United Microelectronics Co (UMC, 聯電), the world’s No. 3 contract chipmaker, yesterday said it would not consider rejoining the race to develop 7-nanometer (nm) technology after bigger rival GlobalFoundries Inc abandoned a plan to invest in it.
UMC in July last year said that it would not allocate capital for process technologies below 14 nanometers as it restructured to focus on boosting returns on investments.
The Hsinchu-based chipmaker said at the time that “it is difficult to address the 10-nanometer or 7-nanometer markets,” citing a smaller market size compared with less-advanced, but matured, technologies.
The company said its growth would come from end demand for Internet of Things and automotive applications, which do not required advanced chips.
When asked whether UMC would change its mind and redirect resources toward developing 7-nanometer technology, UMC co-president Chien Shan-chieh (簡山傑) said: “No, we won’t.”
Semiconductor companies face challenges to push technological boundaries because of costs and development hurdles, Chien said.
That is probably part of GlobalFoundries’ decision to halt development of 7-nanometer technology, he said.
Supply and demand imbalances, as well as a persistent shortage of silicon substrate are also challenges for chipmakers, he said.
Chipmakers have seen their 8-inch fabs under supply constraint, while 12-inch fabs have a supply surplus, he said.
“Our 14-nanometer [technology] is fully utilized currently. We have small 14-nanometer capacity,” Chien said. “Our 8-inch fabs are fully utilized” as well.
UMC declined to provide further information about its 14-nanometer technology, given its limited customer base.
The company in the second quarter last year had installed capacity to produce 2,000 12-inch wafers per month.
The chipmaker began shipping 14 nanometer chips, the most advanced technology offered by UMC, to clients in the second quarter of last year.
UMC said 14-nanometer technology contributed 3 percent of its revenue, which totaled NT$38.85 billion (US$1.27 billion) last quarter, up from 2 percent in the prior quarter and 1 percent a year earlier.
While 28-nanometer technology was the firm’s largest source of revenue, accounting for 26 percent last quarter, it was down from 30 percent in the first quarter due to sagging demand.
“UMC’s strategy is very clear. It is good, as the company focuses on more mature technologies, which deliver a higher gross margin,” Clark Tseng (曾瑞榆), director of the industry research and statistics unit of SEMI Taiwan, told reporters on the sidelines of a news conference in Taipei.
Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) and Samsung Electronics Co are likely to be the main suppliers of 7-nanometer technology on a contract basis, Tseng said.
TSMC has led its rivals in ramping up 7-nanometer technology in the second quarter of this year.
China’s Semiconductor Manufacturing International Corp (中芯) has said it plans to invest in 7-nanometer technology, but it would lag far behind TSMC and Samsung for at least four or five years in offering such advanced technology, Tseng said.
Taiwan’s semiconductor industry is forecast to grow production value by 6 percent year-on-year to NT$2.61 trillion this year, Tseng said.
Next year, the growth rate is likely to accelerate to 8 percent and fall back to 6 percent in 2020 and 2021, or about NT$3 trillion, he said.
STEPPING UP: The firm has also asked employees to work in split shifts from this week and to halt all but essential overseas business travel from next month Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has implemented a remote work policy for employees not on production lines in an attempt to curb the spread of COVID-19, the world’s largest contract chipmaker said yesterday. This is the first time in the Hsinchu-based company’s history that it has launched a large-scale remote work policy, joining global technology companies, such as Apple Inc and Google, that encourage employees to work from home. The chipmaker has also asked employees to work in split shifts from this week, it said. As the number of virus infections continues to climb worldwide, TSMC has urged employees to halt unnecessary
A two-hour drive south of Amsterdam in Veldhoven, workers decked out head-to-toe in protective gear toil in vast assembly halls. Before entering the inner sanctuary of the facilities, they meticulously layer on masks, gloves and special socks. A single speck of dust or a hair can have devastating effects on production. The result of all this painstaking process is an environment that is 10,000 times more purified than outside. As COVID-19 grips the world, it might just be the safest place to work right now. The teams belong to ASML Holding NV, which holds a de facto monopoly on the industry of
DBS Bank Ltd yesterday hacked its GDP growth forecast for Taiwan this year to 0.9 percent, down from its estimate of 2.3 percent two months earlier, in light of the COVID-19 pandemic and increasing financial market volatility. The bank’s latest forecast was even lower than London-based IHS Markit Ltd’s estimate of 1 percent, while other research institutes’ projections range from 1.6 percent to 2.6 percent. Taiwan’s economic momentum is being negatively affected by the pandemic, DBS said. The rapid spread of the disease from Asia to Europe and the US has dampened the bank’s previous expectation of a “V-shaped” global rebound in the
DOWNSIDE RISKS: Firms have a ‘very low’ chance of boosting investment returns in the next two years, making it hard for them to improve their capitalization, an analyst said Taiwanese life insurers wanting to improve their capital structure face strong headwinds this year, given prolonged low interest rates and economic impacts derived from trade protectionism and the COVID-19 pandemic, Taiwan Ratings Corp (中華信評) said on Friday. The local life insurance sector also still has high asset risks and such risks are susceptible to market volatility, the local arm of Standard & Poor’s Global Ratings said. Since last year, major financial holding companies — including CTBC Financial Holding Co (中信金控), Cathay Financial Holding Co (國泰金控) and Shin Kong Financial Holding Co (新光金控) — have announced plans to raise fresh capital to
RSS