2014年10月31日

UMC Takes Bigger Slice of 28nm Business

UMC Takes Bigger Slice of 28nm Business

Stands pat on capex 
10/29/2014 04:45 PM EDT 



http://www.eetimes.com/document.asp?doc_id=1324437&_mc=NL_EET_EDT_EET_daily_20141030&cid=NL_EET_EDT_EET_daily_20141030&elq=6e92aedbe1134e9686c9a4b817caee01&elqCampaignId=19922


TAIPEI — UMC, the world’s third-largest chip foundry, said Wednesday, Oct. 29, that it has grabbed a larger piece of the 28 nanometer business that is dominated by Taiwan Semiconductor Manufacturing Company Ltd. (TSMC). UMC reiterated its capital expenditure for this year at about $1.3 billion.

UMC said that 28 nm products accounted for 3% of its foundry revenue during the third quarter this year, up from 1% during the previous quarter. The company expects continuing increases from the process technology during the rest of the year.
“Twenty-eight nanometer 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 nanometer 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, 28 nm accounted for 34% of TSMC’s total wafer revenues, while 20 nm reached 9%.
UMC has “turned a corner in volume,” Bank of America Merrill Lynch analyst Daniel Heyler said.
UMC said its 28 nm 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 14 nm 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 utilization 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 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% 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 40-55 nanometer 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 nanometer 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 28 nanometer 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 percent 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 centers 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 40 nm licensing agreement that UMC hopes will better enable it to serve the Japanese market.
Earnings slump
UMC posted third-quarter net income of NT$2.92 billion (US$96 million), down from the NT$3.48 billion 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.

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