Many Taiwan-based IC design houses affiliated with United Microelectronics (UMC) are facing the pressure of being marginalized in scrambling for the firm's foundry support, as major foreign chipmakers are aggressively turning to the company with big lucrative orders amid reports about China-based SMIC likely facing US trade sanctions, according to industry sources.

IC designers including MediaTek, Novatek Microelectronics, Pixart Imaging, Faraday Technology, and ITE Tech, in which UMC has held stakes for years, are queuing up seeking more capacity from the foundry, whose 8-inch and 12-inch capacities are increasingly falling short of demand, the sources said.

In the past, such IC designers were always able to get more UMC capacity support than others where there was tight capacity, the sources added.

As SMIC may suffer trade sanctions from the US, many US chipmakers have been acceleratig their switch of orders from the Chinese foundry to foundries in Taiwan, the sources said. They have been offering UMC high-price orders in substantial volumes after failing to get urgent support from TSMC, whose capacity has been fully booked for the months ahead, the sources continued.

UMC-affiliated IC design houses are concerned about insufficient foundry supply in fourth-quarter 2020 and first-half 2021, the sources said, adding they are placing additional orders with UMC and have staff closely monitor shipments from the foundry.

By DIGITIMES