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Abu Dhabi's ATIC Reportedly Seeks to Acquire UMC

Taipei, Jan. 7, 2010 (CENS)--State-owned Advanced Technology Investment Company (ATIC) of Abu Dhabi is reportedly seeking to acquire United Microelectronics Corp. (UMC), Taiwan's second largest contract IC maker, following its takeover of Singapore's Chartered Semiconductor last year, in order to expand its global market share, according to the Chinese-language Economic Daily News (EDN), sister publication of Taiwan Economic News (TEN), citing information from the circle of foreign investors.

UMC refused to comment on the news yesterday (Jan. 6), but its share price jumped at the daily limit of 7% in mid-session yesterday, closing at NT$18.4, a one-year-and-a-half high, up NT$1.2, with trading volume expanding to 140,000,000 shares, a three-month high. The company's market value hit NT$260 billion yesterday. UMC was reported to be the acquisition target of private equity funds for a number of times in the past, which, however, never materialized.

ATIC acquired a 62% stake in Chartered Semiconductor for US$1.8 billion, about NT$56.25 billion, last year and merged it with Globalfoundries (GF) under its auspices, with Chartered Semiconductor as the surviving firm, which then becomes the world's second largest contract IC maker, outpacing UMC. Chartered Semiconductor now boasts over 14% of global market share, slightly higher than UMC's 14%.

The takeover of UMC, if materialized, will greatly strengthen Chartered Semiconductor's hands in competing with Taiwan Semiconductor Manufacturing Co. (TSMC), the world's leading contract IC maker.

Some industry insiders, however, questioned the feasibility of ATIC's offer, due to the different manufacturing processes between Chartered Semiconductor and UMC. In addition, UMC has a number of subsidiaries, greatly complicating the acquisition process.

(by Philip Liu)
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