Global Sources
EE Times-Asia
Stay in touch with EE Times Asia
?
EE Times-Asia > Manufacturing/Packaging
?
?
Manufacturing/Packaging??

UMC grabs large piece of 28nm business

Posted: 30 Oct 2014 ?? ?Print Version ?Bookmark and Share

Keywords:28nm? foundry? UMC? TSMC?

United Microelectronics Corp. is taking a huge slice of the 28nm business, which is dominated by Taiwan Semiconductor Manufacturing Company Ltd. (TSMC).

UMC said that 28nm products accounted for 3 per cent of its foundry revenue during the third quarter this year, up from 1 per cent during the previous quarter. The company expects continuing increases from the process technology during the rest of the year.

"Twenty-eight nanometre revenue will more than double during the fourth quarter compared with the third quarter," UMC CEO Po-Wen Yen said during a conference call to announce the company's third-quarter financial results. "We have more than 20 customers engaged, more than 15 in tape-out, and five in production."

Twenty-eight nanometre has been the sweet spot for foundry leader TSMC for nearly two years, virtually the sole supplier in that technology node to customers such as Qualcomm and Apple in communications products including smartphones and tablets. During the third-quarter this year, 28nm accounted for 34 per cent of TSMC's total wafer revenues, while 20nm reached 9 per cent. (In related news: Small feature size seen to drive foundry sales)

UMC has "turned a corner in volume," Bank of America Merrill Lynch analyst Daniel Heyler said.

UMC said its 28nm yield progress for poly-SiON and gate-last, high-K metal gate products has continued to improve, helping to attract new customers and diversify the company's customer base in advanced nodes.

The company's 14nm FinFET process technology is on track and will be available for customer tape-outs during the first half of 2015, CEO Yen said.

No 2015 capex forecast

UMC declined to forecast its capital expenditure for 2015 even as rival TSMC said it would increase spending to more than $10 billion next year. The $1.3 billion UMC earmarked for this year is down from the $1.5 billion the company budgeted for 2013.

Capex in 2015 will be related to cash inflow from operations, UMC CFO Chitung Liu said: "It will depend on the market outlook."

UMC said its capacity utilisation in the fourth quarter this year will drop to about 90% from 93% during the third quarter.

Plans for new China fab

UMC has a joint venture for 12-inch (convert to mm except for displays) wafer foundry services with the Xiamen Municipal People's Government and FuJian Electronics and Information Group in China.

Initially, UMC plans to hold a one-third stake in the venture expected to cost a total $6.2 billion, increasing ownership to two-thirds by around 2020 and eventually 100 per cent over a period of up to 10 years, CFO Liu said. UMC's initial outlay is aimed at reducing the company's financial burden.

The China venture will use 40-55nm process technology to make chips for customers in such businesses as SIM cards. The process technology used in the joint venture company will meet Taiwan government restrictions, UMC says. Taiwan wants its chipmakers investing in China to use a process that is double the nanometre gate width of state-of-the-art technology. The company declined to say whether the fab would be converted to more advanced technology in the future.

"The Taiwan government doesn't allow 28nm technology in China yet," said Liu.

The Taiwan government restricts chip investments by domestic companies in China on concerns it will lose jobs and core technology. UMC currently owns an 87 per cent stake in China's HeJian Technology, which provides eight-inch wafer foundry services.

UMC aims to collaborate with partners in Asia in capacity deployment. The company claims the model will establish manufacturing centres that will serve local markets and help global customers mitigate geographical risks in the supply chain.

UMC's recent announcement of a partnership with Fujitsu Semiconductor and the joint venture in Xiamen are examples of the company's collaborative efforts, says UMC. The foundry alliance with Fujitsu includes a 40nm licensing agreement that UMC hopes will better enable it to serve the Japanese market.

Earnings slump

UMC posted third-quarter net income of $96 million, down from the $115.97 million the company reported in the same period a year ago. Profit was dragged down by equipment upgrades at the company's Singapore fab and a slowdown in UMC's new solar energy subsidiary.

- Alan Patterson
??EE Times





Article Comments - UMC grabs large piece of 28nm busine...
Comments:??
*? You can enter [0] more charecters.
*Verify code:
?
?
Webinars

Seminars

Visit Asia Webinars to learn about the latest in technology and get practical design tips.

?
?
Back to Top