Taiwan's UMC raises 2026 capex, expands Singapore and Taiwan fabs for AI demand
Taiwanese chipmaker United Microelectronics Corp (UMC) said on Wednesday its board approved an expansion plan, including additional cleanroom capacity at its Singapore facility and a new fab building at its flagship Tainan campus in Taiwan, to meet growing AI-driven demand.
- "The plan will be executed in phases, enabling UMC to remain focused on capital discipline while flexibly deploying capacity to fulfil customer demand," said CEO Jason Wang in an earnings statement.
- "As a result, 2026 capital expenditure budget will be revised upward to US$2 billion."
- The company said on an online earnings conference call its board approved a capital expenditure budget of around $5 billion for 2026 and 2027.
- It also said it will expand cleanroom capacity at its Phase 4 facility in Singapore to support silicon photonics production, and construct a new fab building at its Tainan campus in southern Taiwan to house its future Phase 7 and Phase 8 facilities.
- Wang said on the call the expansion plan reflects the company's expectation of industry growth over the next five years. He said growth would be driven by connectivity and power products for AI data centers, as well as continued automotive electrification and emerging applications such as robotics.
- "This industry trend, combined with our entry into advanced packaging, such as logic and memory stacking, as well as silicon photonics, will accelerate growth within UMC's addressable market," Wang said on the call.
- The company expects AI-related revenue to reach about $300 million this year and exceed $1 billion within three years.
- UMC, or United Microelectronics Corp, focuses on more mature nodes, unlike Taiwan Semiconductor Manufacturing, the world's largest contract chipmaker, which is investing big in the most advanced 2 and 1 nanometre technology to power artificial intelligence applications.
- UMC reported second-quarter revenue of T$68.73 billion ($2.12 billion), up 17% from a year earlier, while net income was up 374.7% at T$42.26 billion.
- UMC's shares have risen 120% so far this year, outperforming a 38.24% gain in the broader market. The stock closed down 9.69% on Wednesday ahead of its earnings release.
(Reporting by Wen-Yee Lee, Editing by Louise Heavens and David Holmes)
