Though market cheered for TSMC's decision to produce auto chips in Europe, not many people have noticed that United Microelectronic Corp (UMC) actually has already been supplying automotive chips with specialized mature node technology overseas. UMC may enjoy at least 2-3 years' lead in supplying automotive chips when TSMC's automotive chip production plan in Europe is still on the table.
As supply chain sources indicated that TSMC is mulling to produce automotive chips in Dresden, Germany, to supply European customers such as BMW and Benz, it would take TSMC at least 2-3 years to build a fab in Dresden even if it breaks ground today.
UMC enjoys the advantage of more diversified geolocation for its fabs, with production sites located in Japan, Singapore, China (Xiamen and Suzhou), and Taiwan (Hsinchu and Tainan). UMC CFO Chi-tung Liu told analysts that UMC is one of the very few foundries that can offer multiple site choices to customers to meet their needs amid the current geopolitical tension.
"Our automotive sector delivered impressive growth in 2022, increasing 82% year over year to account for approximately 9% of the total sales now," said Jason Wang, UMC CEO during the 4Q22 earnings call. "We expect the sector will continue to be a key growth catalyst in 2023 and beyond."
TSMC CEO C. C. Wei also mentioned in its earnings call on January 12 that its auto chip business enjoyed a robust growth of 79% to account for 5% of its revenues in 2022, and said although the supply of autochips remains tight, it will be alleviated soon.
Wang disclosed that UMC continues to build a strong partnership with a world-class automotive leader, but refrained from identifying the automaker. "UMC is well-positioned to serve the market with our comprehensive portfolio of auto process technologies and facilities certified according to rigorous quality standards."
North America's contribution to the company's revenues in 4Q22 jumped to 30% from 23% a quarter ago, also a remarkable progress worth noting.
UMC's new fab near its Fab12i in Singapore is scheduled to start volume production in 2024, which is expected to monthly produce 30,000 units of 300-mm wafers using 22-28 nm node in phase 1.
The fab will process chips with specialized process technologies such as embedded high-voltage solutions, embedded non-volatile memory, RFSOI, and mixed-signal CMOS are critical for a wide range of applications such as smartphones, smart home devices, and electric vehicles.
UMC's capital expenditure (CAPEX) for 2023 will be US$30 billion, in which 90% is allocated for 300-mm wafer foundry.
Although competitors such as TSMC and China's Semiconductor Manufacturing International Corp. (SMIC) are also aggressively expanding 22-28 nm capacities, UMC CEO Jason Wang said UMC will continue to differentiate with specialized processes technologies and continue business development following the megatrends, not just limited to one customer, but targeting a diversified market as well as a number of continuous streams via UMC's specialty technology offering and quality operations.
Wang expects 22 and 28 nm to be long-lasting nodes. "We've seen that the 28 nm is still the most competitive offering in the marketplace, considering the overall factors, performance costs, capacity, availability, and acceptance," said Wang, who emphasized that its 22 nm technology has been accepted by a leading customer with their design. "We are confident the 22 nm node will continue to have business sustainability well into the next wave."
