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

UMC hopes for a turnaround with capex boost in 2016

Posted: 29 Jan 2016 ?? ?Print Version ?Bookmark and Share

Keywords:UMC? TSMC? capital expenditure? semiconductor?

United Microelectronics Corp. (UMC) has increased its expected capital expenditure for 2016 to nearly $2.2 billion on expectations that the chip industry will emerge from a downturn around 2Q16. The company will increase its capex from $1.8 billion last year as it estimated that demand for chips made with its most advanced 0.28nm process technology will steadily rise with each quarter this year.

UMC and its larger competitor Taiwan Semiconductor Manufacturing Co. (TSMC) have the lion's share of the 0.28nm business while foundry rivals are still ramping up the process. UMC said 28nm demand, fueled by communication chip customers, accounted for 10 per cent of its revenue in 2015, compared with about three per cent in 2014.

"We have introduced refined 28nm process variations," said UMC CEO Po Wen Yen. "UMC will continue to strengthen our 28nm technology roadmap with enhanced processes that raise chip performance while lowering power consumption."

Capex 'optimistic'

Credit Suisse analyst Randy Abrams said UMC appears to be taking a "more optimistic view on capex."

UMC and TSMC are upping the ante for capex this year. TSMC earlier this month said it will increase its capital expenditure in 2016 to an amount ranging from $9 billion to $10 billion as it aims for a bigger share of finer geometry chips. TSMC slashed its capex several times last year to a final total of $8.1 billion.

UMC said it is seeing stronger demand for automotive chips in its 8in and 12in fabs as customers migrate from consumer chips to more stringent grade 1 and grade 0 semiconductors. Grade 0 semiconductors operate in a -40°C to 150°C ambient operating temperature range, while grade 1 chips can work in a -40°C to 125°C ambient operating temperature range.

"Our exposure in the automotive supply chain will help to generate a new revenue stream for UMC," Yen added.

Utilisation slump

The company's utilisation rate in 4Q15 was 83 per cent, down from 93 per cent in the same period of 2014. UMC said its utilisation will remain in the low 80 per cent-digit range during Q1 this year as customers are still responding to an inventory correction.

The company reiterated expectations for a recovery in 2Q16, when demand for its 28nm chips will account for 15-20 per cent of its overall sales revenue. UMC forecasted that 28nm demand, led by consumer and communication products, will increase with each quarter this year.

UMC is showing renewed optimism after its effort to capture a larger slice of the 28nm pie stalled during H2 of last year when the chip business slumped and TSMC vowed to protect its 28nm market share.

- Alan Patterson
??EE Times





Article Comments - UMC hopes for a turnaround with cape...
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