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.
Alphabet Inc’s Google on Tuesday announced plans to buy a New York office building for US$2.1 billion, confirming its push into the US’ largest city despite the COVID-19 teleworking trend. This is the largest real-estate purchase in the US for an office building since the beginning of the global spread of COVID-19, the Wall Street Journal quoted Real Capital Analytics as saying. Google already rents the premises in Manhattan, which are located on the site of a former railroad terminal in the Hudson Square neighborhood. The Silicon Valley giant envisions a campus with a total surface area of 160,000m2 by mid-2023
‘CORE VALUES’: The contract chipmaker did not specify why the employees were dismissed, but media reports said they had leaked information about customer orders Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) has fired seven of its employees for violating the company’s “core values,” the world’s largest contract chipmaker said yesterday. While the company did not disclose exactly why it fired the seven employees, local media reports earlier in the day said that the employees had leaked confidential information about customer orders. In a statement, the company said that it fired the seven at once, adding that it released an internal notice last week to inform the entire company of the move ahead of the four-day Mid-Autumn Festival holilday, which ended on Tuesday. TSMC said it fired the seven
MILD ADJUSTMENT: Two previous efforts failed to curtail mortgage financing, although the new measures should not affect property prices, the central bank governor said The central bank yesterday tightened credit controls for second-home mortgages in specific areas and purchases of plots of land, especially in industrial parks. However, the nation’s top monetary policymaker kept its policy rate at a record-low 1.125 percent for the sixth consecutive quarter, despite revising up its GDP growth forecast for this year from 5.08 percent to 5.75 percent. “Board members factored in economic uncertainty at home and around the world,” central bank Governor Yang Chin-long (楊金龍) said, adding that growing inflationary pressure was a temporary phenomenon induced by bad weather and a low base effect for oil prices. International fuel price increases
DOWNCYCLE: Most buyers are wary about placing new orders, and although the decline could also be as little as 3%, it would be the first drop since the start of the year The average selling price of DRAM chips next quarter is expected to decline by up to 8 percent quarter-on-quarter, with memory chips used in notebook computers and consumer electronics seeing the steepest decline due to excess inventory and a shortage of components, market researcher TrendForce Corp (集邦科技) said yesterday. That means the DRAM industry is entering a new downcycle after experiencing a boom for three quarters, the longest uptrend in the history of the industry. The Taipei-based researcher said it expects the balance between supply and demand to begin tilting toward a surplus in the final quarter of this year. Most DRAM
RSS