UMC takes small share in Silicon Integrated Systems

THE SECOND biggest chip foundry, United Microelectronics Corp (UMC) bought a 2.3 per cent share in Silicon Integrated Systems (SIS), a chipset company.

But that tiny share will not stop SIS inviting UMC executives to take three out of seven of its board positions in mid-January, prompting speculation that there could be more to this deal than meets the eye.

SIS ran into trouble with UMC this year after the latter sued it for alleged patent infringements on process technology at its semiconductor firm.

SIS has its own fabrication plant and earlier this year postponed an attempt to find enough cash to build another fab. UMC used to build its chips before it got its own fab. Fabrication plants are very expensive and much of the industry expressed surprise that SIS took this route.

Earlier this month we reported that chipsets from SIS were on allocation, and it may be in the interest of the smaller player to get into bed with one of the big foundries, who typically take chip designs and "print" them onto silicon.

Meanwhile, the price of SIS shares on the Taiex bourse rose again although there is a limit on how high shares can go during one trading day to avoid too much fevered speculation. µ