Singapore will soon home another chip factory by Taiwan’s UMC

• UMC plans to build a new advanced manufacturing facility next to its existing 300mm fab in Singapore. 
• The first phase of this greenfield fab will have a monthly capacity of 30,000 wafers with production expected to commence in late 2024.
• The new fab, with an investment of US$5 billion, will be one of the most advanced semiconductor foundries in Singapore, providing UMC’s 22/28nm processes.

Chipmakers around the world, since last year, have been scrambling to expand their manufacturing capacity with some players even planning on global expansion. The world’s fourth largest contract chipmaker, Taiwan’s United Microelectronics Corp., is also planning on widening its operations in the region, with another chip factory next to its existing 300mm fab in Singapore.

In a press statement, UMC, its board of directors, has approved a plan to build a new advanced chip factory with a planned investment of US$5 billion. The first phase of the greenfield fab will have a monthly capacity of 30,000 wafers with production expected to commence in late 2024.

“The new fab (Fab12i P3) will be one of the most advanced semiconductor foundries in Singapore, providing UMC’s 22/28nm processes.,” it said. To recall, UMC has operated as a pure-play foundry supplier in Singapore for more than 20 years. The location is also the company’s designated R&D center for advanced specialty technologies. 

To account for the Fab12i expansion, the company’s 2022 capex budget will be revised upward to US$3.6 billion. UMC also said that the new chip factory is backed by customers who have signed multi-year supply agreements in order to secure capacity from 2024 and beyond. That directly means there is a robust demand outlook for UMC’s 22/28nm technologies for years to come, driven by 5G, IoT, and automotive mega-trends. 

“Specialty technologies to be manufactured in the new facility, such as embedded high voltage, embedded non-volatile memory, RF-SOI, and mixed signal CMOS, are critical for a broad range of applications, including smartphones, smart home devices, and emerging electric vehicle applications,” UMC said.

Additionally, the company expects the new fab will play an important role in satisfying growing demand in these markets and help alleviate the structural shortage of foundry capacity, especially on 22/28nm processes.

UMC’s chairman Stan Hung said the company’s “Singapore fab is UMC’s flagship innovation hub and numerous new R&D projects in collaboration with customers will enter production when the new facility comes online. The semiconductor undersupply has crystallized the need for greater visibility and mutual risk mitigation within the industry.”

Hung also noted that the latest investment is the result of the shared vision and close collaborations with their key customers. “We are committed to doing our part to restore balance in the industry value chain and to the long-term success of our customers.” UMC clients include Samsung, MediaTek and Qualcomm.

Besides UMC, world’s top chipmaker, Taiwan Semiconductor Manufacturing Co. is also expanding its capacity of the 28nm chip production technology in Nanjing, China. It is also building its first-ever chip plant in Japan for 22 To 28nm technology. Within its home market, TSMC is also building an additional 28nm plant in the southern city of Kaohsiung.

Elsewhere, top Chinese chipmaker Semiconductor Manufacturing International Co. is also constructing plants in Shenzhen, Shanghai and Beijing that can support 28nm grade technology. For context, 28nm is seen as the most cost-effective production technology given its wide range of applications, from microcontrollers, WiFi and Bluetooth, to consumer electronics processors and driver ICs.

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