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UMC Shrugs Off Middle East Expansion; Calls Intel’s 12nm Project a Must-Win

S

siliconbruh999

Well-known member
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Amid rumors that TSMC declined expansion offers in Qatar, Taiwan’s second-largest foundry, UMC, revealed on May 28 that Middle Eastern countries also approached them for collaboration, according to Commercial Times and CNA. However, the reports note that UMC showed little interest, prioritizing Singapore for future growth instead.

UMC CFO Chi-Tung Liu confirmed that Middle Eastern parties approached for potential collaboration, but since the focus was mainly on capacity expansion—a path UMC wants to avoid—the company prioritizes Singapore for future growth due to its politically neutral stance, according to the reports.

CNA reports that, according to Liu, equipment installation is in progress at UMC’s P3 fab in Singapore, which is on track for mass production next year, while the P4 fab still offers expansion potential.

Regarding the Japanese market, CNA notes that besides their factory in Mie Prefecture, UMC will continue seeking customers and partnership opportunities to expand its presence. However, building a new plant in the country is not currently a priority, as per the report.

Intel’s 12nm Project Eyes 2027 Mass Production

Regarding UMC’s partnership with Intel, Liu highlighted their focus on the 12nm process, which avoids costly EUV lithography—making it more cost-effective and ideal for high-volume production, according to Commercial Times. Dubbed a “must succeed” project, production is expected to begin in 2027, with process development and validation completing by 2026.

As per TechNews, Intel is not only a project partner but also a core customer of the 12nm initiative. The company has secured reserved capacity and is now in the chip design implementation stage. Once the process design kit (PDK) is ready, additional phases will follow, the report adds.

China’s Rising Competition

Amid the aggressive expansion of mature node capacity in China, the Economic Daily News, citing Liu, notes that UMC’s edge lies in customized processes tailored to clients. Its current priority in China will reportedly be moving from 28nm to 22nm, while many local players stay at 28nm, limiting the threat.

According to the Economic Daily News, Liu highlights a clear “China for China, Non-China for Non-China” trend, with growing local demand driving higher utilization at UMC’s China fabs. CNA reports that strong domestic orders keep UMC’s United Semi and Hejian fabs running above 75% capacity, with United Semi nearly full and consistently profitable in recent years

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[News] UMC Shrugs Off Middle East Expansion; Calls Intel’s 12nm Project a Must-Win with More Details | TrendForce News

Amid rumors that TSMC declined expansion offers in Qatar, Taiwan’s second-largest foundry, UMC, revealed on May 28 that Middle Eastern countries also ...
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Qatar is shopping for a fab, from what I heard personally, even 200mm was on the table, but you cannot build a 200mm fab today — no new tools. Basically, what they want to commit to is to fund new low profit legacy node fabs. A number of them. But the situation with DUV steppers for the older 300mm nodes is starting to look very similar to 200mm tools too. Older node fabs from the mainland vacuumed all of the older 300mm tools from the second hand market.

On the UAE side... government's own money people are very against financing a fab itself, the rest of the UAE government is not them however. Hard to predict how it will end up, just a whimsical change of narratives can sways 10 digit sums. The guy who took the decision to scrap the fab plan 10 years ago is still around in the government.
 
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"Regarding UMC’s partnership with Intel, Liu highlighted their focus on the 12nm process, which avoids costly EUV lithography—making it more cost-effective and ideal for high-volume production, according to Commercial Times. Dubbed a “must succeed” project, production is expected to begin in 2027, with process development and validation completing by 2026."

UMC is definitely a master at low cost wafers but 12nm will be competing with TSMC's N12 and N7 as well as Samsung's 12nm and 7nm. SMIC also has 14nm, 7nm, and non-EUV 5nm. It is a crowded market and Samsung pricing is very competitive. What exactly is UMC offering to differentiate? It is nice to have multiple sources but given the TSMC ecosystem and Samsung pricing I just don't see big demand here.
 
It's an interesting, win-win collaboration. UMC finds a way to improve their process technologies and offerings without the costly R&D, while Intel learns the ins-and-outs of developing technologies for foundry.
 
"Amid rumors that TSMC declined expansion offers in Qatar, Taiwan’s second-largest foundry, UMC, revealed on May 28 that Middle Eastern countries also approached them for collaboration, according to Commercial Times and CNA. However, the reports note that UMC showed little interest, prioritizing Singapore for future growth instead."

