Citigroup Inc yesterday axed its earnings forecast for United Microelectronics Corp (UMC, 聯電) by 82 percent for this year and another 50 percent for next year as large impairment losses exacerbated UMC’s already weakening profitability during the latest semiconductor slump.
UMC may book an additional NT$4.2 billion (US$131 million) to NT$4.7 billion in impairment losses stemming from its investment in local computer memory chipmaker ProMOS Technologies Inc (茂德科技) if the chipmaker decides to book the losses in the third quarter, Citigroup said in a report released yesterday.
That was based on PoMOS’ closing price of NT$3.25 on Tuesday, far lower than NT$9 to NT$10 per share UMC paid on the open market in 2006, Citigroup said. UMC currently owns 471.4 million ProMOS shares.
“Factoring in a downturn in the fourth quarter and the first quarter of 2009, we could see UMC booking two to three quarters of losses at the operational level,” Citigroup semiconductor analyst Andrew Lu (陸行之) said in the report.
Lu predicted that UMC could drift into operational losses next quarter — the first in more than three years — after factory usage dropped to less than 70 percent.
The quarterly operating losses may extend into the second quarter of next year, he said.
As a result, Lu slashed his forecast for UMC’s net income this year by 81 percent to NT$1.3 billion from an earlier estimate of NT$7.02 billion. He also halved his forecast for the chipmaker’s earnings next year to NT$5.56 billion.
“Although the write-off will not affect the balance sheet and cash flow of UMC, we see it hurting investor sentiment,” Lu said.
The share price of UMC was unchanged at NT$10.25 yesterday after the government’s temporary ban on short selling, effective yesterday for a period of two weeks, helped limit further declines in local stock markets.
On Tuesday, UMC said it would book one-off impairment losses of NT$3.22 billion in the third quarter from its long-term investment, primarily from local chipmaker Silicon Integrated Systems Corp (矽統科技).
Lu also cut the target price of UMC to NT$9 from his previous prediction of NT$13.4, implying a 12 percent downside in the next 12 months from yesterday’s closing price.
Lu repeated his “buy” rating on UMC.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day
Thousands of parents in Singapore are furious after a Cordlife Group Ltd (康盛人生集團), a major operator of cord blood banks in Asia, irreparably damaged their children’s samples through improper handling, with some now pursuing legal action. The ongoing case, one of the worst to hit the largely untested industry, has renewed concerns over companies marketing themselves to anxious parents with mostly unproven assurances. This has implications across the region, given Cordlife’s operations in Hong Kong, Macau, Indonesia, the Philippines and India. The parents paid for years to have their infants’ cord blood stored, with the understanding that the stem cells they contained