JVC Shifts LCOS-TV Chip Contracts to Fujitsu, SMIC From UMC

Taipei, Dec. 13, 2005 (CENS)--Lured by lower foundry charges, JVC of Japan has recently decided to leave United Microelectronics Corp. (UMC) and turn to Fujitsu Ltd. As well as Semiconductor Manufacturing International Corp. (SMIC) for foundry capacities for its liquid-crystal on silicon (LCOS) TV chips.

LCOS-TV suppliers pointed out that suppliers of TV components have sought ways to pare down production costs considering the fact that the TV's prices have fallen sharply. Compared with Taiwan's foundry suppliers in front-end and back-end sectors, many foreign suppliers including Toshiba and SMIC are offering less-expensive services.

JVC, currently the world's No. 1 supplier of LCOS TVs, has contracted Fujitsu to make the chips for its TVs with definition of 720 pixels and SMIC to make the chips for its TVs with definition of 720p and TVs with definition of 1080p.

The JVC's decision has raised concerns over UMC and its LCOS affiliates. UMC has equipped itself with LCOS-chip foundry capability and opened United Microdisplay Optronics Corp. to develop the chips. United Microdisplay, capitalized at NT$700 million (US$21 million at US$1:NT$33), lost NT$300 million or so (US$9 million) throughout the first three quarters this year.

LCOS-TV suppliers pointed out although Philips and Intel have left the business, Japanese suppliers remained optimistic about the market. Mainland Chinese market for the appliance, they estimated, would become lucrative thanks to demands spurred by the 2008 Beijing Olympic Games.