TAIPEI — United Microelectronics Corp. (UMC) said it will pare its capital expenditures for this year to $1.1 billion as the company expects no significant increase in sales this year.
Taiwan’s second-largest foundry will cut its capex by about a quarter from the $1.4 billion it spent in 2017. The company during most of 2017 was targeting a capex of $1.7 billion after spending $2 billion in 2016.
The spending cuts come as the company’s sales of 28nm products flounder amid strong competition. UMC’s most advanced 14nm process technology, which the company launched in the second quarter last year, accounted for 2 percent of its overall sales during the fourth quarter of 2017.
"Our 2018 revenue is not going to grow significantly," said UMC Co-President Jason Wang at an event to announce the company’s fourth-quarter 2017 results. The company is going through a restructuring transition that may take as many as two years, he said.
UMC expects the overall foundry segment to grow in the high-single digits this year, a forecast that’s in line with that of its larger competitor, Taiwan Semiconductor Manufacturing Co. (TSMC).
Jason Wang
TSMC believes it will continue to lead chip industry growth in 2018 with the company’s annual revenue gaining by as much as 15 percent from 2017. The overall growth rate for the foundry segment this year will be about 10 percent while the semiconductor industry will grow by as much as 8 percent, according to TSMC.
UMC will increase expenditures on its 200mm fabs to about a third of capex, compared with about 9 percent last year. The boosted investment in the company’s 200mm facilities is aimed at upgrading existing capacity and strengthening average sales prices.
Demand for chips made on eight-inch wafers has been “very robust,” according to Wang, particularly for mobile products, RF switches, microcontrollers and display drivers.
Wang also said UMC will ramp up 14nm production, without providing a timeframe.
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