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Innovative win-win collaboration model secures long-term capacity for customers as global chip demand continues to outpace supply
United Microelectronics Corporation (NYSE: UMC; TWSE: 2303) ("UMC"), a leading global semiconductor foundry, today announced plans to expand capacity at its 300mm Fab 12A Phase 6 (P6) in Taiwan’s Tainan Science Park through a collaboration model with several of its leading global customers. Under this mutually beneficial arrangement, these customers will make a deposit that secures their long-term chip supply at P6 using pre-determined pricing that will enable UMC to grow organically and meet its long-term profitability and market relevance goals. The P6 expansion is scheduled for production in the second quarter of 2023, with total investment for the project earmarked at NT$100 billion. In addition to UMC’s previously announced 2021 CAPEX of US$1.5 billion, the bulk of which is allocated towards equipment for the company’s Fab 12A P5 site adjacent to P6, total UMC investment in the Tainan Science Park will reach approximately NT$150 billion over the next three years.
Stan Hung, chairman of UMC said, "UMC’s expansion plans follow a return based strategy that focuses on business growth while maintaining sustainable profitability. At the same time, we are constantly exploring innovative methods to enhance the competitiveness of our customers. Recent market dynamics have provided us and our customers an opportunity to reinforce our capital expenditure strategy within our ROI boundary, while trying to alleviate the long term capacity constraint in the supply chain. Within these mature 12" and 8" nodes lies many critical components that play a vital role in the IC supply chain; the combination of these conditions lead us to believe that our role and position as a foundry service are experiencing a structural change that requires an innovative win-win collaboration model in order to help alleviate the industry wide chip shortage. This P6 program is the result of our collaboration. We are pleased to engage on this new capacity expansion project that involves shared commitment from a diversified group of customers."
SC Chien, co-president at UMC, added, "This P6 cooperation model serves as a strategic partnership with our customers that aims to secure mutual commitment and healthy collective growth for all companies involved. The P6 program is supported by a multi-year product alignment between UMC and the involved customers with a loading protection mechanism to ensure that capacity maintains at healthy utilization rates. P6 will be equipped with 28nm tools that have the flexibility to produce smaller nodes down to 14nm, creating a straightforward migration path to accommodate customers’ future development roadmaps. Furthermore, the building structure for UMC’s Fab 12A P6 is already built, adding a significant time-to-market advantage versus building a new fab from scratch. We look forward to leveraging our No. 1 worldwide foundry market position in multiple areas such as 28nm OLED driver IC production so we may further strengthen UMC’s semiconductor industry position and capture new market opportunities down the road."
UMC has operated in the Tainan Science Park since November 1999, when Fab 12A was established as Taiwan's first 300mm fab. Fab 12A is currently operating at a capacity of approximately 90K 300mm wafers per month (wpm), with an additional 10K wpm being installed at P5 starting in 2021. The P6 project will add 27.5K more wpm production capability when fully equipped, effectively creating a long-term earnings growth driver for the company. With UMC planning to hire an additional 1000 employees to support this and other areas of the company’s operations, UMC continues to fulfill its commitment to be a global corporation that is deeply rooted in Taiwan.
UMC (NYSE: UMC, TWSE: 2303) is a leading global semiconductor foundry. The company provides high quality IC production with a focus on both logic and specialty technologies to serve every major sector of the electronics industry. UMC’s comprehensive technology and manufacturing solutions include logic/RF, embedded high voltage, embedded flash, RFSOI/BCD and IATF-16949 automotive manufacturing certification for all its manufacturing facilities. UMC operates 12 fabs that are strategically located throughout Asia with a maximum capacity of more than 750,000 8-inch equivalent wafers per month. The company employs approximately 19,500 people worldwide, with offices in Taiwan, China, United States, Europe, Japan, Korea and Singapore. For more information, please visit: http://www.umc.com.
Note from UMC Concerning Forward-Looking Statements
Some of the statements in the foregoing announcement are forward-looking within the meaning of the U.S. Federal Securities laws, including statements about introduction of new services and technologies, future outsourcing, competition, wafer capacity, business relationships and market conditions. Investors are cautioned that actual events and results could differ materially from these statements as a result of a variety of factors, including conditions in the overall semiconductor market and economy; acceptance and demand for products from UMC; and technological and development risks. Further information regarding these and other risks is included in UMC’s filings with the U.S. Securities and Exchange Commission. UMC does not undertake any obligation to update any forward-looking statement as a result of new information, future events or otherwise, except as required under applicable law.
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UMC Corporate Communications
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