Internet of Things chips currently rely largely on eight inch wafer fabs for fabrication, and Digitimes claims that such fabs are running at full capacity through the end of 2018, with the capacity supply likely to fall short of demand by 2020.
Global tech giants and telecom operators are joining IoT application markets, and governments in many countries are injecting substantial resources into IoT infrastructure construction, showing explosive demand for IoT-related chipset solutions. This has enabled 8-inch wafer fabs operated by TSMC, VIS, UMC, SMIC and Hua Hong Semiconductor to post sharp revenue and earnings growths.
Digitimes thinks UMC is in a better position to stand out in 8-inch wafer foundry business as it has fully depreciated the related equipment and can readily make profits for many years after landing orders. They indicated that UMC has a chance to see its market value expand 10-fold in three years.