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

UMC hits 28nm target amid falling demand

Posted: 30 Oct 2015 ?? ?Print Version ?Bookmark and Share

Keywords:UMC? 28nm? inventory? TSMC? demand?

United Microelectronics Corp. (UMC) has revealed that it is meeting its outlook for a slowed ramp of 28nm process technology because of weak demand, which is expected to persist until 2016 while the chip industry recovers from an inventory correction. Sales of products made with what the company claims as its most advanced technology node dropped to 10 per cent of its $1.1 billion in revenue for 3Q15 from 11 per cent in Q2, UMC stated.

Considered as the world's second-largest foundry, UMC's effort to capture a larger slice of the 28nm pie has stalled after larger competitor Taiwan Semiconductor Manufacturing Co. (TSMC) vowed to protect its market share in the node that has gone unchallenged for nearly five years. UMC said its third-quarter capacity utilisation slipped to 89 per cent from 94 per cent in Q2.

"Our internal target is to achieve over 15-20 per cent market share by revenue of 28nm by 2Q16," said UMC CEO Po Wen Yen, reiterating his expectations from three months ago. "We will need more time for a rebound in the coming quarters."

Demand should return to "reasonable" levels in a few months, Yen said. A slowdown in global demand and inventory reduction that will probably continue during 4Q15 have had a negative impact on business. Unit growth for smartphones, the largest business driver for chip foundries, is declining.

UMC's wafer shipments will drop by less than five per cent in Q4 from Q3 as capacity utilisation slides to the low 80 per cent range, the company said. Still, UMC is maintaining its capital expenditure budget for 2015 at $1.8 billion. TSMC, which for the first time this year led the world's chipmakers with the largest announced capital expenditure, slashed its 2015 capex by nearly a third to $8 billion from a range of $10.5 billion and $11 billion.

Retargeting 14nm

UMC may slow its push toward 14nm as the company is retargeting its first significant revenue contribution from the new node for 2H17.

In July this year, UMC said it aimed to start commercial production of 14nm FinFET products in 1H17. The company has been planning to skip 20nm and target 14nm FinFET as its next technology node to catch up with foundry rivals Samsung and TSMC.

Samsung started making 14nm FinFET chips earlier this year while TSMC entered commercial production of 16nm FinFET products in Q3. Two weeks ago, TSMC said its work on upcoming 10nm and 7nm technology nodes is proceeding well. The company will begin technology qualification for 10nm during 4Q15, and customer tapeouts will start early in 2016.

UMC said that to take better advantage of opportunities within mature nodes, it will leverage advancements made in proven technologies to help customers compete in the Internet of Things (IoT) market.

UMC said it has received multiple customer inquiries for optimized, cost-effective solutions derived from the company's 28nm high-K metal gate process. The company is working to bring a timely conversion of new 28nm requirements into production, UMC said.

- Alan Patterson
??EE Times

Article Comments - UMC hits 28nm target amid falling de...
*? You can enter [0] more charecters.
*Verify code:


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

Back to Top