Chip wafer shipments forecasted to grow amid tariff uncertainties by UMC
Breaking News: UMC's Upcoming Quarter Forecast and 12nm Collaboration Unveiled
By Lisa Wang / Staff reporter
Looks like UMC, this badass Taiwanese chipmaker and your go-to gal for all things semiconductors, is expecting a growth of up to 7 percent in wafer shipments this quarter and a 75 percent factory utilization rate. Talk about killing it in the chip game!
But shield your eyes, folks, because things aren't all sunshine and rainbows. That dang US President Donald Trump's unpredictable tariff policies have thrown some confusion over the company's business projections for the second half of the year, as per UMC's CFO Liu Chi-tung.
However, the uncertainty surrounding US tariffs hasn't seemed to impact customer orders as of yet, according to Liu. Some customers are being cautious, but others are moving full steam ahead. So in the grand scheme of things, it's all good for now.
Now, you asked for some juicy gossip, right? Well, Liu revealed that customers have been requesting UMC to speed up the new 12-nanometer capacity expansion collaboration with Intel Corp. Apparently, all the political drama and chip reshoring interest have resulted in more demand for said collaboration.
Liu also shared a little secret - UMC is hot on track with its planned schedule to ramp up 12-nanometer chip production in 2027 at Intel's Arizona manufacturing facility. But let's not get our hopes up too high - no official 2027 production target has been explicitly mentioned yet.
Contrary to rumors flying around, UMC is denying any talks with GlobalFoundries Inc to form a joint venture to steer clear of US semiconductor tariffs. But that doesn't mean other collaborative opportunities aren't on the table.
Now, just a heads-up - UMC reported its lowest profit in approximately 19 quarters recently. Quarterly net profit dropped by 8.5 percent and 25.6 percent year-on-year to NT$7.78 billion. The sad news continued with earnings per share sinking to NT$0.62 compared to NT$0.68 in the last quarter and NT$0.84 in the previous year.
Here's some good news, though - UMC expects its gross margin this quarter to rebound to about 30 percent, compared to last quarter's 26.7 percent. The growing demand for chips used in communication, computers, and consumer electronics will drive up the factory utilization rate, making this quarter a potential winner for the company.
Finally, for the whole year, UMC projects a revenue growth of more than 3 percent, outpacing a low-single-digit percentage increase for the world foundry sector.
Want more deets? Here's the inside scoop on UMC's 12nm collaboration and capacity developments:
- Intel & UMC 12nm Process Partnership: Don’t mind the technical jargon, but UMC and Intel have got their heads together to develop a 12nm process toolkit using Intel’s infrastructure and UMC’s bulk CMOS technology. The aim is to create a mutually beneficial scenario for both parties.
- Production Location: Likely Intel's fab in Arizona, but more specifics are yet to be revealed.
- Timeline: UMC has its eyes set on 2027, but it’s pretty hush-hush about the exact production target. The focus is on the initial 12nm node development rather than specifying production milestones at this stage.
In case you weren't already excited enough, UMC is mainly focusing on 22nm technology expansion right now. With projects like Singapore Phase III Fab, strong 22nm revenue growth, and a global diversification strategy, it's fair to say that UMC is making strategic moves to stay at the top of its game.
- UMC's CFO, Liu Chi-tung, mentioned that despite uncertainty surrounding US tariffs, customer orders for the company have not been affected.
- Liu revealed that customers have been requesting UMC to expedite the 12-nanometer capacity expansion collaboration with Intel Corp, due to increased demand caused by political drama and chip reshoring interest.
- Contrary to rumors, UMC has denied any talks with GlobalFoundries Inc to form a joint venture to avoid US semiconductor tariffs.
- Despite a recent dip in profit, UMC projects a revenue growth of more than 3 percent for the whole year, outpacing a low-single-digit percentage increase for the world foundry sector, with a focus on 22nm technology expansion.
