Chip shortage to last until 2023, UMC president says

The global semiconductor shortage is expected to last until 2023 as the COVID-19 pandemic boosts demand for chips for automobiles and smart home devices, United Microelectronics Corp (UMC, 聯電) copresident Chien Shan-chieh (簡山傑) said yesterday.

Speaking at the company’s annual general meeting in Hsinchu, Chien said that while the COVID-19 pandemic has had an adverse impact on the global economy, digital transformation has accelerated growth in the semiconductor industry.

Chip supply would fall short of demand and only worsen in the short term, with a shortage of 8-inch and 12-inch wafers set to be the most severe, Chien said.

As demand continues to soar, the global chip shortage is likely to last beyond next year until 2023, he said.

To solve the problem, the key is to increase capacity, Chien said, but added that even with chipmakers investing in fabs to expand capacity, it would take until 2023 for more chips to be produced.

UMC’s revenue grew 26 percent in US dollar terms last year, while its operating income surged to NT$22.01 billion (US$786.27 million), reflecting solid utilization rates across both 8-inch and 12-inch facilities, and optimization of the company’s blended product mix, he said.

Of particular note has been the company’s enhanced 12-inch product mix, which is primarily a result of the substantial pickup in the 28-nanometer wafer business, as well as the successful integration of 12-inch operations at its Japanese subsidiary United Semiconductor Japan Co, he added.

Shareholders of UMC, the world’s third-largest contract chipmaker, yesterday during the online meeting approved a plan to distribute a NT$1.6 cash dividend.

The company last year posted consolidated revenue of NT$176.82 billion, or earnings per share of NT$2.42, up 19.3 percent year-on-year.