Persisting robust demand for 8-inch wafer foundry services have prompted foundry houses to expand their capacities in this segment in various ways, including the latest move by Vanguard International Semiconductor (VIS) to acquire a fab from Globalfoundries (GF).

VIS announced on January 31 that it will acquire GF's Fab 3E 8-inch wafer foundry fab in Tampines, Singapore for US$236 million, with the settlement date set at December 31, 2019 for ownership transfers of the plant, facilities, machinery equipment and MEMS intellectual property rights and businesses.

VIS has been seeking overseas acquisitions of 8-inch and 12-inch fabs these two years mainly to meet requests from major IDM clients including Infinenon to provide long-term capacity support, according to industry sources.

Demand for 8-inch foundry has kept expanding along with ever-growing niche applications of power management chips, LCD driver ICs, finerprint recognition chips and MOSFET chips, the sources indicated, adding that the supply of both 8-inch and 6-inch foundry capacity will remain strong through 2020 as they can provide the most cost-effective production of niche chips.

GlobalWafers revealed earlier that market demand for 8-inch wafers has been surging significantly from sectors of imaging sensors, electrical vehicles and discrete power components, with its 8-inch wafer production lines worldwide running at full capacities.

To cash in on the robust demand, TSMC announced in a supply chain forum held in December 2018 that it will set up a new 8-inch plant in Southern Taiwan Science Park (STSP), marking the first 8-inch plant the foundry giant will build in 15 years. TSMC last built its 8-inch fab in Shanghai, China. The new fab is estimated to cost NT$40 billion (US$1.30 billion).

Meanwhile, United Microelectronics (UMC) also announced in December NT$27.40 billion investment plans, including expanding monthly capacity of its HeJian Technology (Suzhou) in China by 10,000 wafers and streamlining its production process at 8-inch facilities in Taiwan.

UMC's overall capacity utilization declined to 88% in the fourth quarter 2018 from 94% in the third quarter, due mainly to 12-inch foundry utilization reaching only 74-76% despite full utilization of 8-inch foundry fabs driven by strong foundry demand for MCUs, power management ICs and IoT chips.

By: DocMemory
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