UMC cuts 2018 capex spending as foundry sees no significant sales increase

UMC isn't as well-known as TSMC or Globalfoundries, but it's still Taiwan's second-largest foundry. In a new statement, UMC said it will cut its 2018 capital expenditure to $1.1 billion, down from $1.4 billion in 2017. The 2017 capex spending was below the firm's $1.7 billion target, and a drop from the $2.0 billion it invested in 2016.

The reason for UMC's dropping capex is that the company expects no significant revenue growth. The foundry is experiencing fierce competition on the 28nm node, and isn't seeing a lot of appetite for its 14nm process:

The spending cuts come as the company’s sales of 28nm products flounder amid strong competition. UMC’s most advanced 14nm process technology, which the company launched in the second quarter last year, accounted for 2 percent of its overall sales during the fourth quarter of 2017.

"Our 2018 revenue is not going to grow significantly," said UMC Co-President Jason Wang at an event to announce the company’s fourth-quarter 2017 results. The company is going through a restructuring transition that may take as many as two years, he said.

Among other things, UMC hopes to recover its 28nm business by expanding sales of HPC and HPC+ versions later this year. More details can be read at EE Times.