UMC Boosts Capex to Capture More 28nm Orders

Is competition in China catching up?

by Alan Patterson - EETimes, Jan. 28, 2015 – 

TAIPEI -- UMC, the world's third-largest chip foundry, said today it will increase its capital expenditure budget for 2015 by almost a third as it aims to grab more orders in the 28 nanometer node.

The Hsinchu, Taiwan company said it has earmarked $1.8 billion for capex this year compared with the $1.4 billion it spent during 2014. During the fourth quarter of last year, UMC increased its sales revenue from 28nm chips, the company's most advanced technology node, to 7 percent, up from 3 percent during the third quarter of 2014. The doubling of 28nm revenue was in line with the company's expectations three months ago.

"We are getting more traction on 28nm," UMC CEO Po-Wen Yen said on a conference call, announcing results for the final quarter of last year. "More than five customers are in production on 28nm. We have over 20 customers engaged and more than sixty 28nm tapeouts."

UMC said it expects that 28nm products will account for "a high single-digit percentage" of its revenue during the first quarter this year. By the end of 2015, the company expects that 28 nanometer products will account for 15 to 20 percent of its total revenue.

"That was a good ramp on 28nm," said Bill Lu, an analyst with Morgan Stanley.

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