Source: Ascannio /

United Microelectronics Corp. (UMC), the world’s 3rd largest foundry, is rumoured to be considering a new 300mm fab in Singapore. UMC currently operates one 300mm fab in Singapore, with a monthly capacity of 4,5000 wafers, focusing on speciality technologies between 0.13 micron to 40 nanometer. 

According to the rumor, UMC is mulling to invest in NT$100 billion in the new fab, which will have a minimum capacity of 20,000 to 30,000 wafers per month. It is also speculated that the new fab will focus on process nodes below 40 nm. As of Q2 2021, the 22/28nm processes account for 20% of UMC’s revenue.

Responding to the rumor, UMC indicated that it had been evaluating capacity expansion in locations where it already had a production presence, without settling down any specific location.

UMC boosted its capital expenditure to US$2.3 billion in 2021, the highest since its 2018 decision to suspend R&D below 12nm. According to the company, 85% of this expenditure will be spent on its 300mm capacity. 

Geopolitical dynamics have brought new opportunities 

Under its “Manufacturing 2030” agenda, Singapore has been trying to rejuvenate its semiconductor industry: in 1986, the city-state, after Taiwan, became the second country in the world to enter the foundry business. Under strong governmental support, especially its sovereign wealth fund Temasek, Singapore’s Chartered Semiconductor Manufacturing (CSM) was once the world’s 3rd largest foundry. Eventually overtaken by Taiwan’s foundry industry led by TSMC, CSM was acquired in 2009 by Abu Dhabi’s sovereign wealth fund Mubadala, and later integrated into GlobalFoundries. Today, Singapore only accounts for only 5% of global wafer fabrication capacity. 

Changing geopolitical dynamics and the Singaporean government’s latest industrial policies have now offered a glimpse of hope for the country’s chip industry, especially when Singapore is geopolitically stable. In June, UMC’s major rival GlobalFoundries decided to invest US$4 billion to boost its 300mm capacity in Singapore. Tom Caulfield, GlobalFoundries CEO, once expressed his concerns on Taiwan’s geopolitical position: “70 percent of all foundry manufacturing takes place in Taiwan, a couple of hundred miles away from China, from one company,” said the CEO. 

A strategy to diversify 300mm capability 

When UMC set up a production facility in Singapore 20 years ago, it obtained a 10-year tax break from the Singaporean government. Fab 12i, as the UMC facility was named, began operation in 2004, and was Singapore’s first 300mm fab. Jason Wang, co-president of UMC, indicated that UMC had been pursuing a strategy to diversify its 300mm capability across Asia. According to him, UMC would continue to explore growth opportunities in line with the strategy by evaluating capacity expansion opportunities. 

Alongside the one in Singapore, UMC also operates three other 300mm fabs,  respectively in Taiwan (Fab 12A), China (Fab 12X), and Japan (Fab 12M).

Since April 2021, UMC also introduced a new collaboration model with its customers during the expansion of Fab 12A: they would have to make a deposit to secure chip supplies for five years. The move sought to relieve the chip shortage crisis while ensuring that market volatility wouldn’t lead to redundant capacity – a factor deterring many chipmakers from expanding mature-node capacity. If UMC indeed planned for capacity expansion in Singapore, a similar collaboration model might also be applied.


Reference: Anue