UMC Plans New Advanced Chip Packaging Hub in Southern Taiwan

UMC Sets its Sights on Southern Taiwan- A New Hub for Advanced Packaging?

Image Credits: UMC

20 June 2025

As the global semiconductor race pivots from nodes to packaging, United Microelectronics Corp is reportedly announced that thet are plotting a bold move to establish a new advanced packaging facility in southern Taiwan a strategic follow-up to its high-profile expansion in Singapore. The change demonstrates the foundry's intention to increase its market share in the fiercely competitive backend market where chipset integration AI accelerators and high-performance computing necessitate next-generation interconnects rather than merely smaller dies.

According to TrendForce, UMC is actively evaluating land options in Kaohsiung Science Park, a zone already home to peers and ecosystem partners. While formal announcements remain pending, supply chain insiders suggest that UMG is fast-tracking site selection to secure government incentives and align construction timelines with customer ramp-ups expected in late 2026.

“Packaging is no longer a support function. It’s the battleground for performance and power,” says an industry executive familiar with the project. “For UMC, bringing that capability in-house, near its 12A fab cluster, is a logical leap.”

UMCs mirror a broader trend: Traditional foundries are racing to vertically integrate advanced packaging capabilities once the exclusive domain of OSATs (Outsourced Semiconductor Assembly and Test Firms). While TSMC CoWoS and intel's Foveros dominate headlines, second-wave players like UMC and GlobalFoundries are investing to capture a slice of the AI workload market, where tight packaging tolerances and thermal management define system performance.

The company's recent activity in Singapore offers a telling precedent. With a focus on 2.5 D and substrate-based design, UMC is already transforming a portion of its Tampines campus into a localized packaging R&D and pilot production line. While lowering geopolitical supply chain risks, analysts predict that the Taiwan buildout will enable a higher volume of lower latency manufacturing.

UMC has not officially disclosed capital expenditure for the Taiwan expansion, but sources indicate a phased investment model like the Singapore rollout initial cleanroom readiness followed by gradual tool loading based on customer bookings. The firm is also said to be in talks with substrate and thermal solution vendors to co-locate facilities and reduce logistics friction.

A complex multi-node packaging roadmap may be de-risked by the company with the strategic advantages of southern Taiwan which include not only proximity to UMC factories but also access to skilled labor established logistics and a supportive legislative environment. If completed the new location would put UMC in a better position to compete directly in the high-value AI and edge devices packaging markets accelerating Taiwan's transformation from a major chipmaker to a packaging powerhouse.