United Microelectronics (UMC) will be expanding production capacity in 2019, and is looking to grow its presence in the automotive electronics sector and also the China market.
UMC's planned takeover of Mie Fujitsu Semiconductor (MIFS), a 300mm wafer foundry joint venture between the Taiwan-based foundry house and Fujitsu Semiconductor, will help it grab a bigger presence in the auto electronics segment, Digitimes Research believes. MIFS is ISO/TS 16949 certified, and has already cut into the supply chain of Japan-based auto vendors.
Fujitsu Semiconductor has agreed to transfer its entire stake in MIFS to UMC, which already owns 15.9% of MIFS, with the transfer targeted for completion on January 1, 2019. Following its MIFS takeover, UMC will be able to expand its overall 12-inch fab capacity by 35,000 wafers monthly. The additional 12-inch wafer fab will also bring in US$640 million in UMC's overall revenues annually.
In addition, UMC will be able to raise new funds through listing its HeJian-led China operations on the Shanghai Stock Exchange (SSE) to finance its local wafer fab and operation expansions. HeJian, representing UMC's China businesses which include HeJian's 8-inch wafer plant, United Semi and its 12-inch plant, and Shandong-based United DS Semiconductor specializing in IC design services, will apply with the China Securities Regulatory Commission for listing on the SSE as an A-list offering.
Combined production capacity at UMC's 12-inch fab in Xiamen and HeJian will reach 254,000 8-inch equivalent wafers in 2018, when UMC's overall production capacity will expand by 3.5% on year to 7,562,000 units.
UMC's China-based fab expansions, coupled with its takeover of MIFS, will allow UMC to expand its overall production capacity by 1,277,000 8-inch equivalent wafers, or 16.9%, to a total of 8,839,000 units in 2019, according to Digitimes Research.