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© UMC Analysis | February 24, 2022

UMC's Hejian subsidiary resumes production

On February 14, UMC suspended production at its 8-inch wafer fab subsidiary, HeJian Technology, located in Suzhou, China due to a suspected case of a COVID-19 infection, as previously reported by Evertiq.

As reported by TrendForce, the suspension of production did not mean a complete halt, but rather a phased shutdown and temporary suspension.

The plant is an 8-inch fab and its production capacity accounts for approximately 25% of UMC's total 8-inch capacity and approximately 3% of global 8-inch capacity.

Since this incident was not an unforeseen accident, utilisation rate during the phased shutdown was maintained at roughly 25~30% and wafers on the production line did not need to be scrapped, according to TrendForce.

In an update, UMC says that it resumed production at the HeJian fab immediately after obtaining approval from the authorities today on February 24.

However, since recalibrating semiconductor equipment isn’t something that can be done in a day – it usually takes about five to seven days – full recovery of overall utilisation rate isn’t expected to be achieved until early March. Due to this, TrendForce estimates a wafer input loss of 14~20 days, affecting approximately 4~5% of the company's 8-inch production capacity this quarter – or approximately 0.4~0.5% of global 8-inch production capacity, a manageable situation overall.

UMC HJTC Fab 8N contains 0.5μm~0.11μm node production lines and is a full eight-inch fab. The actual proportion of customer products on the production line at the time of the incident is as follows: HJTC’s largest client Silergy accounted for 40% of the production line for PMICs, with most end applications being consumer and industrial products such as IP cams, air conditioners, and refrigerators. SinoWealth and Novatek each accounted for 13% of the production line with products such as MCUs and large size DDIs. Other PMIC clients include Mediatek and GMT who accounted for approximately 35% of the plant's production capacity.

Since most customer products allocated to this fab are simultaneously produced at the UMC fab in Taiwan or at other fabs and end-user products including smartphones, TVs, and laptops are all currently in the off-season, restocking momentum is weak.

TrendForce believes that although the shutdown was longer than expected, since no wafers were scrapped on the production line and the cycle time of some PMICs is short, wafer input losses have an opportunity to be mitigated through expedited order production and have limited impact on shipments. In terms of revenue, due to the relatively low selling price of 8-inch wafers, the impact of this incident on UMC’s annual revenue performance falls within a 0.3% range.

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October 05 2022 12:09 pm V20.8.44-1
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