UMC, world's third largest chip foundry, announced it's slowing down the ramp of its 28nm process as demand is looking weak. The firm said the chip industry is working its way out of an inventory correction and believes demand will likely remain depressed until the first half of 2016.
Revenue attributed the 28nm node is expected to drop to around 10 percent during the second half of this year after peaking at 11 percent in the second quarter. UMC expects 28nm revenue will rebound to about 15 percent of its total revenue by Q2 2016.
UMC has been aiming since the middle of last year to gain a foothold in 28nm that larger rival Taiwan Semiconductor Manufacturing Co. (TSMC) has dominated for nearly five years.
“Weakness in overall demand, partly due to the uncertainties in economic outlook, will prolong the inventory adjustment through the second half of 2015,” UMC CEO Po Wen Yen said in a conference call with analysts to announce the company’s second-quarter results. “28nm will take a few quarters to regain momentum.”