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Intel and UMC Partner for 12-Nanometer Chip Production in Arizona by 2027

Collaboration Aims to Expand U.S. Manufacturing Capacity and Diversify Chip Technologies
Taiwan
u 2303.TW Blue Chip 150 Tech 350 Semicon 75
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Intel and United Microelectronics Corp. (UMC) of Taiwan have announced a strategic partnership to establish a 12-nanometer chip production facility in Arizona, USA, by 2027. This collaboration forms part of Intel’s broader initiative to expand its role in manufacturing chips for other companies.

The partnership will focus on developing 12-nanometer technology, which is particularly suited for chips used in Bluetooth, Wi-Fi, microcontrollers, sensors, and various connectivity applications. However, this technology is not intended for top-tier central processing units or graphics processors.

Intel aims to capitalize on its substantial U.S. manufacturing infrastructure and combine it with UMC’s extensive experience in mature chip production technologies. This synergy is expected to cater to a broad spectrum of chip developers.

UMC, based in Hsinchu, Taiwan, is the world’s third-largest contract chipmaker and a close competitor of Taiwan Semiconductor Manufacturing Co. (TSMC), the global leader in the foundry sector. TSMC is currently constructing a facility for 4-nm chip production in Arizona, set to commence operations by 2025.

Intel’s new partnership with UMC is designed to leverage existing equipment in several of its chip plants, thereby reducing initial investment requirements. Stuart Pann, Intel’s senior vice president and general manager of Intel Foundry Services, emphasized the collaboration’s role in enhancing service to global customers. He reiterated Intel’s ambition to become the world’s second-largest foundry by 2030.

This collaboration marks a significant shift for Intel, historically focused on advanced chipmaking for its own products. CEO Pat Gelsinger’s strategy to open production capacity to external customers reflects a diversification in the company’s client base. However, adapting to the diverse needs of chip developers has been a challenge for Intel, given its historically inward-focused culture.

UMC brings to the partnership its expertise in serving a wide range of customers, including major players like Qualcomm, MediaTek, Nvidia, Broadcom, NXP, and Infineon. The partnership, which follows Intel’s unsuccessful bid to acquire Tower Semiconductor, is expected to commence mass production in 2027.

Liu Chitung, UMC’s CFO, highlighted that the collaboration would enhance their production footprint in the U.S. and meet customer demands for U.S.-based 12-nanometer chip production. The financial details of the profit-sharing arrangement between the two companies are still being finalized.

UMC co-president Jason Wang expressed that the partnership would advance UMC’s technology and achieve cost-efficient capacity. Notably, UMC won’t need to invest in new chipmaking tools for this 12-nanometer technology, an improvement over their current 14-nm process.

UMC primarily operates in Asia, with facilities in Taiwan, China, Japan, Singapore, and a new $5 billion plant under construction in Singapore. This collaboration with Intel signifies a strategic expansion in their global production capabilities and a notable development in the semiconductor industry.

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