UMC flags rising costs, talent strain at Singapore fabs

Managing its expansion and existing operations has been a key test.

United Microelectronics Corp. (UMC) is grappling with rising costs and tighter talent requirements at its Singapore operations, even as demand for mature-node chips stays firm, underscoring the trade-offs facing manufacturers in high-cost hubs.

Operating expenses in Singapore are higher than in several regional locations, Thomas Tey, senior fab director at UMC Singapore, told Manufacturing Asia.

“Second, as technology complexity increases, there is a stronger need for precision-trained engineers and specialised manufacturing skills,’ he said in an emailed reply to questions.

Those pressures are shaping investment and execution decisions despite the city-state’s reputation as a stable and trusted semiconductor base.

Singapore’s semiconductor sector accounts for about 7% of gross domestic product and plays a strategic role in regional supply-chain resilience, Tey said.

The country’s policy stability, infrastructure, and skilled workforce continue to support advanced manufacturing, though structural challenges have become more pronounced.

UMC last year announced a $6.4b expansion of its Singapore wafer fabrication plant, targeting 22-nanometre and 28-nanometre chips.

Volume production of 22-nanometre wafers is scheduled to begin in 2026.

Transitioning to the smaller process node requires tighter process integration, higher automation, and stricter yield control, supported by capability-building across engineering teams, Tey said.

Managing the expansion alongside existing operations has been a key test. Infrastructure construction, equipment installation, and hiring were phased to limit disruption, with earlier supplier engagement and expanded project governance used to maintain output and quality.

To address cost and talent pressures, UMC has stepped up automation, yield optimisation and workforce development.

Training has been expanded through in-house programmes and partnerships with universities and polytechnics to better align skills with manufacturing needs.

Beyond capacity, UMC is also expanding research and development work in areas such as silicon photonics, flat optics, and advanced packaging, whilst rolling out sustainability measures focused on energy efficiency and water use.

These efforts position Singapore as a long-term growth driver for UMC, Tey said, though rising complexity means execution discipline would remain critical.