United Microelectronics Stock

United Microelectronics Corporation (UMC) operates as an independent semiconductor foundry and a leader in semiconductor manufacturing process technologies worldwide.

The company’s primary business is the manufacture, or ‘fabrication’, of semiconductors, sometimes called ‘chips’ or ‘integrated circuits’, for others. Using the company’s own proprietary processes and techniques, it makes chips to the design specifications of its many customers.

The company maintains a diversified customer base across industries, including communication devices, consumer electronics, computer, and others, while continuing to focus on manufacturing for high growth, large volume applications, including networking, telecommunications, internet, multimedia, PCs and graphics. The company sells and markets mainly wafers which in turn are used in a number of different applications by its customers.

The company focuses on the development of leading manufacturing process technologies designed for mass production. The company also provides its customers with real-time online access to production data and specifications, resulting in superior communication and efficiency.

The company’s technology and service have attracted two principal types of foundry industry customers: fabless design companies and integrated device manufacturers.

In April 2022, DENSO Corporation, or DENSO, a leading mobility supplier, and United Semiconductor Japan Corporation (USJC) announced that the companies have agreed to collaborate on the production of power semiconductors at USJC’s 300mm fab in order to serve the growing demand in the automotive market. An insulated gate bipolar transistor (IGBT) line will be installed at USJC’s wafer fab, which will be the first such facility in Japan to produce IGBTs on 300mm wafers. DENSO will contribute its system-oriented IGBT device and process technologies while USJC will provide its 300mm wafer manufacturing capabilities to bring the 300mm IGBT process into mass production.

The company partnered with Avalanche for joint development and production of Magnetic Random Access Memory (MRAM) to replace embedded flash in 2018 for 22nm technologies.

Strategy

To maintain and enhance its position as a market leader, the company has adopted a business strategy with a focus on a partnership business model designed to accommodate its customers’ business needs and objectives and to promote their interests as its partners.

The key elements of the company’s strategy are to operate as a customer-driven foundry; build up customer-focused partnership business model; continue to focus on high growth applications and customers and actively explore new market opportunities; maintain its leading position in mass-producible semiconductor technology and selectively pursue strategic investments in new technologies; and maintain scale and capacity capabilities to meet customer requirements, with a focus on 12-inch wafer facilities for future expansion.

Services and Products

The company engages in wafer fabrication for foundry customers. To optimize fabrication services for its customers, the company works closely with them as they finalize circuit design and contract for the preparation of masks to be used in the manufacturing process. The company also offers its customers turnkey solutions by providing subcontracted assembly and test services.

The services the company offers to its customers in each of these five steps are described below:

Circuit Design: At this initial design stage, the company’s engineers generally work with its customers to ensure that their designs can be successfully manufactured in its facilities. The company has assisted an increasing number of its customers in the design process by providing them with access to its partners’ electronic design analysis tools, IP and design services, as well as by providing them with custom embedded memory macro-cells. In its Silicon Shuttle program, the company offers customers and IP providers early access to actual silicon samples with their desired IP and content in order to enable early and rapid use of its advanced technologies. The Silicon Shuttle program is a multi-chip test wafer program that allows silicon verification of IP and design elements. In the Silicon Shuttle program, several different vendors can test their IP using a single mask set. In its alliances with them, the company coordinates with leading suppliers of IP, design and Application Specific Integrated Circuit (ASIC) services to ensure their offerings are available to its customers in an integrated, easy to use manner which matches customers’ need to its technologies. With a view to lowering customer design barriers, the company expanded its design support functions from conventional design support to adding IP development to complement third-party intellectual properties and to provide customers with the widest range of silicon-verified choices. The company’s offerings range from design libraries to basic analog mixed-mode intellectual properties which, together, have helped shorten its customer’s design cycle time.

Mask Tooling: The company’s engineers generally assist its customers to design and/or obtain masks that are optimized for its advanced process technologies and equipment. Actual mask production is usually provided by independent third parties specializing in mask tooling.

Wafer Fabrication: The company’s manufacturing service provides all aspects of the wafer fabrication process by utilizing a full range of advanced process technologies. During the wafer fabrication process, the company performs procedures in which a photosensitive material is deposited on the wafer and exposed to light through the mask to form transistors and other circuit elements comprising of a semiconductor. The unwanted material is then etched away, leaving only the desired circuit pattern on the wafer. As part of its wafer fabrication services, the company also offers wafer probing services, which test, or probe, individual die on the processed wafers and identify dice that fail to meet required standards. The company prefers to conduct wafer probing internally to obtain speedier and more accurate data on manufacturing yield rates.

Assembly and Testing: The company offers its customers turnkey solutions by providing the option to purchase finished semiconductor products that have been assembled and tested. The company outsources assembly and test services to leading assembly and test service providers, including Siliconware Precision Industries Co., Ltd., or Siliconware, and Advanced Semiconductor Engineering Inc. in Taiwan. After final testing, the semiconductors are shipped to the company’s customers’ designated locations.

Customers and Markets

The company’s primary customers include premier integrated device manufacturers, such as Texas Instruments and Intel Mobile, plus leading fabless design companies, such as MediaTek, Realtek, Qualcomm and Novatek Microelectronics Corp., Ltd. (Novatek).

The company offers an online service, MyUMC, which gives its customers easy access to its foundry services by providing a total online supply chain solution. MyUMC offers 24-hour access to detailed account information, such as manufacturing, engineering and design support documents through each customer’s own customized start page.

The company also has system-to-system connecting services to provide direct data exchange between its system and its customers’ systems. These services, which include the company’s UMC Design View Room Cloud Service, facilitate its design collaborations with its customers to help reduce the time to market.

The company’s main sales office is located in Taiwan, which is in charge of its sales activities in Asia. United Microelectronics (Europe) BV, the company’s wholly-owned subsidiary based in Amsterdam, assists its sales to customers in Europe. Its sales in North America are made through UMC Group (USA), the company’s subsidiary located in Silicon Valley. The company also has sales offices in China, Japan and Korea to support its customers in those regions.

Suppliers

The most important raw material used in the company’s production processes is silicon wafer, which is the basic raw material from which integrated circuits are made. The principal makers for the company’s wafers are Shin-Etsu (Shin-Etsu Handotai Taiwan Co., Ltd.), GlobalWafers, Siltronic, Sumco Group (including Sumco Corporation and Formosa Sumco Technology Corporation) Group and Soitec.

Competition

The company competes with dedicated foundry service providers, such as Taiwan Semiconductor Manufacturing Company Limited, Semiconductor Manufacturing International (Shanghai) Corporation, and Globalfoundries Inc., as well as the foundry operation services of some integrated device manufacturers, such as Intel, Samsung Electronics, SK Hynix, and Toshiba Corporation. Other competitors are Dongbu Anam Semiconductor, Hua Hong Semiconductor Manufacturing Corp., X-FAB Semiconductors Foundries AG, Silterra Malaysia Sdn. Bhd., Powerchip, TowerJazz, Vanguard and XMC.

Intellectual Property

As of December 31, 2022, the company held 6,700 U.S. issued patents and 8,071 patents issued outside of the United States.

The company has entered into various patent cross-licenses with major technology companies, including a number of leading international semiconductor companies, such as IBM (International Business Machines Corporation) and AVAGO (Avago Technologies International Sales Pte. Limited).

Research and Development

In 2022, the company spent NT$12,953 million (U.S.$421 million) on research and development.

History

United Microelectronics Corporation was founded in 1980. The company was incorporated under the Republic of China Company Law as a company limited by shares in 1980.