Taiwanese semiconductor manufacturer UMC has approved an additional $3.2 billion for manufacturing expansion as demand for its established chipmaking technologies continues to strengthen.
The company’s board authorised the spending on 28 October, although UMC has not announced a timetable for completing the additional capacity.
UMC expects a significant change in semiconductor pricing during 2027, forecasting a 10 per cent increase in its blended average selling prices.
That projection is particularly interesting because the company concentrates on established manufacturing processes, unlike TSMC, which dominates production of the most advanced processors.
UMC’s customers use its manufacturing capacity for products that don’t require the latest, most expensive transistor technologies.
These include connectivity, communications, power management, and other specialist chips used throughout electronic systems. The company expects demand for selected technologies to strengthen sufficiently to support both higher prices and additional manufacturing investment.
UMC has been working with equipment suppliers to accelerate its expansion plans, although the availability and delivery of manufacturing machinery could influence the final schedule.
The chipmaker believes AI-related applications will account for about 25 per cent of its revenue within three years, showing the spending boom is spreading beyond advanced processors.
AI servers require large quantities of supporting semiconductor components, many of which can be manufactured using older and less expensive processes. UMC identified silicon photonics and advanced packaging as important opportunities, suggesting that it intends to participate more directly in the infrastructure supporting large computing installations.
The company reported third-quarter revenue of about $2.29 billion, up 25.6 per cent from the same period last year. Net income rose 9.7 per cent to about $507 million, though profit growth lagged far behind the increase in sales.
UMC said the personal computer segment was weakening, suggesting demand for conventional consumer hardware is on a different trajectory than the expanding AI infrastructure market. The company’s shares have climbed sharply during 2026 as investors increasingly recognise the value of manufacturing capacity outside the industry’s most advanced processes. With customers preparing for higher prices next year, the latest spending decision suggests that established chipmaking technologies could become considerably more profitable.
