UMC warned that 28nm chips may be oversupplied

According to DIGIMIES, Jason Wang, co-general manager of UMC, said that the 28nm process segment may be oversupplied after 2023.

Image source: DIGITIMES

"Based on the announced capacity expansion plans, we do believe that the oversupply of 28nm will occur after 2023. But we still believe that the oversupply situation will be moderate," Wang Shi, co-general manager of UMC, said during a Q&A session of the company's earnings call on January 25. "Given that 28nm will be a 'sweet spot' for many applications, demand will continue to grow." Wang Shi said.

UMC said its planned $3 billion capital expenditure this year includes its "Fab 12A P6 expansion plan in partnership with customers," while revising its monthly production target of 27,500 units ahead of the expanded plant to 32,500 units.

The P6, the sixth phase of the UMC Fab 12A facility, will be equipped with flexible tools that can produce nodes from 28 nm or less to 14 nm. Wang Shi said that the expanded P6 plant is expected to be put into production in the second quarter of 2023.

Wang Shi also said that up to 80% of the orders obtained by UMC for the 28nm process manufacturing are multi-year contracts.

TSMC is expected to start offering 28nm manufacturing services at its Nanjing facility in the second half of 2022. TSMC has also reached an agreement with Sony to establish a joint venture plant in Kumamoto, Japan, for 22nm and 28nm process manufacturing, with production scheduled to begin by the end of 2024. TSMC also plans to build a new plant in Kaohsiung, Taiwan, where additional 7nm and 28nm chip production lines will be set up, scheduled to start production in 2024. (Proofreading/Stan)