AIBRIEF
United Microelectronics, a Taiwan contract chipmaker, raised its full year factory budget by a third, funding Singapore expansion with light based silicon chip tools and a new Tainan chip factory shell.
UMC raised its 2026 chip-factory spending to $2 billion from $1.5 billion, funding a Singapore Phase 4 cleanroom expansion with silicon-photonics tools and a new Tainan fab shell to support future Phase 7/8 and advanced packaging capacity.
The Taiwan contract chipmaker (United Microelectronics) made the move alongside a stronger-than-expected Q2. Revenue reached NT$68.73 billion (US$2.18 billion), up 17% year over year and ahead of the US$2.06 billion consensus. EPS came in at US$0.54 per ADS against a US$0.15 estimate, with gross margin at 32.5% (up from 28.7% a year ago) and capacity utilization at 85%.
Mature 22nm and 28nm nodes are doing the lifting: they rose to 37% of wafer revenue from 34% in Q1, while older 40nm shrank to 15% from 18%. The 8-inch business is also recovering on stronger power-management, sensor, and microcontroller demand.
The capex plan is anchored by a manufacturing milestone: CEO Jason Wang said UMC delivered its first mass-produced 12-inch photonic integrated circuits in the quarter, with a broader silicon-photonics platform launch planned for 2027. Chairman Stan Hung tied the demand to "generative AI" lifting the need for higher performance, greater bandwidth, and stronger system integration, and called the phased approach a matter of "capital discipline."
For Q3, UMC guided wafer shipments up a high-single-digit percentage sequentially, with US-dollar ASPs stable, gross margin in the mid-30% range, and utilization above 90%. Whether the new 12-inch photonic-IC line scales into a full 2027 platform, and how 40nm continues to fade, are the next things to watch.