Taiwan’s No. 2 chipmaker partners with auto parts giant to make semiconductors in Japan

UMC, the No. 2 chip maker in Taiwan after TSMC, is partnering with Toyota-backed auto parts supplier Denso to make semiconductors in Japan and to meet growing global automotive demand.

United Semiconductor Japan Co. (USJC), the Japanese subsidiary of UMC, announced late last month that it is building a production facility for power chips that control the flow and direction of electrical current with Denso, which is partially owned by the world’s largest automaker by sales.

“Semiconductors are becoming increasingly important in the automotive industry as mobility technologies evolve, including automated driving and electrification,” said Denso president Koji Arima in the announcement. “Through this partnership, we contribute to the stable supply of power semiconductors and the electrification of cars.”

“It should be positive news,” said Brady Wang, associate director in Taipei at market research firm Counterpoint Research. UMC is already positioned to make “third generation” semiconductors, including energy-saving grades of the appropriate thickness for use in the automotive industry. Wang expects large production for the Japanese car market. “Both benefits can be brought into play,” he says.

An insulated gate bipolar transistor – also known as IGBT, which is used for electric vehicle motor controllers – will be installed at USJC’s wafer plant. According to the announcement, it will be the first in Japan to produce IGBTs on 300mm wafers. Denso will contribute its systems-oriented IGBT device and process knowledge, while USJC will provide its 300mm wafer manufacturing capabilities.

Other chip makers, including TSMC, can manufacture using IGBT technology, but Japanese companies dominate much of the market, notes Joanne Chiao, an analyst at Taiwan-based research firm TrendForce.

The UMC-Denso plant, in Mie prefecture in central Japan, is expected to start operating in the first half of next year. A UMC spokesperson said the factory could produce 10,000 wafers per month by 2025.

“With our robust portfolio of advanced specialty technologies and [International Automotive Task Force] IATF 16949 certified factories in various locations, UMC is well placed to meet demand in automotive applications, including advanced driver assistance systems, infotainment, connectivity and powertrain,” said Jason Wang, co-chair of UMC, in the announcement. “We look forward to taking advantage of more collaboration opportunities with top automotive players in the future.”

Since the restart of auto production around the world in late 2020, following the first wave of the pandemic, factory demand for auto chips has grown and remains strong due to “pent-up consumer demand” for EVs and hybrids, Moody’s Investors said. Service in an email. commentary.

According to the Taipei-based Market Intelligence & Consulting Institute, the automotive semiconductor market is expected to grow from $35 billion in 2020 to $68 billion in 2026.

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