One core is hard to get! Samsung will buy equipment for the factory to meet the urgent needs of the mature process.

According to media reports, Samsung will aggressively assist UMC in expanding its production capacity of image sensors and panel driver chips, with the purchase of 400 additional machines, including etching, thin film, yellow light, diffusion and other devices, according to media reports.

This batch of equipment will be placed in the UMC Nanke P6 plant, which will start construction in this quarter and mass production in 2023, with an estimated monthly production capacity of 27000 pieces, mainly producing CIS chips, as well as OLED/LED panel driver IC, will initially produce 28nm process products, the future does not rule out upgrading to 22nm, all products will be provided to Samsung.

In response to this news, UMC admitted on the 12th that Nanke P6 plant will have a new mode of operation, as for the object of cooperation and investment details are still under negotiation, it is not convenient to disclose.

This is the first time Samsung has sought cooperation with a fab foundry in Taiwan. The supply chain revealed that Samsung began to evaluate the lack of production capacity in its own mature process last year, which is difficult to solve in the short term, so it intends to promote a plan to find a long-term production capacity partner, and finally selected UMC.

At present, Samsung is the world's second largest supplier of CIS chips, with a market share of more than 20%, second only to Sony.

As most of the CIS products are mainly produced in 8-inch fabs, and most 8-inch manufacturers generally reflect the shortage of production capacity, this has added a lot of obstacles for Samsung to compete for Sony CIS "dragon chair".

From the point of view of supply and demand, CIS chips have been in short supply since the fourth quarter of last year, and this quarter is the news of out-of-stock price increases. On the other hand, benefiting from strong terminal demand such as ToF Sensor for mobile phones, industrial automation and automotive cameras, the market for CIS chips has a broad prospect. Guangfa Securities predicts that if you only look at the automotive CIS industry, its market space will be US $1.3 billion in 2019 and is expected to reach US $54-6.3 billion in the future.

Prior to this, Samsung has begun to move the production line, its 11th DRAM chip production line in Huacheng, South Korea has been converted into CMOS image sensor (CIS) production line, and entered the stage of mass production.

People in the industry believe that the cost of the equipment will exceed the capital expenditure of UMC this year (about $1.5 billion). Samsung is so "arrogant" in order to counter the alliance between Sony, the leader of image sensors, and TSMC. Sony formally signed a contract with TSMC last year, entrusting for the first time TSMC to manufacture key parts of CIS chips that had hardly been faked in the past.

In addition, after the outbreak of COVID-19, the IC drivers for notebook laptops, televisions, home appliances, car entertainment systems and game consoles are all in short supply, while the driver IC is mostly manufactured by mature processes above 16nm. Among them, the panel driver IC has become the product with the most serious capacity squeezed out in this wave of semiconductor wafers. In order to ensure the source of the chips, Samsung will help UMC to expand its P6 production, which will enable UMC to expand its operation scale. Without worrying about the order at the same time.