UMC's 28nm process wafer price soars to $2,300 per piece next year

Industry insiders revealed that UMC will raise foundry prices again on July 1, with the price of each 28nm process wafer being around $1,800, up nearly 13% from $1,600 in the second quarter. In addition, industry insiders said that UMC will raise prices again in the first quarter of next year, when the price of 28nm process wafers will soar to $2,300 per piece, up nearly 28% from $1,800.

In mid-to-late April, there were reports that UMC was negotiating contracts for next year. The company will again increase the price of wafer foundry, with the increase starting at at least 10% to 20%. In particular, orders for 28nm and 40nm processes will increase by at least 40%. In addition, UMC's 2022 price increase will also apply to orders from UMC's IC design companies.

However, UMC declined to comment on reports about its pricing.

The current market situation is "whoever has wafer production capacity wins the world". Industry insiders said that in order to meet strong demand, MediaTek has been actively striving for UMC's production capacity and pointed out that it has fully accepted UMC's price increase notice. However, this move has brought heavy cost pressure to UMC's many 28nm customers. If they want production capacity, such as Novatek, Himax and Realtek, they cannot offer a price lower than MediaTek, or even higher to have a chance.

Digitimes reported that although TSMC, UMC, TSMC, Powerchip, SMIC, GlobalFoundries and other wafer foundries have expanded production to meet strong demand, judging from their planning schedules, the tight chip supply situation will not be alleviated until 2023 at the earliest.