[News] UMC Optimistic About Second Half Business Outlook, While AI Could Capture 10-20% Market Share

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According to a report from Liberty Times, Taiwanese foundry UMC stated yesterday that the company’s operations in the second quarter would see a slight increase compared to the first quarter, and the second half of the year would be better than the first half.

With UMC’s technology and processes, the company estimated that it can capture about 10-20% of the AI foundry market share, which is expected to drive future business growth.

• Edge Computing to Become Widespread in 4 Years

At UMC’s shareholder meeting yesterday, Co-General Manager Jason Wang stated that semiconductor applications are becoming increasingly diverse and important. The most promising growth areas include autonomous vehicles, AI servers, and AI PCs.

UMC sees significant growth potential in high-speed transmission and power management. In high-performance computing (HPC), UMC will focus on back-end integration, including interposers and advanced 3D IC packaging.

Jason Wang pointed out that AI is currently in early stages, and thus more focused on building the infrastructure for high-speed computing. However, once the infrastructure is complete, the market will gradually expand to the widespread adoption of edge computing, which he estimates will take about four years.

UMC plans to position itself early, developing technologies that align with customer applications. UMC is optimistic about the market prospects and has high expectations for the future, Wang noted.

UMC’s CFO Chitung Liu stated that while UMC does not have advanced processes for producing HPC chips in the AI field, it has made significant progress in edge computing and related process technologies. With UMC’s technology, processes, and capacity, it is estimated that the company can still capture a 10-20% share of the AI foundry market, which is considerable and will be a major driver of future operational growth.

UMC currently produces CoWoS advanced packaging-related silicon interposers at its Singapore plant, with monthly capacity doubling to 6,000 wafers this year. UMC will continue to invest according to market conditions, according to Liu.

• Effects of U.S.-China Trade War Order Transferring Take At Least Six Month to be Seen

Regarding the benefits of diversification amid the U.S.-China trade war, Liu mentioned that it takes time for customers to redesign and transition orders. It can take at least six to nine months in the short term for the effects to be seen, and up to one to two years in the long term for orders to be successfully transitioned.

Currently, there are no significant effects from diversification in the short term. However, UMC’s production is diversified across regions including Singapore, Japan, China, and Taiwan, with collaborations with Intel in Arizona, USA. Thus, UMC can meet customer needs regardless of where they choose to manufacture, Liu explained.

Liu reiterated the stance from last month’s briefing, stating that the situation in the first half of the year has improved from the economic downturn, and second-quarter revenue is expected to see a slight increase compared to the previous quarter. He hopes for better performance in the second half of the year.

In terms of application markets, the short-term performance of the automotive and industrial sectors appears weak, but growth is expected in the medium to long term. On the other hand, prospects for the communication and consumer sectors in the second half of the year are expected to be better than the first half.

Read more

• [News] UMC’s Global and Local Orders Surge Amid U.S. Tariffs on China and Networking Market Recovery
• [News] UMC Ventures into US Production of 12nm Mature Chips through Collaboration with Intel

(Photo credit: UMC)