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UMC to get back on its feet by 2016

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

Keywords:UMC? TSMC? foundry? FinFET?

United Microelectronics Corp. (UMC) has predicted that by 2H16, its business will recover from a slump that affected demand for communications chips starting last year. The forecast of the foundry matches that of its biggest rival, Taiwan Semiconductor Manufacturing Co. (TSMC), which said it expects demand to pick up during the latter half of this year. Market research firm Gartner Inc. has indicated that overall sales growth in the foundry segment slowed to 4.4% in 2015 from 16% in 2014.

"The inventory correction has completed its course, with normal seasonal patterns resuming for 1H16," stated UMC CEO Po-Wen Yen.

Production was impacted by weak demand. UMC's wafer shipments, in 8in equivalents, fell to 1,432,000 units from 1,481,000 units in 1Q15. The company forecasted that its wafer output will rise by about 5% during the current quarter while its utilisation rate will rise to the "high 80% range" from 82% during Q1 and 83% in 4Q15.

There were significant changes in UMC's product mix by technology, application and geography compared with a year ago.

"Europe, Japan and IDMs had a sharp decline," said Credit Suisse analyst Randy Abrams.

By geography, UMC's sales to Europe and Japan dropped while Asia increased to account for 45% of the company's total sales compared with 37% in 4Q15. North America held steady at about 48% of UMC's sales during the consecutive quarters. While UMC's sales of communications chips fell in Q1, revenue from computer-related products rose.

28nm slump

Contrary to UMC's earlier predictions, its sales of 28nm products, made with the company's most advanced process technology, slipped during Q1 to 8% of total revenue from 11% in 4Q15. UMC said that an earthquake in February this year reduced 28nm production.

Three months ago, the company said that by 2Q16, its 28nm chips would account for 15-20% of its overall sales revenue.

"We expect that in this quarter, we'll reach the 15-18% range. The yields for both 28nm poly/SciON and 28nm High-K metal gate versions are at 90%," CEO Yen said. "We expect rapid growth in customer tape-outs this year."

UMC said that during the current quarter, new product launches for wireless devices will boost end market demand for 28nm.

14nm FinFET

UMC provided an update on 14nm FinFET, its next-generation process technology.

Technology development is on track, and the company said it expects to do its first customer tape-outs later this year. UMC expects to start commercial production of 14nm FinFET by 2H17. The main applications for the new process will be communications and consumer chips, the company said.

UMC plans to jump from 28nm to 14nm to catch up with its larger foundry rivals TSMC and Samsung, which started commercial production at 16nm and 14nm nearly a year ago.

- Alan Patterson
??EE Times

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