UMC's 8-inch factory is so busy receiving orders that its hands are cramped, but mining chips are still on the rise

UMC stated at a shareholders meeting on the 12th that its 8-inch factory is fully loaded with orders, and due to the significant increase in silicon wafer prices, which has led to increased costs, the company has raised its 8-inch foundry prices since June, and will gradually pass on the increased costs to customers. It also plans to increase the production capacity of its own and shipyards, which is expected to be opened as early as the end of this year.

The price of silicon wafers continues to rise, resulting in increased costs. UMC has gradually passed on the increased costs to customers. UMC said that the production capacity of its 8-inch plants has been fully loaded since the beginning of this year, and there was no price increase in the first half of the year. However, as the price of 8-inch silicon wafers increases quarter by quarter, UMC will gradually increase the price of 8-inch wafer foundry. At the same time, UMC will also expand the monthly production capacity of Suzhou Hejian by about 10,000 8-inch wafers, and mass production will be possible as early as the end of this year.

Liu Qidong, CFO of UMC, pointed out that the market conditions in the second quarter were in line with expectations, and the depreciation of the New Taiwan dollar exchange rate should be beneficial to operating performance. Currently, UMC's 8-inch fab and mature process are fully loaded with orders, and the company has internally planned to increase the monthly production capacity of the fab by 10,000 pieces. The new capacity is expected to be put into operation from the end of this year to the beginning of next year.

Liu Qidong also said that the overall environment this year is good, and the global foundry industry is expected to grow by double-digit percentage points. UMC's operating outlook this year is optimistic, but the company is internally profit-oriented and will strengthen cash flow. It is expected that the revenue growth rate this year will be lower than the industry average.

In addition, although UMC has not caught up with other foundries in advanced processes, it has completed the research and development of 14nm and put it into mass production. It is reported that UMC's 14nm production line has entered the mining market and accepted orders for cryptocurrency mining ASIC chips, and the orders were fully loaded until the third quarter. UMC's 14nm process currently has a monthly production capacity of about 3,000 pieces. Driven by strong mining demand, it will remain fully loaded in the third quarter.

Regarding the operating status of Xiamen Unigroup, a subsidiary of UMC, UMC stated that the 12-inch Xiamen Unigroup factory, a joint venture with the Xiamen Municipal Government, has been in mass production at the end of last year. As it is still in the early layout stage, it will continue to expand production and strive to increase revenue scale. It is expected that it will not be able to break even this year.

Liu Qidong pointed out that Unigroup entered mass production at the end of last year and currently has a monthly production capacity of 17,000 pieces. It is expected to reach the first-phase goal of 25,000 pieces by the end of the year. Although it is still unable to break even this year, it is expected to make progress in revenue, customer level improvement, and technology development, and will continue to develop new technologies.

Liu Qidong also said that the wafer foundry field in which Unigroup is located is a capital-intensive industry with expensive equipment costs, so in the short term it will still focus on expanding turnover in order to have a chance to offset cost expenditures.