Taiwan’s No. 2 Chip Maker Teams Up With Car Parts Giant To Make Semiconductors In Japan

UMC, Taiwan’s No. 2 agreement chip maker soon after TSMC, is pairing up with Toyota-backed car-areas provider Denso to make semiconductors in Japan and satisfy expanding world demand in the automotive sector.

United Semiconductor Japan Co. (USJC), UMC’s Japanese subsidiary, introduced late very last thirty day period that it is setting up a production plant for electricity chips that regulate the flow and way of electric current with Denso, which is component-owned by the world’s greatest car or truck maker by income.

“Semiconductors are getting progressively critical in the automotive sector as mobility technologies evolve, like automatic driving and electrification,” Denso president Koji Arima said in the announcement. “Through this collaboration, we contribute to the stable offer of electricity semiconductors and electrification of automobiles.”

“It should be optimistic news,” states Brady Wang, Taipei-primarily based affiliate director with market place study agency Counterpoint Research. UMC is by now positioned to do “third-generation” semiconductors, including electricity-conserving varieties with the suitable thickness for automotive use. Wang expects high-volume production for the Japanese automobile sector. “Both of their advantages can be set into perform,” he says.

An insulated-gate bipolar transistor—also regarded as IGBT, which is used for electric automobile motor controllers—line will be put in at USJC’s wafer fab. It will be the very first in Japan to deliver IGBTs on 300mm wafers, in accordance to the announcement. Denso will lead its system-oriented IGBT machine and approach know-how, even though USJC will deliver its 300mm wafer producing capabilities.

Other chip makers, which include TSMC, can manufacture with IGBT technology, but Japanese businesses dominate considerably of the industry, notes Joanne Chiao, an analyst with Taiwan-dependent research company TrendForce.

The UMC-Denso plant, in Mie Prefecture in central Japan, is scheduled to get started in the 1st half of next year. A spokesperson for UMC mentioned the plant will be able to develop 10,000 wafers a month by 2025.

“With our sturdy portfolio of highly developed specialty systems and [International Automotive Task Force] IATF 16949 qualified fabs in diversified areas, UMC is properly positioned to serve demand across automobile apps, like highly developed driver support techniques, infotainment, connectivity, and powertrain,” Jason Wang, UMC co-president, explained in the announcement. “We appear ahead to capitalizing on additional cooperation prospects likely forward with prime gamers in the automotive house.”

Given that automotive production restarted around the planet in late 2020, immediately after the 1st wave of the pandemic, manufacturing unit demand for automotive chips has developed and stays robust mainly because of “pent-up consumer demand” for EVs and hybrids, Moody’s Traders Support mentioned in an emailed commentary.

The automotive semiconductor industry is estimated to grow from $35 billion in 2020 to $68 billion in 2026, Taipei-centered Market place Intelligence & Consulting Institute suggests.