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Chip foundry UMC sees a 20 percent profit increase

65nm process node still proving profitable
Wed Feb 06 2013, 16:35

CHIP FOUNDRY UMC has posted a 20 percent increase in fourth quarter profits to $40m.

UMC, Taiwan's second largest chip foundry behind TSMC, has in recent years been put in the shade by its much bigger rival, nevertheless the firm continues to post impressive financial results. The firm has reported its fourth quarter results, showing a 6.8 percent increase in revenues to $898m while profits rose by 20 percent to $40m.

While TSMC gets most of its revenues from its mature 32nm process node, UMC is relying heavily on older processes, with 40 percent of its revenue coming from its process nodes in the 40nm to 65nm range. The firm said that over a third of its revenues still come from process nodes larger than 90nm.

Po-Wen Yen, UMC's recently appointed CEO said the firm will be investing in newer process nodes and talked up the company's collaboration with IBM on FinFET transistors, a superset of the technology used by Intel for its Tri-gate 3D transistors. Yen said, "As UMC's newly appointed CEO, my first priority is to enhance R&D for advanced processes. In order to realise maximum benefits from our R&D efforts, we will increase internal resources while [we] leverage outside collaboration so that we may effectively integrate R&D with manufacturing to ensure timely delivery of key projects."

Although UMC doesn't have the leading edge process nodes that TSMC, Globalfoundries and Samsung offer, there is still a lot of business to be won with cheap 65nm and 40nm process nodes. However Yen's comments suggest that the firm is realising that with TSMC seeing such high demand for its 28nm process node and rivals working on various 20nm class nodes, it cannot continue to rely on its mature process nodes alone to bring home the bacon in future years. µ


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