UMC: Structural problems in the semiconductor industry are difficult to solve in the short term

According to reports, SC Chien, the co-president of UMC, stated at the company’s shareholders meeting recently that the epidemic has impacted the global economy, but the Semiconductor market has grown substantially due to the acceleration of digital transformation driven by the epidemic, resulting in an overall shortage of semiconductor production capacity, with 8-inch and 12-inch fabs and mature process capacity shortage being the most serious.

SC Chien pointed out that the growth rate of market demand is much greater than the rate of increase in production capacity. This structural problem is difficult to solve in the short term, and the shortage of semiconductor production capacity may continue until 2023.

He said that from the perspective of demand, the high demand for 5G mobile phones, laptops and automotive electronics will continue not only this year, but may also continue beyond 2022.

SC Chien believes that the solution to the supply shortage is to increase production capacity. How ever, he said that even if manufacturers start to invest in new production lines now, they will not be able to release new production capacity until 2023. In addition, UMC predicts that this year’s average selling price will increase by about 10% compared to last year.

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