Insight Bite: UMC Tap into Car Chip Market with Fujitsu Foundry Takeover

Despite experiencing a general slowdown over the past few years, the semiconductor industry has seen a resurgence in 2019.

The year has been marked by several billion dollar deals, and smaller acquisitions including United Microelectronics’ purchase of Mie Fujitsu Semiconductor, which was finalised last week after government approval.

Back in 2014 the acquisition agreement was first inked, initiating a process that began with the transfer of a 15.9 percent stake in Mie Fujitsu to UMC. With the transfer of the final 84.1 percent of shares, Mie Fujitsu will now be renamed United Semiconductor Japan Co, and will focus on creating chips for the Japanese automotive market.

With expertise in embedded applications, including low power consumption process technology and non-volatile memory, Mie Fujitsu already has an existing customer base in the automotive sector, and is well-situated to help UMC tap into growing demand for the next generation of car chips.

“UMC is experiencing high demand from mature 12″ processes. With new applications in 5G, IoT, automotive and AI requiring these technologies, we anticipate the market conditions driving this demand to remain strong for the foreseeable future” said UMC co-president Jason Wang in a statement. “The acquisition of a fully qualified, equipped, and volume production proven 12″ facility provides greater time and ROI advantages compared to building a fab from scratch, which would cost several billion dollars and several years to construct and equip.”

The acquisition, which is valued at around $520 million, is one of several blockbuster chip deals that have taken place in 2019, leading research firm IC insights to suggest the year will be the third busiest yet for semiconductor mergers and acquisitions.

More registrations of new cars, stringent government regulations on safety and emissions, and the arrival of autonomous and electric vehicles, are all helping to make the automotive chip sector is one of the fastest growing segments of the semiconductor market.

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