This week numerous additional details appeared on the recent strategic alliance between Silicon Integrated Systems (SiS) and United Microelectronics Corporation (UMC) (see this news-story). Apparently, due to the recent agreement there were made some changes in the plans of both companies what is presently quite important because SiS has a lot of problems to resolve, just like UMC.

According to the recent information from Dow Jones Business News, UMC acquired nearly 4.50% stake in the number three core-logic developer in the world. In addition, UMC is to receive three seats in the seven-member director’s board at SiS.

It seems that it is not so profitable for Taiwanese core-logic developers to own a manufacturing facility these days. SiS has been unable to fulfil the demand on its products for a long time already. On the other hand they did not succeed in building additional 12-inch fab due to loads of reasons: initially, the location of the fab was chosen in the Tainan Science-Based Industrial Park (TSIP), but it was unveiled afterwards that a high-speed rail-line would be build nearby, creating vibrations that would affect the manufacturing process of semiconductors. Later the company decided to found their fab in Luchu Science-Based Industrial Park (LSIP) in Kaohsiung County, but delayed its plans due to global economic downturn and overall market conditions. Since the company now formed their strategic alliance with one of the biggest contract manufacturers, it does not make sense to build another own fab. Moreover, it is logical to sell even the current fab off so that not to spend money on development and deployment the new manufacturing processes. At the moment there are rumours floating around that UMC is likely to buy SiS’ 8-inch fab even despite of the fact that the former already owns a number of 8-inch facilities in Taiwan.

Based on the recent reports from Taiwanese press, SiS asked UMC to produce additional 650-series of core-logic products that have been in tight-supply for months due to the gaining popularity of integrated chipsets in China.

All-in-all, it is all about the fact that SiS will again transform into a fables company that will only develop products and ask third-party to make them. On the other hand, UMC is to receive a big and strong client it has been looking for.