[News] UMC’s Global and Local Orders Surge Amid U.S. Tariffs on China and Networking Market Recovery

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According to Taiwan’s Economic Daily News, UMC has recently engaged in discussions with global giants such as Texas Instruments and Infineon about long-term cooperation plans. Additionally, Taiwan’s two leading IC design companies, MediaTek and Realtek, have seen their inventories of WiFi 6/6E chips depleted, prompting them to increase their orders with UMC.

TrendForce recently reported that the White House announced on May 14th the imposition of additional tariffs on semiconductor products manufactured in China. This move has accelerated a shift in supply chain orders, leading Taiwanese foundries to receive increased orders, boosting capacity utilization beyond expectations.

For the second half of this year, Vanguard’s capacity utilization is expected to rise above 75%, PSMC’s 12-inch capacity utilization will reach 85-90%, and UMC’s overall capacity utilization will settle between 70-75%.

UMC’s orders from overseas clients are largely driven by the U.S. tariffs on Chinese semiconductor imports, which are projected to double to 50% by 2025. This has spurred a wave of supply chain relocations, with UMC leveraging its diverse manufacturing footprint to attract long-term cooperation plans from companies like Texas Instruments, Infineon, and Microchip.

From the perspective of Taiwanese market, UMC has benefited from a recent recovery in the networking sector. Taiwan’s top two WiFi 6 chip suppliers, MediaTek and Realtek, responding to customer restocking demands, have begun to increase their orders for WiFi chips with UMC.

Recent revenue data from Realtek indicates a rebound in the networking market. In April, Realtek’s consolidated revenue reached NT$10.068 billion, a 11.4% increase month-over-month and a 21.9% increase year-over-year, marking the first time in 20 months that monthly revenue has surpassed NT$10 billion.

MediaTek’s consolidated revenue in April was NT$42.028 billion, a 16.74% decrease month-over-month, yet still the second highest on record for the period, with a 48.25% year-over-year increase. Foundry sources indicate that MediaTek has placed additional orders for the third quarter, suggesting that networking customers are set to upgrade specifications this year.

UMC’s consolidated revenue in April was NT$19.741 billion, up 8.67% month-over-month and 6.93% year-over-year, reaching a 16-month high. UMC previously projected that as inventories in the computer, consumer, and communication sectors return to healthier levels, overall wafer shipments would see a slight increase this quarter. However, in the automotive and industrial sectors, slower-than-expected inventory digestion has kept demand subdued.

(Photo credit: UMC)