Infineon and UMC sign long term contract to guarantee production as automotive MCU shortage continues!

From the end of 2020 on the shortage of automotive chips, to 2023 seems to have not slowed down the trend, the major manufacturers began to increase the layout of the car chip. Infineon has reached a long-term strategic cooperation agreement with UMC to expand cooperation in the automotive microcontroller (MCU) business, according to a news release on their official website on Tuesday, according to foreign media reports.


From the news published by Infineon on its official website, the cooperation between the two companies is still on the production of Infineon microcontrollers. After reaching a long-term strategic cooperation agreement with UMC, their production capacity will be multiplied to better meet the growing market demand.

Under the new long-term strategic partnership agreement, UMC will OEM high performance microcontrollers for Infineon at their fab in Singapore, using a 40nm process. Infineon’s high-performance microcontrollers utilize their proprietary eNVM (embedded non-volatile memory) technology.

Microcontrollers are key components for controlling multiple functions in automobiles, and the demand for microcontrollers is increasing dramatically as vehicles become more environmentally friendly, safe and smart. This year, Infineon has increased its sales rate of automotive microcontrollers to close to 1 million per day.

Commenting on the new long-term strategic partnership agreement, Infineon COO Rutger Wijburg said that with the new strategic partnership agreement they have secured additional long-term capacity to serve customers in the fast-growing automotive market.


Executives from UMC also said they are pleased that Infineon has chosen their Singapore facility to manufacture automotive microcontrollers and that the new multi-year supply agreement will strengthen their long-term relationship with Infineon in multiple areas such as automotive and artificial intelligence IoT.

01 Infineon: Automotive MCU shortage to ease in the second half of the year

Infineon recently said at its earnings meeting that it expects the shortage of automotive MCUs to ease in the second half of 2023, according to Taiwan’s Electronic Times. Infineon reiterated the divergence in the semiconductor market, with demand for semiconductors remaining strong in the automotive, renewable energy and security sectors, but a cyclical slowdown in demand for consumer products and weak corporate spending on IT infrastructure.

Infineon said that as electric vehicles and ADAS continue to grow, customers are now more willing to sign capacity reservation agreements or place longer term commitment orders to secure semiconductor supply. OEMs now have a “strong preference” for direct sourcing of strategic components and for higher inventory levels.


To meet such demand, the company is increasing its production rate to nearly 1 million units per day. capacity for automotive products is fully booked for fiscal year 2023.

It is reported that Infineon achieved revenue of 3,951 million euros in the fourth quarter of 2022 (the first quarter of fiscal 2023), down 5% sequentially, and net profit of 1,107 million euros, up about 4.6% sequentially from the previous quarter.

Post time: Mar-10-2023