Qualcomm Contracts UMC as Second 28nm Process Supplier

Taipei, July 2, 2012 (CENS)--Qualcomm Inc. recently designated United Microelectronics Corp. (UMC) as its second supplier of 28nm process capacity to cope with tight supply of the leading-edge process at Taiwan Semiconductor Manufacturing Co. (TSMC), currently its primary contract supplier.

People familiar with the contract said that UMC will begin to produce Qualcomm's Snapdragon S4 processors and 3G/4G baseband chips using 28nm process in the fourth quarter this year. The chips had gone through tap-out and verification at UMC.

Contract volume is estimated at 3,000-5,000 wafers a month, around 20-30% the volume sourced from TSMC.

The latest Snapdragon chips will be released sometime in the second half of this year in sync with Windows RT, which is the mobile version of Windows 8. Industry executives estimated Snapdragon will be designed into many Ultrabooks along with Windows RT.

Industry executives pointed out that the contract to UMC suggests Qualcomm could hardly depend on TSMC as sole supplier of leading-edge processes. Qualcomm has long counted on TSMC for over 90% of the foundry capacity it needs.

In addition to UMC, Qualcomm has also chosen Samsung as another contact supplier of 28nm process.

According to Qualcomm Chairman and Chief Executive Officer Paul Jacobs, 28nm process shortage will remain lingering because of excessive demands and low supply triggered by complicated technology involved.

Jacobs said his company would not rule out the possibility of owning an in-house factory if the shortage problem is not likely to be fixed.

Taiwan's Supply Chain of Qualcomm Processors

Product process	45/40nm process	28nm process
Product item	Snapdragon S2/S3	Snapdragon S4
Contract foundry	TSMC	TSMC, UMC
Contract assembler	ASE, STATS	ASE, Siliconware
IC substrate supplier	Unimicron, Kinsu	Kinsu

Sources: the contract suppliers