Thursday, April 9, 2020
TSMC and UMC Planning to Expand Facilities
To Meet Demand of Chinese Clients
TSMC and UMC Planning to Expand Facilities
  • By Kim Eun-jin
  • November 25, 2019, 08:54
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Taiwanese foundries TSMC and UMC plan to expand their manufacturing facilities in China to meet the demand of fabless companies.

Taiwanese foundries TSMC and UMC are planning to expand their manufacturing facilities in China to better meet the demand of fabless companies in China. Specifically, TSMC is going to increase its monthly production capacity on a 12-inch wafer basis from 10,000 units to 15,000 units in Nanjing by the end of this year. TSMC’s facilities in the region are currently producing microcontrollers for use in consumer electronics and smartphone application processors through 16-nm processes. In addition, TSMC is going to increase the wafer-based production volume to 20,000 units next year.

Likewise, UMC will expand its 28-nm to 40-nm processes in Xiamen for an increase in 12-inch wafer-based production from 170,000 units to 250,000 units. Given that the processes are old processes, most of the products produced there are likely to be supplied to Chinese clients.

Chinese foundry SMIC, in the meantime, recorded a capacity utilization of 97 percent in the third quarter of this year with its supply to Chinese fabless companies accounting for more than 60 percent of its total supply. 14-nm FinFET processes are currently the mainstream of the company’s processes. Although the technology is behind Samsung Electronics’ and TSMC’s 10-nm or less technology, it is the most popular in the market in that it is inexpensive and free from quantum interference unlike hyperfine products.

The foundry facility expansion in China has to do with a rapid increase within China in the supply of system-on-chip products such as application processors, microcontrollers and power management integrated circuits. Huawei, in particular, is leading China’s system-on-chip industry growth by, for example, unveiling Kirin 990 as an integrated 5G processor amid U.S. restrictions.

China is accelerating the growth of its memory chip industry, too. Tsinghua Unigroup is planning to invest 800 billion yuan for DRAM production for 10 years to come and start the manufacturing of DRAM chips in 2021. In addition, Changxin Memory Technologies is expected to produce semiconductors equivalent to 40,000 wafers a month next year based on 19-nm DRAM process improvement. For the time being, the companies’ 19-nm DRAM products are likely to be supplied for use in PCs, in which application is easier than in servers running around the clock and mobile devices requiring low power.

Those Chinese companies’ plans are predicted to result in China’s self-sufficiency in terms of domestic semiconductor demand. Then, Samsung Electronics and SK Hynix will lose a very important market. For the first three quarters of this year, the South Korean companies’ sales in China totaled 28,312.9 billion won and 9,630.8 billion won, respectively. Most of the sales were derived in the Chinese semiconductor market.