializations to focus on digital-TV chips. Industry watchers noted the combination represents UMC's third bid to take on MediaTek in chip-design sector after its Silicon Integrated System (SiS) and Novatek Microelectronics shifted profession to TV chips from computer chips and mobile-phone chips.

The four-in-one combination is said to be UMC's biggest case of this kind in recent years.