I remember when Globalfoundries was going to build a fab in the Middle East, that was funny since they said they had a lot of sand! :ROFLMAO: In my opinion Qatar would be better served building AI datacenters and capitalizing on that. Assuming the have enough water to cool them. Fabs would be too costly to run and who wants to live there?
 
Qatar is a very small country, only 250 thousand citizens. Fabs take a lot of money to run in just utilities regardless of how profitable is the final product, and how high is the operating margin, it's not a money printer some people imagine semiconductor industry to be. Some people in the UAE government have an excellent realisation of that, some have very bad.

Utilities are highly subsidised across the gulf countries. Electricity, and water are not that costly, but nowhere the near the cheapest in comparison to other countries in the industry game.
 
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Daniel Nenni said:
"Regarding UMC’s partnership with Intel, Liu highlighted their focus on the 12nm process, which avoids costly EUV lithography—making it more cost-effective and ideal for high-volume production, according to Commercial Times. Dubbed a “must succeed” project, production is expected to begin in 2027, with process development and validation completing by 2026."

UMC is definitely a master at low cost wafers but 12nm will be competing with TSMC's N12 and N7 as well as Samsung's 12nm and 7nm. SMIC also has 14nm, 7nm, and non-EUV 5nm. It is a crowded market and Samsung pricing is very competitive. What exactly is UMC offering to differentiate? It is nice to have multiple sources but given the TSMC ecosystem and Samsung pricing I just don't see big demand here.
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I guess they like the US Sticker from the wafers you get from the fabs 🤣.
 
Paul2 said:
Qatar is a very small country, only 250 thousand citizens. Fabs take a lot of money to run in just utilities regardless of how profitable is the final product, and how high is the operating margin, it's not a money printer some people imagine semiconductor industry to be. Some people in the UAE government have an excellent realisation of that, some have very bad.

Utilities are highly subsidised across the gulf countries. Electricity, and water are not that costly, but nowhere the near the cheapest in comparison to other countries in the industry game.
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If something is highly subsidised then its very expensive is it not?

Subsidy is a long term big waste of tax payer money , likely QATAR Govt dont care as objective is to keep the plebs happy
 
Barnsley said:
If something is highly subsidised then its very expensive is it not?

Subsidy is a long term big waste of tax payer money , likely QATAR Govt dont care as objective is to keep the plebs happy
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Uhm TSMC is directly/Indirectly subsidized by the government it's not about subsides it's about subsidizing the right thing.
 
siliconbruh999 said:
Uhm TSMC is directly/Indirectly subsidized by the government it's not about subsides it's about subsidizing the right thing.
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What do they still need subsidy for?

I cant comment on Tawian Healthcare/Education/Infrastructure as I have never been , but would the money the Govt plowing into an extremely profitable business be any benefit?

I have no issue with some subsidy to get going , but why does TSMC need now?
 
Barnsley said:
What do they still need subsidy for?

I cant comment on Tawian Healthcare/Education/Infrastructure as I have never been , but would the money the Govt plowing into an extremely profitable business be any benefit?
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Same but they just got it last year
Barnsley said:
I have no issue with some subsidy to get going , but why does TSMC need now?
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Yeah IDK but what I know is US should learn a thing or two from them lol not tarrif them you should support yours instead of trying to force others.
 
siliconbruh999 said:
Same but they just got it last year
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Believe this one was a general tax break for semiconductor-related R&D (not TSMC exclusive, although they'll likely get an outsized benefit).

Barnsley said:
What do they still need subsidy for?

I cant comment on Tawian Healthcare/Education/Infrastructure as I have never been , but would the money the Govt plowing into an extremely profitable business be any benefit?

I have no issue with some subsidy to get going , but why does TSMC need now?
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Nowadays, Taiwanese government support for TSMC seems to primarily be in facilitating new fab sites and cutting down on red tape (e.g., environment reviews). Believe Morris Chang said in an interview that aside from initial startup capital, the government has not provided direct financial support.

You're correct though: Infrastructure, energy, education, technology, etc. are all areas the government actively invests in. After all, a rising tide lifts all boats (not just TSMC). It's also a large part of why Taiwan's "science parks" have been so successful.
 
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