Silicon Integrated Systems (SiS) has decided to spin off its graphics chip division (multimedia product division) as a new subsidiary in May or June under the name of Tu Chiang Technology (transliterated from Chinese), according to sources.

Tu Chiang would be Taiwan’s first graphics chip design firm.

Jackson Hu, head of the design support division and president of the new business development group of United Microelectronics Corporation (UMC), reportedly will become chairman of SiS’s new subsidiary. Hu joined the SiS board of directors early this year after SiS and UMC settled their patent infringement lawsuit and re-established their partnership.

Chris Lin, vice president of SiS’s multimedia product division, will become president of Tu Chiang, sources added.

UMC has been raising its stake in SiS and has pushed a restructuring project with John Hsuan, vice chairman and CEO of UMC, taking over as SiS chairman. But it is not clear whether UMC will invest in the new company, which will be capitalized at NT$500 million to NT$600 million at least, sources noted.

Other details of the spin-off are still not known. However, sources revealed that the new subsidiary is expected to be free of SiS’s amortization expense for its eight-inch wafer fab, estimated at NT$4 billion a year and of SiS’s graphics chip inventories. With a clean financial slate, the graphics chip spin-off is expected to quickly turn profitable.

Source : DigiTimes