Chip foundries gear up as demand rises

Chip fab United Microelectronics Corporation (UMC) is to bring forward its 12-inch fab expansion in Taiwan, as chip makers the world over salivate over the prospect of revitalised demand for their slivers of silicon.

UMC's expansion of its Fab 12A will begin churning 65nm products ahead of shedule the firm said, with plans for 45 and 40nm nodes in the pipeline

The fab is going head to head with rival Taiwan Semiconductor Manufacturing Company (TSMC) which also adding fabs and expanding its existing ones like billy-o.

To compete with its larger rival, UMC's plans to issue up to 1.298 billion new shares in a bid to raise $411 million to fund its expansion plans.

According to analysts Reuters spoke to, other chip makers such as Texas Instruments and Global Foundries may invest in UMC. Glo Fo is an interesting one as it is currently in the process of borging Singapore's Chartered Semiconductor, which it recently acquired.

TSMC has outlined plans to move to a 20nm process in 2012 and UMC will have it work cut out to compete without some aggressive investment.

Global Foundries is poking fingers in as many pies as cross its path. It does after all have a wee firm by the name of Intel to compete with too.