United Microelectronics Corp (UMC, 聯電), the world’s third-largest contract chipmaker, is to invest US$5 billion in a new manufacturing facility in Singapore to make 22-nanometer chips, it said yesterday.
The first phase of the investment would add 30,000 12-inch wafers per month to UMC’s capacity, with production expected to start in 2024, the Hsinchu-based chipmaker said in a statement.
The new facility would be built next to UMC’s other Singapore 12-inch fab, Fab12i. The new plant comes as chip supply remains tight due to demand from 5G applications, Internet-of-Things devices and vehicles.
Photo: Grace Hung, Taipei Times
“The new fab is backed by clients who have signed multiyear supply agreements to secure capacity from 2024, which points to a robust demand outlook for UMC’s 22-nanometer and 28-nanometer technologies for years to come,” the statement said.
Clients are to pay a deposit to secure capacity, a new model implemented last year to cope with supply constraints, it said.
Specialty technologies to be manufactured in the new facility — such as embedded high-voltage technology, embedded non-volatile memory, radio frequency silicon-on-insulator technology and mixed signal CMOS — are critical for a broad range of applications, including smartphones, smart home devices and electric vehicle applications, UMC said.
“The company expects the new fab to play an important role in satisfying growing demand in these markets and help alleviate the structural shortage of foundry capacity, especially on 22-nanometer and 28-nanometer processes,” it said.
To account for the expansion, the chipmaker would increase its capital spending budget to US$3.6 billion this year from a previous estimate of US$3 billion.
“We are excited to expand our 300mm operations in Singapore, which would enable the company to further diversify our manufacturing footprint,” UMC chairman Stan Hung (洪嘉聰) said. “We are committed to doing our part to restore balance in the industry value chain and aid the long-term success of our clients.”
The Singaporean government supports UMC’s expansion.
“We strongly welcome and are pleased to support UMC in the expansion of its wafer fabrication and research and development operations in Singapore,” Singapore Economic Development Board Chairman Beh Swan Gin (馬宣仁) said. “This is in line with Singapore’s vision to further grow and deepen Singapore’s role in the global supply chain for semiconductors.”
In a separate statement submitted to the Taiwan Stock Exchange, UMC said that its board of directors yesterday approved a proposal to distribute a cash dividend of NT$3 per share, the highest level in about 25 years.
That represented a payout ratio of 65.65 percent based on the chipmaker’s earnings of NT$4.57 per share.
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