Global chip shortage to last until 2023: UMC

07/07/2021 05:51 PM
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Photo courtesy of UMC
Photo courtesy of UMC

Taipei, July 7 (CNA) The global semiconductor shortage is expected to last until 2023 as the COVID-19 pandemic boosts demand for chips in the production of modern automobiles and smart home devices, said Chien Shan-chieh (簡山傑), co-president of Taiwan-based semiconductor foundry United Microelectronics Corp. (UMC), on Wednesday.

Addressing a shareholders' meeting, Chien said that while the COVID-19 pandemic has had an adverse impact on the global economy, the semiconductor industry's digital transformation driven by the pandemic has accelerated market growth.

Chien said he expects the problem of chip supply falling short of demand to worsen in the short term, with the shortage of 8-inch and 12-inch wafers set to be the most severe.

As demand soars alongside limited production capacity, the global chip shortage is likely to last beyond 2022 until 2023, he added.

To solve the problem, the key is to increase capacity, Chien noted, but added that even with chip makers investing in semiconductor fabs to expand chip fabrication capacity, more chips can only be churned out around 2023.

Chien also said that in 2020, UMC's revenue grew 26 percent in U.S. dollar terms, while its operating income surged to NT$22.01 billion (US$785.67 million), reflecting solid utilization rates across both 8-inch and 12-inch facilities and optimization of the company's blended product mix.

Of particular note has been the company's enhanced 12-inch product mix, which is primarily a result of the substantial pick-up in 28nm wafer business as well as the successful integration of 12-inch operations at its Japanese subsidiary USJC, according to Chien.

Meanwhile, UMC, the world's second largest contract chipmaker, said Wednesday that it has approved a plan to issue a NT$1.6 cash dividend per share for its earnings last year.

The company reported consolidated revenue of NT$176.82 billion for 2020, up 19.3 percent from a year earlier. It also posted NT$2.42 in earnings per share (EPS).

(By Jackson Chang and Evelyn Kao)

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