Expand capacity to handle 8-inch out of stock
It is understood that UMC currently has two 12-inch plants and eight 8-inch plants. Each process accounts for the overall revenue share, 14-nm is about 2~3%, 28nm is about 12%, and 40nm is 30%. The main customers include MediaTek, Qualcomm, etc.
UMC said that in the second quarter, the overall capacity utilization rate has reached 97%, and it can ship 1.85 million inches of silicon wafers per month. The results of the second quarter show that under the impetus of strong demand in computing and communications, UMC The 8-inch and 12-inch technologies are fully utilized.
Wang Shi, general manager of UMC, said that the second quarter operating results reflect the strong demand for 8-inch and 12-inch mature processes in the market.
In June, UMC's 8-inch wafer foundry capacity ushered in a short supply. At present, in addition to planning to expand the capacity of Suzhou and the ship's 8-inch plant, after 6-9 months, it can increase the production capacity by about 10,000 pieces per month. The price of the foundry of the group is mainly to transfer the increased cost of silicon wafers to customers.
According to the industry, UMC's increase has reached 20%, and the increase has never been seen before. Together with the expansion of large-scale operations and ship production capacity, it shows the company's confidence in the market afterwards.
In addition, in order to further expand production capacity, the UMC board of directors has approved the ability to expand the 12-inch production of UMC through the acquisition of Japan's Mie Fujitsu Semiconductor. The transaction is still in progress.
UMC stressed that there are many challenges in the market, but UMC is committed to expanding its global scale and increasing customer value by providing diversified production bases throughout Asia.
Going to the mainland IPO will enhance the competitiveness of UMC
On June 29, UMC passed a resolution of the board of directors and issued a public message saying that the planned subsidiary Suzhou and the ship company went to the A-share market, and the board of directors of UMC decided to manufacture the subsidiary and ship chip engaged in the 8-inch wafer foundry business (Suzhou). Co., Ltd., cooperated with another mainland subsidiary, Lixin Integrated Circuit Manufacturing (Xiamen) Co., Ltd., and Hejian Semiconductor (Shandong) Co., Ltd., a subsidiary of Hejian Company engaged in IC design, and applied for the first time from Hejian Company to China Securities Regulatory Commission. Public offering of A shares and application for listing on the Shanghai Stock Exchange.
According to UMC's plan, Hejian Technology expects to increase capital to issue 400 million new shares and raise RMB 2.5 billion. Part of the funds raised will be used to expand the monthly capacity of 10,000 pieces of an 8-inch wafer foundry under Hejian Technology. It will be completed in the second quarter of next year; at the same time, it will also be used to improve the financial structure of the core integration. The monthly capacity of the integrated core integration will be expanded from 15,000 to 25,000, and the pressure on the integration is quite high. huge.
UMC said that the main purpose of promoting the listing of Hejian Technology A-shares is to raise funds. The second is to stabilize the talent team. At present, the global semiconductor industry is fiercely competing for talents. The company's listing can give employees more incentives and help people. The stability of the team has an important impact on retaining talents, and at the same time it can attract more talents to join.
The IPO plan for the mainland is still in progress. For the possible technology transfer problem, UMC said that based on the previous experience of UMC, although there may be certain problems, it is more likely to face political risks.
However, according to the current progress, UMC has not yet reached this step.
Wang Shi said that through the A-share listing, Hejian can make good use of the raised funds, re-invest and replicate the existing successful model, expand the mainland market, further enhance the scale of production capacity, technical quality, and enhance the industry's competitive threshold and strengthen the company's existing competitive advantage. .
It can be said that UMC has acquired the Metso Fujitsu Semiconductor and plans to apply for the listing of its subsidiaries and ships in mainland China. By strategically deploying production bases in the vicinity of the Taiwan headquarters and providing logistical support, it will help UMC to strengthen its expertise. Long-term competitiveness in the field of foundry.
Trade wars bring more uncertainty
In addition, UMC expects demand in the third quarter to slow down, mainly due to the slowdown in smartphone development, rising inventory levels, and uncertainty surrounding trade tensions between the US and the US.
The market expects that UMC will continue to cultivate the mainland foundry market for many years. With the completion of the triple Fujitsu semiconductor acquisition in January 2019, the scale of revenue consolidation and the automotive customer base will increase greatly. 2019 will be the key to UMC's transformation. year.
In the second half of the year, as the smartphone production chain entered the peak season, the demand for related chips such as artificial intelligence, automotive electronics, and the Internet of Things continued to be strong. In addition, the supply of power semiconductors such as MOSFETs was in short supply, which led to a significant increase in the number of wafer foundries.
UMC has announced an increase in the 8-inch wafer foundry price, which will be reflected in the third quarter revenue, plus the 12-inch factory 28nm and 14nm and other advanced process capacity utilization rate remains high, Xiamen 12-inch factory orders are strong and The new capacity continues to open, optimistic that this quarter's revenue will grow by nearly 10% from the previous quarter.
Liu Qidong, chief financial officer of UMC, said that this year's environment is good. It is estimated that the global wafer foundry industry is expected to grow by double digits. UMC's performance outlook is optimistic this year, but the internal pursuit of profit-oriented, and will strengthen cash flow, anticipation This year's revenue growth will be lower than the industry average.
Although there are still many uncertainties between Sino-US trade in the future, UMC said it will focus on expanding its technology and providing value to customers by providing more diverse manufacturing technologies.
Regarding the progress of the UMC Xiamen plant, Wang Shi said that the current monthly production capacity is 17,000 pieces, which will be expanded to 25,000 pieces in the first half of next year. The 22nm process is also scheduled to be trial production in the first half of next year.