Taiwan’s second largest pure-play foundry, United Microelectronics Corp. (UMC), may be eyeing a return to more advanced process technology nodes with an expansion to its Intel Corp. partnership.
In a report from Nikkei, the company may also be mulling a return to more cutting-edge semiconductors by working with Intel to offset the massive capital expenditure costs. This includes potentially adding 6 nm semiconductors to its planned 12 nm collaboration in Intel’s Arizona fab farm.
UMC is potentially eyeing this strategic shift due to its potential for semiconductors in a range of applications, namely:
- Wi-Fi
- RF
- Bluetooth
- AI accelerators
- TV processors
- Automotive
According to the Nikkei report, UMC is looking to adopt an approach where it can rely on partners to share the financial burden of equipment and construction costs, rather than go it alone.
Advanced packaging push
This may also include renewed investment in advanced chip packaging business. This is an area where Intel has been heavily invested, and the companies’ partnership could play significant dividends.
Intel believes that its advanced packaging technology will set it apart from other foundries and offer an advantage other foundries may not have.
As the semiconductor industry moves into the heterogeneous era where the use of multiple chiplets in a package becomes the norm, Foveros and embedded multi-die interconnect bridge (EMIB) technologies offer a more efficient path toward 1 trillion transistors on a chip. This will also help extend Moore’s Law beyond 2030, Intel said.
UMC already has a 2.5D packaging capacity in Singapore and moved some of its packaging operations back to Tawain where it may be looking to purchase a current factory to be converted into advanced packaging areas.
Focus on mature process nodes
The shift to focus on more advanced process nodes would be a strategic shift for the company that for the past eight years has been focused on more mature nodes.
In 2017, UMC sought to prioritize solely on mature process nodes rather than competing at leading-edge technologies dominated by main rival Taiwan Semiconductor Manufacturing Co. (TSMC). This allowed the company to be more specialized and spend less capital investment in billion-dollar fabs.
UMC has concentrated on expanding its offerings for 14 nm and older process segments like an expansion of its 22/28 nm lines and other specialty nodes, aiming for profitability in these sectors.
According to a report from MoneyDJ, UMC’s capital expenditure in 2025 will drop to $1.8 billion, about a 37.9% decline from 2024. This could hinder any push to more advanced process nodes without the help of other vendors.
UMC-Intel relationship
Currently, Intel and UMC have a strategy foundry collaboration that focuses on 12 nm FinFET process technology. The deal expands Intel’s foundry prowess for mature process nodes with pilot production slated for 2026 and mass production in 2027.
The deal for UMC allows it to leverage FinFET capacity without having to invest large amounts of capital. But it also allows the pure-play foundry to:
- Carve a niche in mature process market
- Expand its global footprint
- Diversify geopolitical risks
