UMC denies rumors of building a new fab in Japan

Taiwanese semiconductor manufacturer United Microelectronics Corporation (UMC) has denied rumors that it is considering investing 500 billion yen to build a new fab in Mie County, Japan. According to Taiwan Business Times, the rumor suggested that UMC was planning to build the new fab in the existing factory area, but the company has responded that there is no such plan in the works.

UMC's expansion in Japan

UMC has been expanding its operations in Japan in recent years. In 2019, the company acquired Fujitsu Semiconductor's 12-inch wafer fab in Kuwana, Mie Prefecture, and established a USJC subsidiary. In April 2022, UMC announced that it would be collaborating with DENSO to build the first 12-inch wafer production line in the USJC plant in Japan.

Demand for automotive chips

Taiwanese media have pointed out that the majority of insulated-gate bipolar transistors (IGBTs) are currently produced on 8-inch wafers. While there may be an oversupply of 8-inch wafers in the second half of 2022, in the medium and long term, production capacity will be difficult to expand. This has led to questions about how UMC plans to meet the long-term demand for automotive chips.

Meeting long-term demand for automotive chips

A legal person has stated that power semiconductors produced on 8-inch or 6-inch wafers in the past have begun to be produced on 12-inch wafers in recent years, but this is more difficult. If the cooperation between UMC and DENSO is successful, it will provide effective production capacity to meet the long-term demand for automotive chips.

UMC's declining revenue

In January 2023, UMC's revenue fell to NT$19.59 billion, a 15-month low. This represents a month-on-month decrease of 6.47% and a year-on-year decrease of 4.31%. It remains to be seen how UMC will address the challenges of expanding production capacity while meeting long-term demand for automotive chips.

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