Guan Cha Zhe Wang·2025-07-02 10:39Core Viewpoint - United Microelectronics Corporation (UMC) is exploring the feasibility of entering advanced chip production, specifically targeting 6nm technology, to enhance its growth potential in a market dominated by TSMC, Samsung, and Intel [1][2]. Group 1: Company Strategy and Developments - UMC is assessing future growth drivers, including the potential production of 6nm chips suitable for advanced connectivity applications and AI accelerators [1]. - The company is considering expanding its collaboration with Intel in 12nm chip production, potentially incorporating 6nm technology into this partnership [1][2]. - UMC's CFO indicated that substantial progress in advanced manufacturing technology will depend on partnerships to alleviate financial burdens [2]. Group 2: Market Position and Competition - UMC is currently the fourth largest chip foundry globally, with a market share of 4.7%, following TSMC, Samsung, and SMIC [3][4]. - As of Q1 2025, UMC's revenue decreased by 5.8%, reflecting competitive pressures from local Chinese manufacturers and the rise of SMIC, which has overtaken UMC to become the third largest foundry [2][3]. - The global foundry market is highly concentrated, with the top five companies accounting for 90.2% of the market share [3]. Group 3: Financial Considerations and Challenges - Entering the 6nm production space may require significant capital investment, estimated at around $5 billion, which poses a challenge for UMC [7]. - UMC's capital expenditure for the current year is projected to be $1.8 billion, significantly lower than SMIC's ongoing expenditure of over $7 billion [7]. - The company is exploring a "light asset" model to share the financial burden of new technology investments with partners [7]. Group 4: Industry Trends and Future Outlook - By 2030, mainland China is expected to lead global semiconductor foundry capacity, potentially holding 30% of the market, which adds competitive pressure on UMC [5]. - The demand for mature semiconductor products is rebounding slower than expected, prompting UMC to seek new growth opportunities [7]. - The transition to advanced chip production is complicated by the need for cutting-edge equipment, such as EUV lithography machines, which are costly and may impact production quality if older technologies are used [8].