July 30, 2026 / SemiMedia / — United Microelectronics Corporation has raised its 2026 capital expenditure budget from $1.5 billion to $2 billion and approved phased capacity expansions in Singapore and Tainan, Taiwan.

The foundry expects third-quarter wafer shipments to increase by a high-single-digit percentage from the second quarter. Capacity utilization is projected to exceed 90%, while U.S. dollar-denominated average selling prices are expected to remain firm.

UMC forecast its third-quarter gross margin in the mid-30% range. The company said it will continue maintaining pricing and margin discipline as demand and factory utilization improve.

Stronger demand for power-management ICs, sensors and microcontrollers is supporting a recovery in UMC’s 8-inch product portfolio. The company expects 8-inch utilization to improve significantly during the third quarter, while 12-inch capacity remains at a healthy loading level.

UMC’s second-quarter wafer shipments increased 10.6% sequentially, lifting overall utilization to 85% from 79% in the previous quarter.

Quarterly revenue reached NT$68.73 billion, increasing 12.6% sequentially and 17% from a year earlier. Gross margin was 32.5%.

Revenue from 22nm and 28nm technologies accounted for 37% of wafer sales, with 22nm alone representing 17.5% of quarterly revenue. Technologies at 40nm and below contributed a combined 52% of wafer revenue.

CEO Jason Wang said AI demand is expanding beyond computing processors into connectivity, power-management, memory-interconnect and high-bandwidth communication products. UMC expects AI-related revenue to approach $300 million in 2026 and exceed $1 billion within three years.

Under the expansion plan, UMC will install cleanroom capacity and purchase manufacturing equipment for its Phase 4 facility in Singapore. The building shell has already been completed, allowing equipment and capacity to be added in phases as customer demand increases.

The P4 investment will expand UMC’s silicon-photonics manufacturing capacity and strengthen Singapore’s role as the company’s largest production base outside Taiwan. The additional capacity will also increase geographic diversity across UMC’s manufacturing network.

UMC will simultaneously begin construction of a new fab building at its Tainan Science Park campus. The structure will provide the foundation for future Phase 7 and Phase 8 facilities and support new technologies, advanced packaging and customers’ long-term product roadmaps.

Chairman Stan Hung said the phased approach is intended to balance deployment speed, manufacturing flexibility and capital discipline. Constructing the required infrastructure in advance can shorten future capacity lead times without immediately installing all production equipment.

In addition to increasing its annual capex budget, UMC’s board approved approximately $5 billion in capital expenditure for 2026 and 2027. Spending will be deployed according to secured projects, customer commitments and market demand.

UMC has also delivered its first mass-produced 12-inch photonic ICs to a customer. The shipment demonstrates its ability to manufacture silicon-photonics products at scale on 12-inch wafers.

The company plans to introduce a silicon-photonics platform for general customer use in 2027. Silicon photonics and advanced packaging are expected to increase UMC’s exposure to AI infrastructure as data centers require higher-bandwidth connections with lower power consumption.