The share prices of three major contract chipmakers, including United Microelectronics Corp (UMC, 聯電), were yesterday boosted by media speculation that the firms are in talks with customers to sign new multiyear supply agreements with fixed prices and volumes amid a dearth of chips.
Shares of UMC, the nation’s second-largest contract chipmaker, rose 1.78 percent to close at NT$62.8 in Taipei trading, while Vanguard International Semiconductor Corp (世界先進), a supplier of display driver ICs and power management chips, saw shares rise 0.34 percent to NT$149. Powerchip Semiconductor Manufacturing Corp’s (力積電) shares climbed 0.88 percent to NT$66.61.
The Chinese-language Economic Daily News yesterday reported that customers of UMC, Vanguard and Powerchip have agreed to buy chips at higher prices and fixed volumes for two to three years.
Photo: Grace Hung, Taipei Times
The new contracts would take effect next year, the report said.
This came after it was reported that the world’s top contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), was hiking its prices by 20 percent as it wanted to maintain its gross margin at 50 percent or more.
TSMC shares increased 1 percent to NT$605 yesterday.
As chip shortages are expected to continue into next year, UMC last month said that more customers were discussing longer-term supply contracts to secure capacity at agreed prices and volumes.
In April, the Hsinchu-based chipmaker signed agreements with customers to invest NT$100 billion (US$3.6 billion) in expanding capacity, mostly for 28-nanometer chips, at a 12-inch fab, dubbed P6, at Tainan’s Southern Taiwan Science Park (南部科學園區).
The agreements would not take effect until 2023, when the P6 fab ramps up production in the second quarter of that year, UMC said.
The fab, which produces more than 87,000 12-inch wafers a month, would later upgrade to the 14-nanometer process, it said.
“The P6 [fab’s capacity] is covered by the contracts,” UMC told investors last month, adding that customers are required to put down an initial payment to secure capacity.
UMC said it expects demand to continue outpacing supply through the end of next year, driven by increasing demand for chips used in 5G-related applications, the Internet of Things and electric vehicles.
Capacity was tight at all of its technology nodes for 8-inch and 12-inch wafers, and its factories were fully utilized, the chipmaker said.
Vanguard said earlier this month that it had clinched long-term agreements with existing customers.
The contract terms would cover newly increased capacity only, it said, adding that customers were willing to pay higher prices to cover increases in manufacturing costs.
SEEKING CLARITY: Washington should not adopt measures that create uncertainties for ‘existing semiconductor investments,’ TSMC said referring to its US$165 billion in the US Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) told the US that any future tariffs on Taiwanese semiconductors could reduce demand for chips and derail its pledge to increase its investment in Arizona. “New import restrictions could jeopardize current US leadership in the competitive technology industry and create uncertainties for many committed semiconductor capital projects in the US, including TSMC Arizona’s significant investment plan in Phoenix,” the chipmaker wrote in a letter to the US Department of Commerce. TSMC issued the warning in response to a solicitation for comments by the department on a possible tariff on semiconductor imports by US President Donald Trump’s
The government has launched a three-pronged strategy to attract local and international talent, aiming to position Taiwan as a new global hub following Nvidia Corp’s announcement that it has chosen Taipei as the site of its Taiwan headquarters. Nvidia cofounder and CEO Jensen Huang (黃仁勳) on Monday last week announced during his keynote speech at the Computex trade show in Taipei that the Nvidia Constellation, the company’s planned Taiwan headquarters, would be located in the Beitou-Shilin Technology Park (北投士林科技園區) in Taipei. Huang’s decision to establish a base in Taiwan is “primarily due to Taiwan’s talent pool and its strength in the semiconductor
Industrial production expanded 22.31 percent annually last month to 107.51, as increases in demand for high-performance computing (HPC) and artificial intelligence (AI) applications drove demand for locally-made chips and components. The manufacturing production index climbed 23.68 percent year-on-year to 108.37, marking the 14th consecutive month of increase, the Ministry of Economic Affairs said. In the first four months of this year, industrial and manufacturing production indices expanded 14.31 percent and 15.22 percent year-on-year, ministry data showed. The growth momentum is to extend into this month, with the manufacturing production index expected to rise between 11 percent and 15.1 percent annually, Department of Statistics
An earnings report from semiconductor giant and artificial intelligence (AI) bellwether Nvidia Corp takes center stage for Wall Street this week, as stocks hit a speed bump of worries over US federal deficits driving up Treasury yields. US equities pulled back last week after a torrid rally, as investors turned their attention to tax and spending legislation poised to swell the US government’s US$36 trillion in debt. Long-dated US Treasury yields rose amid the fiscal worries, with the 30-year yield topping 5 percent and hitting its highest level since late 2023. Stocks were dealt another blow on Friday when US President Donald
RSS